Vigilant Blog

News, trends and analysis in employment law, HR, safety & workers' comp

Jan 21, 2010

WASHINGTON: Workers’ comp funding in jeopardy

Workers’ Comp 

Based on a State Auditors report released December 28, 2009, the Washington Department of Labor and Industries (L&I) underestimated just how big the hole is in the workers’ compensation balance sheet.

An actuarial analysis prepared by Towers Perrin estimated the accident fund had a nearly 75 percent chance of insolvency within two years and an 89.5 percent chance of having its liabilities exceed its assets within five years. A 33 percent rate increase would be necessary in order to break even.

For the medical fund, which pays for medical care and related services, including some vocational rehabilitation, the analysis said there was a 3.9 percent probability of insolvency in two years, and 26.5 percent within five years.  A 24.5 percent rate increase would be necessary to save that fund.


L&I is defending the findings because the fund that is being referred to is a surplus fund.  Nevertheless the current pension and time loss duration trends and the State Auditor's findings are of serious concern.  When L&I announced a 7.6 percent average rate increase, although a 19.4 percent increase was indicated, we were fearful about future rate stability and sustainability. 


Now more than ever it is time for employers to be heard. Contact your Representatives in the state House of Representatives about tightening up the definition of occupational disease and allowing private workers' comp insurance carriers in our state. Encourage them to support a hearing on proposed House Bill 2950, which would authorize voluntary medical provider networks, permit voluntary settlement agreements, and redefine occupational diseases to only cover conditions that are primarily work-related. Washington state is one of only four states whose workers' comp insurance program is run by the state. Now is the time for employers to have more competitive options. If you need help locating your legislators, just enter your zip code at


For more information, contact Nancy Dicus at 800-733-8620 or Stay tuned for some regional informal roundtables in your area on this topic as well.

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