Research Council: WA still has nation’s highest workers’ compensation benefit costs

The Washington Research Council just reported on new workers’ comp data.

According to the National Academy of Social Insurance’s annual workers’ compensation report (released today), Washington has the nation’s highest benefits costs yet again.

For 2013 (the data covered in this report), Washington’s benefits costs per covered worker were $826.94 (a slight decline over 2012). Alaska is the next highest ($808.43), followed by California ($799.25).

These high costs were addressed in our research report. We wrote last fall,

…[Washington] has consistently had the highest workers’ compensation benefit costs in the country. In 2012, the most recent year for which data are available, benefit costs averaged $840 per covered worker, nearly twice the U.S. average of $434.

In 2011, the Legislature allowed workers who are at least 55 years old (dropping to 50 in 2016) to voluntarily settle their claims with structured settlements. Opportunities to build on this reform might include expanding the use of voluntary settlements to workers of any age. Voluntary settlements bring closure for workers and reduce long-duration time-loss claims.

Clarifying the definition of what constitutes an occupational disease (a condition warranting workers’ compensation) would also help control costs. Over 1997-2009, “occupational disease claims have been a rising proportion of all compensable claims in Washington while their proportion has fallen in both Oregon and British Columbia.” In Washington, the definition of occupational disease is very broad. The lack of clarity means diseases may be covered that are not directly caused by workplace exposure, but are instead ordinary diseases of life. Other states (e.g. Virginia) exclude common illnesses and specify when a disease arises out of employment.

The WRC notes,

Benefits costs are the best indicator of Washington’s workers’ compensation system costs, as we’ve explained here and here.

And, speaking of costs, we’d be remiss if we didn’t also acknowledge another insightful “review & outlook” piece in the Wall Street Journal addressing the effects of a high minimum wage. 

In short, policies that drive up employment costs lead to job loss or, at the very least, a decline in job creation. Costs matter.