The Washington Research Council reports that workers’ compensation benefit costs in our state are again ranked highest in the nation.
Last week the National Academy of Social Insurance (NASI) released its annual report on workers’ compensation benefits, coverage, and costs across states. For 2015 (there’s a two-year lag), Washington’s benefit costs were $788.62 per covered worker. This was the highest in the country, followed by California ($751.70) and Alaska ($719.93). Although Washington’s benefit costs have been the highest in the country since 2008, they have been declining since 2010, when they reached $865.67 per worker.
Interstate comparisons of workers’ comp costs are difficult, complicated by Washington’s state-run system. The WRC explains,
We consider benefit costs to be the best measure of the worker’s compensation system’s costs as well as the most straightforward way to compare costs across states, as we explain in this report.
Additionally, since 2012, the NASI report has included a section on employer costs. As the 2017 report explains, they add up the premiums and deductibles paid, benefits and costs paid by self-insured employers, and assessments for special funds. This is not meant to serve as a comparison of costs across states because it does not control for differences in industry mix.
The Council’s report provides good context for understanding the complexities of the comparisons.
The Association of Washington Business also writes about the workers’ comp benefit costs and the coming rate decision.
The [NASI] report comes just as the state Department of Labor and Industries (L&I) announced it is proposing an average 2.5 percent reduction in tax rates for 2018, or roughly half of the average 5.9 percent the agency could have reduced rates and still covered forecasted benefits and administration for the year.
The rate reduction “is a move in the right direction,” said AWB President Kris Johnson in a statement last month. But, he said, there is more work to be done “to find ways to make Washington’s system more competitive, to lower costs and complexity for all employers and their employees, and to make the state more attractive to expand and locate a business.”
AWB provides information on the public hearings scheduled to begin later this month.