New Washington State Workers' Compensation Laws

The Washington State Legislature reached an agreement on new workers compensation laws that change the way the state handles workers' compensation claims. Washington is one of four states that have only a public workers compensation claims system.

Large employers in the State, who have the resources, are able to self–insure, and many do such as Boeing and Microsoft. Last November, Washington State voters defeated an initiative to allow private carriers to sell workers' compensation insurance in the State.

The Reason for the Laws

The new laws are aimed at reducing costs as the system was under serious financial pressure. Without the changes, the amount paid for claims would have otherwise needed double–digit rate increases from employers, which was unacceptable too many businesses with current economic conditions.

The agreement was part of the Washington State Legislature's push to conclude its 30–day special session, which ended on May 25, 2011. The legislature had to close a $5.2 billion budget gap.

The agreement was announced on May 22, 2011 in a joint appearance with Democratic Governor Chris Gregoire, Senate Majority Leader Lisa Brown, House Speaker Frank Chopp, Senate Minority Leader Mike Hewitt, and House Minority Leader Richard DeBolt.

Democrats currently control both the House and Senate in Washington State. The bill, officially known as H.B. 2123, passed the Washington state House with a 69–26 vote and a 35–12 Senate vote.

What the Law Means

The bill promotes workers getting back on the job faster, freezes Cost–Of–Living Adjustments, and provides the option of a structured claim settlement. The structured settlement option is voluntary, is negotiable, and allows legal representation.

These were the key pieces in cutting costs. Backers say the reform bill will save the state's disability system $1.1 billion over the next four years. Opponents of the bill say it transfers money to businesses, at the expense of injured workers and the surviving relatives of workers who are killed.

In a statement, Governor Gregoire noted that as part of the agreement, Centers of Health and Education and a medical provider network were established to deliver health care services to injured workers.

Employers also benefit from the agreement, as these changes should mean lower workers' compensation costs, which employers fund.

The bill is also aimed at getting injured employees back on the job quicker, which benefits both the employer and employee, and curve escalating pension costs.

It will be interesting to see how much the new laws affect costs. While the system remains public, this new legislation will definitely impact claims. Washington was the first state in the country to create a workers' compensation program.