Workers' Compensation Insurance Initiative on Ballot in Washington State

Initiative 1082 is on the ballot in Washington State for the November 2, 2010 election. This workers' compensation insurance initiative, if passed, would open the state up to private workers compensation insurance.

Currently, Washington, is one of four states, the others being Ohio, North Dakota, and Wyoming, that do not allow private workers' compensation insurance.

Currently in Washington State, all employers must purchase industrial insurance from the State via the Department of Labor and Industries (L&I) or demonstrate they have the resources to be self-insured.

Large employers in the state, such as Boeing and Microsoft, can self-insure and most do. As a result, about one–third of Washington's work force is covered under self–insured plans.

Businesses Support Private Insurance

I–1082 is a business–backed initiative that advocates believe would make the state more attractive for creating and expanding businesses and new jobs. The initiative would also likely lower costs, as competition would bring down prices.

Supporters of the initiative cite that L&I charges too much and does too little to get injured workers back to work. They believe L&I is inefficient and unaccountable and that I–1082 would give them lower costs and a choice in coverage.

One of the proponents' main arguments is the number of lifetime disability benefits awarded in compared to in states with private workers' compensation insurers.

For example, in the twelve–month period between July 1, 2009 and June 30, 2010, L&I awarded 930 lifetime disability pensions. Self–insured companies, which must follow the state's rules, awarded an additional 204, for a combined total of 1,134 lifetime disability pensions.

A Private vs. Public System Comparison

Oregon, by comparison, a state adjacent to Washington, awarded just 13 lifetime disability pensions in the same period. Oregon has an entirely private workers' compensation insurance system. However, Oregon does have a population 43% smaller than Washington.

I–1082 backers also note that Oregon has not had a workers' compensation tax increase in 20 years. In the past ten years, Washington State industrial insurance taxes have risen 53% and are expected increase significantly next year.

Opponents of I–1082 state that the private insurance industry wrote the initiative, with the intent of maximizing profit from Washington workers' compensation. Therefore, the initiative lacks oversight, regulation, and accountability of the insurance industry and guts consumer protections.

According to Washington State Insurance Commissioner Mike Kreidler, the insurance industry gave themselves special exemptions allowing themselves the ability to delay and deny legitimate workers compensation claims.

Opponents also believe that insurers would cherry pick the companies they want to insure, leaving sky high rates for some small businesses.

Rising Health Care Costs Are Challenging the System

Under the current system in Washington, employees pay 28% of their industrial insurance premium costs and the employer pays the remaining 72%. I&8211;1082 shifts 100% of financial burden to employers for an 18–month period while the new system is being phased–in.

Opponents estimate that the average business owner in the state will see an 18% hike in industrial insurance premiums as a result causing them to not hire new employees, lay off workers or close down.

If passed, private insurers can begin providing industrial insurance coverage in Washington State beginning July 1, 2012. With congressional races, a senate seat, and numerous initiatives on the ballot, strong voter turn out in Washington is expected.