Washington State Aims To Get A Better Grip On Workers’ Compensation Costs

Washington state ranks among the highest in workers' compensation costs per $100 of payroll. Lawmakers recently heard from some stakeholders who want claims rules and compensation formulas tightened, and others who accented the need for flexibility, and more worker education. Photo: Washington State Department of Transportation.

As workers’ compensation premiums continue to rise in Washington, raising alarms for employers, the state is already among the most expensive for claims. Washington from 2010 through 2014 each year ranked third highest out of 50 states in amount of workers’ comp payouts by employers per $100 of payroll. That’s according to a National Academy of Social Insurance (NASI) report (pp. 32-33) released in October.  

Let Ready Workers Get Back To Work

At a recent State Senate Commerce and Labor Committee meeting, Chair and State Sen. Michael Baumgartner (R-6) said his concern lay with exactly what type of reforms would help lessen the cost burden of workers’ comp for employers. Reducing unnecessary time off that is forced by system mandates would punch a hole in costs, said State Sen. Curtis King (R-14).

“I talked to [three] employees during interim…all three of them wanted to go back to work, all of them have gone through all the processes. They were waiting and L&I (the state Department of Labor and Industries) wouldn’t let them go back to work. They had been waiting months…they’ve seen the doctors…they’re chomping at the bit to go back to work, but that is not what the process is,” said King, a member of the committee.

Fix Faulty Formulas

Natalee Fillinger is a private practice attorney for employers and the former Self-Insured Program Manager for L&I. She told the committee that faulty formulas baked into L&I processes can drive up workers’ comp costs for employers.

Fillinger cited the September 2016 Washington Court of Appeals case, Harder Mechanical, Inc. v. Patrick Tierney. The appellate court upheld earlier rulings by the state’s Board of Industrial Appeals and a superior court, in favor of Tierney, a pipefitter with a history of sporadic part-time work. He was injured on a new job and granted workers’ comp benefits by L&I based on the presumption of a regular full-time schedule.

Tierney ultimately had his wage doubled because of his stated intent to be working full-time, despite a history of repeatedly not working 40 hours a week.

Fillinger said, “…when you are making double on time loss” compared to “actually working, sometimes there can be a delay in recovery…there is nonsense in the way that the wage is done in the state of Washington and it will take legislative intervention.”

Set the Discovery Clock Right

Another point of contention is how long a worker can wait to make a claim after symptoms occur. Occupational injuries “can be claimed two years from the point of realization of exposure, unlike an industrial injury where it’s one year from point of exposure,” Bob Battles told the Senate Committee. He is Government Affairs Director for the Association of Washington Business. Battles added, “…there is no statute of limitations on occupational disease, you can bring it (up) forever because you can always claim that ‘I just found out about it.'”

Via Senate Substitute Bill 5509, lawmakers last year attempted to set the clock limit to one year after occupational injury awareness in order to allow “employers and employees to address these conditions when they are legitimately related,” according to Battles. In both the 2015 and 2016 sessions, the bill cleared Senate Commerce and Labor, but stalled in Rules.

Occupational Diseases Can ‘Take A While To Manifest’

Committee member State Sen. Steve Conway (D-29)  argued that often, a worker doesn’t know about an injury within a year. “A lot of diseases and lot of workforce exposures take a while to manifest themselves…we all know hearing loss, we all know how that’s an issue that goes on in all of our work sites…I just have a hard time understanding a one-year rule given that fact…it’s too strict of a rule,” said Conway.

Committee Vice Chair State Sen. John Braun (R-20) disagreed. He said if the clock can run for two years, “it is enormously difficult or virtually impossible if you are trying to prove” an injury “didn’t happen at work; you can’t do it. One year is a reasonable timeline.”

Braun added, if the burden of proof test “is virtually automatic, then it’s not much of a burden…It’s like an automatic ‘I want to get $10,000 permanent partial disability when I retire.’ Just apply for it, you’ll get it. That’s how it works.”

David Lauman, an attorney handling workers’ compensation benefits claims, told lawmakers that “doctors don’t usually tell workers” an injury “is related to work. It takes a long time for workers to make that link. If we shorten that timeline, we run the risk of making it so a worker doesn’t understand that causal link.”

Countered Braun, “I would tell you nine out of ten folks that visit the doctor, (if) there is any suspicion that it’s work-related, the doctor will insist that the worker fill out the form saying it is work-related…to claim that doesn’t happen is simply not true,” said Braun.

Lauman said, “The state spends far too much money on repetitive independent medical examination…one way you can drive down costs is cutting down on that, and putting a little more trust in…doctors who are on the ground and seeing injured workers on a regular basis,” he said.

Improve Worker Education

One statewide labor official said another concern is worker education, and cited a recent report done for the state. A July 2016 study on Washington’s workers’ comp claims system by the Upjohn Institute for Employment Research found that employees are too often in the dark about their rights. The legislature should respond to this awareness gap, said Joe Kendo, Government Affairs Director for the Washington State Labor Council.

Kendo added, “One-third of respondents reported feeling well-informed about their rights and process, yet one-half…were actually unaware that their medical expenses would continue to be paid even if there were a settlement was in place.”

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