Workers’ comp reform bills spark much debate at public hearing

Several bills before the House Labor and Workforce Development committee would reform the workers’ compensation program. The committee chair said he was originally going to devote 4o minutes to the topic. However,  testimony from people on both sides of the issue took up almost all of the meeting’s two hours. In the end, there was still not enough time to hear from everyone that had signed up to speak.

House Bill 2023 would require permanent total disability awards be offset by any prior permanent partial disability awards. HB 2025 would freeze cost of living adjustments for the fiscal year 2012. HB 2026 would create a “rainy day account” for the Accident Fund and Medical Aid surpluses. The rainy day account would be used to keep from raising industrial insurance rates for employers.

Rep. Larry Springer, who is sponsoring HB 2025 said the interest here is looking at different ways to reform the system.  “It is, in fact, a reduction in benefits, make no mistake about that,” he said.

“I’m really talking about all three of these bills, they don’t have anything for us,” said a private employer. “We are the ones who pay in money so everyone else can have money to pay out of it…all this does is make people feel like they have done something when they haven’t done anything.”

“All this…is just ribbons around the edges. We need a complete rebuild of the whole system,” said the owner of a repair construction company. “When I look at the costs saving drivers…I really don’t see anything that is going to be meaningful to me that follows the rules…I just think that we need to delve deeper to get these issues flushed out and be as accountable to our workers as we can.”

“Anything that costs more money — and these look like they will,” said Tim Baker, of Baker Electric. “I’m against them.”

Many employers said they do support the SB 5566, which would allow for voluntary settlements. Baker said that reducing the costs of long-term claims is the only place that they can see real savings.

The Washington State Labor Council is in favor of HB 2026, but concerned about HB 2023 and HB 2025, which are both benefit cuts, said Rebecca Johnson.

“We do have a fundamentally sound system,” said Johnson. She said the system is low cost and that voters already sent a clear message that they don’t want the system run like a private insurance system, which uses compromise and release and buy-outs. “For us workers’ comp…is not abstract, it is a safety net that people need to know they can rely on.”

Tara Goode, with Washington State Nurses Association suggests making sure that work places prevent injuries in the first place and that improvements be made to ensure workers have advocates. Goode was also injured on the job and has personally dealt with Labor and Industries. “In dealing with my injury, I was in a time of crisis. I just wanted to get back to work,” she said. “Please keep in mind a workers vulnerably.”

“For us in the construction industry the question is not if you are going to get hurt, it is when you are going to get hurt,” said Dave Johnson of the Washington State Building and Construction Trades Council. He said because of this, the worker’s comp system is very important. The council, he said is against HB 2023 and HB 2025 but likes the idea of a rainy day fund. However, he said, they would chose these bills over “compromise and release.” “You cannot save money in the system without taking it out of workers’ pockets.”

Larry Shannon of the Washington Association for Justice said they are concerned. “There is an alarming trend going on in the conversation about workers’ comp,” he said. “Washington is unique in that employees pay a part in the system…they pay up to 30 percent…Injured workers and benefits did not cause the problem in our system, Wall Street did.” Shannon said that L&I investments lost nearly half a billion dollars in just two quarters. He said that he appreciates how the rainy day approach would be a solution to hard economic times.

Vickie Kennedy from L&I said that before the recession, excess funds were given back in two rounds of rebates of $200 million to employers. Workers and employers also got 6-month rate holiday.

Betty Neighbors, co-founder of Terra Staffing, said the recession has hit them hard. Before 2008, she said they employed more than 1,000 people. Now, she said, they have half as many workers. Neighbors said the company pays half a million dollars into the workers’ comp system. She said the new House bills are too cautious and that lawmakers need to be bold.  “We absolutely need real reform to bring predictability and stability to the system,” she said.

“I don’t think these bills are attacking the cost drivers of the system,” said another business owner.

Frank Riordan, who operates a trucking company that buys into the workers’ comp system in both Washington and Oregon, said that while rates have been rising in Washington, his rates in the other state have gone down and he received a rebate.

“There are two customers at L&I that are unhappy, injured workers and rate-payers,” said Neighbors.

Craig Soucy, of the Washington State Council of Firefighters, said getting people proper care and getting them back to work is the best way to save money. “Compromise and release,” on the other hand, he said, is not the way to save money. When someone is hurt and not able to make a house payment, they could be tempted to take a settlement that is only 30 percent of what they deserve, he said.

“The system is not broken,” said Soucy. “We pay approximately 30 percent into the system. We are a partner in the system.” When they get hurt, he said, they want to know the safety net they paid into will be there.

“At a certain point I have to wonder if these bills are becoming indulgent at the expense of the workers,” said Nicole Grant of IBEW. “People get pensions in Washington state, when they need them.” She said that when she was 10, her father was seriously injured on the Columbia Tower. During the following years, L&I, she said, helped her family and retrained her dad so that he could return to the same industry. “That’s the system we have and that is the system we are trying to protect.”

“Our long-term and lifetime claims are crippling the system,” said Kris Tefft of the Association of Washington Business. L&I is increasing its tax rates lately, he said, but not at the rate the benefits are going out the door. He suggests addressing benefit structures and said SB 5566 does that. It has more sideboards that allow worker protections than any of the other states who allow for voluntary settlements, said Tefft.

“It’s a fallacy that we are low-cost state,” said Dave Kaplan, Washington Self Insurers Association.

Watch the committee meeting live here.

Tags: workers' compensation