The Senate, House and governor have reached a historic agreement on a contentious, complex and difficult issue to ensure the state’s workers’ compensation system continues to protect workers, employers while avoiding insolvency.

Sens. Lisa Brown, D–Spokane, Jeanne Kohl-Welles, D–Seattle, and Derek Kilmer, D– Gig Harbor, who were instrumental in negotiating the final agreement, issued the following statements:

“The agreement reached today represents the largest workers’ compensation reform in our state’s history,” said Brown. “This puts us on a path to long-term financial sustainability while maintaining paramount protections for workers.”

“Within this compromise, thanks to the pivotal work of the governor, we will modernize our system while maintaining key safeguards for injured workers,” said Kohl-Welles. “The Senate Labor, Commerce, & Consumer Protection Committee, which I chair, will monitor implementation closely to ensure it achieves the intended results.”

“Today, we make a thoughtful change to modernize the workers compensation system in a way that ensures workers continue to get the help they need, reduces costs to employers, and fosters sustainability in the system,” Kilmer said.

The agreement includes:

• Claim Resolution Structured Settlements: Provides an option for those who are older than 55 to enter into a voluntary structured settlement agreement for their workers compensation claim.
• Washington Stay at Work Program: Creates a new program to subsidize employers who offer light duty or transitional work. A state fund employer who offers light duty or transitional work can seek reimbursement for 50 percent of the injured worker's wages. Reimbursement can be provided for up to 66 work days in a two-year period, and the amount of reimbursement cannot exceed $10,000 on any claim. All reimbursements are paid out of the Washington Stay-at-Work Account, which is funded by assessments collected from state fund employers. Up to one-half of the assessment may be collected from workers.
• Prior disability awards: Benefits for prior disability awards paid to a worker are deducted from the worker’s pension award.
• COLA Freeze: Freezes the cost of living adjustment on workers’ compensation pensions and time loss for one year.
• Rainy Day Fund: Creates an industrial insurance rainy day account in the state treasury. Requires the transfer of workers’ compensation funds whenever the reserves are greater than 110 percent of liabilities. These funds would be available to reduce rate increases during economic downturns or when liabilities unexpectedly increase.
• Fraud Prevention Initiative: Applies the best practices in place to address employer fraud to workers and providers. Engages in a national information exchange with other workers’ compensation insurers to avoid duplication of claims and benefits. Establishes criteria for periodic review of total permanent disability pension recipients, including their level of disability and physical activity, to determine whether they can be gainfully employed.
• JLARC performance audit of claims management: Evaluates the extent to which the department makes fair and timely decisions and resolves complaints and disputes in a timely, fair and effective manner. Determines if current claims management organization and service delivery models are the most efficient available. Analyzes organization and delivery for retrospective rating plan participants as compared to nonparticipants. Progress reports are due by December 1, 2012, and December 1, 2013. Results of the audit are due by June 30, 2015.

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For interviews: Sen. Lisa Brown, 360.786.7604

Sen. Jeanne Kohl-Welles, 360.786.7670

Sen. Derek Kilmer, 360.786.7650

For information, contact: Paulette Avalos, 360.786.7360