BIAW FILES INITIATIVE TO ALLOW COMPETITION FOR WORKERS' COMP INSURANCE

BIAW has filed an initiative to the people that will allow private insurers to compete with the state Department of Labor & Industries (L&I) to offer employers workers' compensation coverage. The initiative - 1082 - will be on the ballot this November.

 

BIAW's initiative will bring Washington State in line with the 46 other states that allow competition in the industrial insurance market.

 

Despite spiraling costs, dismal claims management and out-of-control rate increases, L&I and labor unions continue to defend the state's monopoly on workers' comp, which forces employers to pay high taxes for poor service. While workplace injuries have decreased 55 percent in recent years, L&I's costs to manage workers' comp have increased by more than 80 percent and injured workers stay off the job more than two times longer in Washington than any other state. Meanwhile, L&I has increased workers' comp rates over 50 percent. Still labor unions delusionally declare Washington's workers' comp system to be "one of the best in the country" and say scrapping the state's monopoly on the worker's comp system in favor of allowing competition "doesn't work."

 

Here's how it hasn't worked in some of the 46 other states that allow competition:

 

West Virginia: Privatized its workers' comp system in 2005-since then rates have decreased by 30 percent and claims are managed more efficiently.

Oregon: Allowed private insurers to compete with the state over 20 years ago; since then rates have not increased, they have decreased, and earlier this month more than $100 million was returned to rate payers in dividends.

Nevada: Recently privatized, this state decreased workers' comp rates by 7.6 percent in 2010.

Maine: Announced a 7 percent reduction in workers' compensation rates for 2010, on top of a 7.6 percent reduction in 2009.

North Carolina: Announced a rate for 2010 - down 9.6 percent, which will save employers there more than $100 million.

Colorado: Rates decreased 9.7 percent in 2010.

California: Even California, which L&I and labor unions use as an example of how disastrous allowing competition can be, had a smaller increase in workers' comp rates than Washington this year...just 4 percent.

 

 This is a sampling of the vast majority of states whose workers' comp rates decreased this year-clearly competition has decreased costs and improved efficiency in those states. BIAW believes injecting competition into Washington's industrial insurance marketplace will yield similar results. Washington State's 7.6 percent increase in workers' comp rates for 2010 is the biggest rate increase of any state in the country. And this is the 7.6 percent increase L&I says was "inadequate by design"-a 33 percent increase was necessary to keep the system from becoming insolvent, which State Auditor Brian Sonntag says is 95 percent likely to happen within 5 years unless L&I starts hitting employers with double digit tax hikes. Washington employers can't afford a 33 percent tax increase to pay for L&I's failure to manage workers' comp-we need competition, and we need it now. To find out how you can help BIAW's effort to reform the state's broken workers' comp system, email brianm@biaw.com or call 800-228-4229.