Lawmakers Must Not Mess Up Workers’ Compensation Programs
Association of Washington Business News Release
OLYMPIA—“As lawmakers consider changes to the workers’ compensation retrospective rating (Retro) programs, they must be careful not to screw up a program that works effectively for the employer and the worker,” Association of Washington Business President Don Brunell said.
Currently, legislators are considering a bill aimed at curbing the flow of political contributions from Retro programs. “In the process, they have proposed a number of changes that could make the programs a bureaucratic nightmare to administer,” Brunell said. “These changes are unnecessary and very unreasonable.”
Retrospective rating is a way for employers in similar industries to band together for workers’ compensation coverage. By pooling, they are able to develop good workplace accident prevention and safety programs and better manage claims. Associations like AWB, called sponsoring organizations, administer these Retro programs. While the employers still purchase their workers’ compensation coverage from the state, the sponsoring organization manages the program for them. Then the savings earned from better claims management and work-place safety are passed on to the sponsor organizations, which give the refunds to the Retro members.
Some lawmakers object to the way some associations run their programs because they hold back portions of the refunds to use for political activity. “That’s not the way we run our program at AWB,” Brunell said, “but we believe that members of the Retro programs ought to determine how their refunds are used—not state government or labor unions. After all, it is their money—not the state’s or Legislature’s.”
In Washington, employers can only choose between purchasing workers’ comp coverage from the state, or, if they are large like the City of Seattle or Boeing, they can insure themselves. Currently, employers do not have the option to buy insurance from private carriers. Retro programs offer a way for employers to save money.
Considering the fact Washington has high workers’ comp benefits, Retro programs offer ways to reduce costs. For example, the latest WashACE survey of states shows our state is ranked fourth highest when it comes to the costs of paid benefits for each worker. “With high benefits, you’d think that unions in particular would look for ways that employers can save money while providing better programs.”
Washington’s Dept. of Labor and Industries reports that the average time an injured worker covered by a Retro program is off the job takes about half the duration to recover than it takes a non-Retro worker. “We are able to prevent injuries and work more effectively with the injured worker, and their families, to get them healthy and able to return to work.”
AWB started its Retro programs in 1996 and to date has returned more than $21 million in refunds directly to employers. Those employers can then reinvest that in new facilities, which create added jobs.
The Association of Washington Business is Washington’s oldest and largest statewide business organization. It celebrated its 100th Anniversary last year and is Washington’s Chamber of Commerce. AWB’s 4,350 members employ more than 600,000 in the private sector of which 85 percent work in small businesses. More than 80 local chambers and 120 trade and professional associations affiliate with AWB.
Association of Washington Business
P.O. Box 658
Olympia, WA 98507
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