Legislature's workers' comp reforms were wise policy

A key lawmaker rebuts an earlier column that asserted the Legislature punished workers. Instead, there were valuable new features to protect workers, and the trims were sensible measures to protect the fund from serious damage.

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Sen. Jeanne Kohl-Welles (D-36)

A key lawmaker rebuts an earlier column that asserted the Legislature punished workers. Instead, there were valuable new features to protect workers, and the trims were sensible measures to protect the fund from serious damage.

The guest column published last week in Crosscut slamming state legislators from Seattle who voted for workers' compensation reform ("Washington state's new workers' comp law hurts those already in pain," by John Burbank) is misleading and inaccurate.

The column is an unfair portrayal of the final bill that passed, one which preserves the integrity of our state's industrial insurance program and its strong worker protections, while achieving reasonable and realistic reforms to ensure our system remains viable for years to come. And, it should be noted, that in being so critical of the Seattle legislators who voted for the bill, Burbank chose not to include Rep. Frank Chopp, the powerful Speaker of the House, who not only voted for the bill but played a major role in coming up with an acceptable compromise in the final days of the Legislature’s special session.

With the state's enduring the most challenging budget crisis in history, no area of state government was immune from reductions this session, and the workers' compensation system was no exception. Increases in unemployment and decreases in investment returns caused by the global recession have resulted in about $1 billion worth of damage to the state workers’ compensation fund.

To address this funding crisis — and to ensure we have a stable fund for the future — the Legislature had no choice but to consider changes to our pension system. Yet, the author's assertion that the Legislature achieved these reforms by giving employers $1 billion that injured workers would have otherwise received is a gross misrepresentation of the facts. As he made no attempt to elaborate on his claim, I offer here some points to fill in the gaps.

Contrary to Burbank’s claim, several gains for workers were included in House Bill 2123, many of which were introduced as separate bills in the House but had been blocked by Republicans and some Democrats in the Senate; for example, providing incentives to employers that help injured workers return to their jobs as soon as possible. Another measure creates safer workplaces by offering safety and health grants for employers using injury-prevention programs and by requiring employers to correct workplace hazards when they are identified.

We also put in place a rainy day fund for the workers’ compensation system. This means that funds will be available to reduce rate increases during economic downturns or when liabilities unexpectedly increase, and it will make it less likely that employers will be provided “rate holidays,” which is believed to also have contributed to our current situation. Additionally, legislation I sponsored
that passed earlier in the session (Senate Bill 5801) addressed rising health care costs by facilitating the availability of the highest quality medical care and vocational rehabilitation available for injured workers.

Combined, these pro-worker reforms account for nearly $350 million of the overall $1 billion in savings to the system.

Burbank was accurate in noting that the bill includes a one-year cost-of-living adjustment (COLA) for injured workers' pensions, which will lower premiums charged to both workers and employers. However, this will not result in a long-term reduction in pensions for injured workers, and it is consistent with and lesser than COLA freezes across all other aspects of state government, including larger ones (two years) for teachers and state employees.

Because 8 percent of claims account for 85 percent of the costs to the workers’ compensation system, addressing the incidence of long term claims that turn into pensions was the obvious and necessary place to examine in order to maintain a healthy workers'  compensation fund. Determining the best way to reduce the rates of lifetime pensions without hurting workers was not easy, but the result was a program that allows workers 55 and older to opt voluntarily for a “claim resolution structured settlement” paid out over time (dropping down to workers 50 and older in 2016). This differs from "lump sum settlements" provided in 44 other states that have the risk of leaving the injured workers with inadequate redress later on.

Contrary to what Burbank inaccurately asserted about "the many Democratic legislators who gave in to corporate demands," we negotiated a solution that will ensure Washington has the most protective voluntary settlement plan in the country, with many assurances that workers continue to get the protections and benefits they deserve. The program will be monitored annually over the next few years
as well as periodically audited to assess its impact to the overall system.

What resulted this session was good policy — not a giveaway to corporate greed as was implied by Burbank. Granted, this proposal was opposed by many of our important stakeholders, and I am respectful of that position. In fact, many of my colleagues and I voted against another bill that passed the Senate earlier in the session that included a full “compromise and release” lump-sum provision, detested by organized labor.

But we had a problem to solve and a political reality that would not go away, including gaining sufficient votes for the operating budget which was being tied to passage of a workers’ comp reform bill. As such, we worked in good faith with the governor to find a fiscally-responsible solution and one that will keep our system solvent and protecting of workers and their families for years to come.

When it comes to issues as complex as workers' compensation, it is tempting to oversimplify the debate as a loss for workers and a win for business. Fortunately, this is not what happened in Washington this year. Once people move beyond the sound bites and understand the consequences that would have resulted from inaction — financial instability and risk of the serious benefit reductions to workers —  they should realize that the reforms taken were necessary, both systemically and politically. Also, we can always address needed changes if they arise in the 2012 legislative session and beyond.


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About the Authors & Contributors

Jeanne Kohl-Welles

King County Councilmember Jeanne Kohl-Welles represents the 4th Council District.