Workers' comp reform is worse than dreaded I-1082

A former legislator shakes his head that a state that defeated the insurance-privatization initiative by a wide margin has now enacted a law that harms workers more than the initiative would have.

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Former state Rep. Brendan Williams

A former legislator shakes his head that a state that defeated the insurance-privatization initiative by a wide margin has now enacted a law that harms workers more than the initiative would have.

Not long ago, I was busy debating statewide against Initiative 1082, a measure that would have privatized state industrial insurance and had the strong backing of business interests in the state.  When it lost, I did not expect progressives to rest on their oars.  However, I never imagined that, within six months of I-1082's rejection by 60  percent of voters, legislative changes would occur to workers' compensation that are more harmful to workers than I-1082 would have been. By allowing medical claims to be sold for "structured settlements," House Bill 2123 would harm workers.

This is the rare occasion where I part ways on workers' rights with Sen. Jeanne Kohl-Welles, who defends HB 2123 in a recent Crosscut column.  HB 2123, which a number of my friends supported, was a major disappointment in a session of many disappointments. 

If we accept the validity of unions as voices for working families, I don’t think we can dismiss their perspective on a matter as vital as workers’ compensation.  Particularly not in the only state out of 50 where workers are required to pay a share of premiums. HB 2123 passed over the pro-worker objections of 25 Democratic representatives and 11 Democratic senators.

The measure passed the House and Senate on the same day it first appeared. Even the conservative Washington Policy Center expressed concern over this amazing haste. Not only was the public given no opportunity to comment upon HB 2123 through a hearing (prior to its passage there wasn't even a public fiscal note), but a Republican “emergency clause” amendment was added to deprive the public their constitutional right of referendum.   Gallingly, that amendment’s sponsor was an anti-labor House Republican vocally critical of emergency clauses as a means of thwarting referendums.

I-1082 would not have expressly changed benefits for workers.  In fact, it would have relieved workers of their burden to pay half of Medical Aid premium costs – shifting that burden to employers. Indeed, I-1082's only certain harm was to employers.  Harm to workers was inferred based on private insurer practices in other states; the Board of Industrial Insurance Appeals estimated a 34 percent increase in workers’ appeals.  Even this phenomena, with its uncertain implications, could not have occurred any earlier than July 1, 2012, the date by which private carriers, under I-1082, could do business here.

In contrast, we know HB 2123 is immediately harmful to workers.  We know this because its effectiveness is defined by taking hundreds of millions out of workers’ pockets. 

The fiscal note assumes 40 percent of claimants will enter into "structured settlements" without benefit of counsel.  That's dangerous.  Selling one's future medical claims, particularly in this bad economy, carries with it elements of duress —  even if the bill requires the penny-pinching state, perhaps under a future Rob McKenna administration, to consider the best interests of the unrepresented worker .  It's expected that claims will be sold for 80  percent of their value.

For the structured settlement element of HB 2123 alone, the estimated "savings" (i.e., diversion from injured workers) from current claims is $264.9 million, with additional savings on new claims starting at $70 million annually in 2012.  By 2016, as the age eligibility lowers from 55 to 50, the annual loss to injured workers on new claims will be $103.3 million.

One good way to assess whether HB 2123 is pro-worker is to look at who's praising it. Dismissing organized labor's opposition, the Washington Technology Industry Association celebrated the fact "there were enough Democrats willing to vote against this powerful interest group" (apparently not acknowledging that the WTIA, and members like Microsoft, are pretty powerful interests too). It's also significant when a far-right group, the National Federation of Independent Business, which helped lead the I-1082 charge against "union bosses" and "Big Labor", praises a Seattle Democrat.  But there they were on Twitter highlighting a column where "Sen. Jeanne Kohl-Welles refutes bogus claims about recent workers' comp legislation."  

Just days prior to HB 2123's introduction, NFIB's tweets bemoaned the absence of public process for some budget-related bills, calling it a "[m]ockery of democracy."  Yet it has celebrated HB 2123's rushed journey to the governor's desk. 

The Senate Republican Caucus website heralds HB 2123 as a “landmark.”  In the accompanying press release, Janéa Holmquist Newbry, the Senate Republican lead on workers' compensation, said, “Not only am I especially grateful to my caucus but also to the Senate roadkill caucus." Holmquist Newbry was the Building Industry Association of Washington's superstar on behalf of I-1082. 

The House Republican lead on workers compensation, Cary Condotta, who has called HB 2123 a “huge” win for Republicans, attributed the idea of structured settlements to ultra-conservative Spokane Valley Rep. Matt Shea, touting him in a press release titled, “Shea idea on structured settlements breaks logjam on workers’ compensation reform.”

In April, Shea addressed a Patriots Unite conference in Idaho, where he told "birther" jokes and called for nullification of federal laws.  Poignantly, for someone given a lead role on worker protections, he was reported asking, "How many of you are willing to give up Social Security and Medicare?  That's the question we have to ask.  The federal government shouldn't be doing it."  At the 2010 John Birch Society-sponsored Freedom Action National Conference in Pennyslvania, Shea was listed on the program under a warning about the "power and wealth of organized labor."

So workers should feel good about an idea Rep. Shea came up with?   

Despite the Republican endzone dancing, the business community has made it clear they’ll move the goalposts after this touchdown.  And why shouldn't they, if it's clear even an all-cuts budget can be held hostage to force through any bad idea?  As Don Brunell of the Association of Washington Business said in a May 22 press release: “Voluntary structured settlements will provide some systemic relief, but this agreement cannot be the last step in the journey toward reform.”

It will take legislators like Sen. Kohl-Welles to ensure Republicans like Shea don't write the next steps in the "journey toward reform."   Given the utter improbability of legislative defeat so soon after their hard-won I-1082 victory,who could blame labor for worrying?   


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About the Authors & Contributors

Brendan Williams

Brendan Williams

Olympia attorney Brendan Williams was a Washington state representative from 2005-11.