Washington Raises Workers’ Comp Benefits, Pays Dividend to Employers

Workers currently receiving Washington workers’ compensation wage-replacement or pension benefits will receive a 5.018 percent cost-of-living increase, according to the state Department of Labor and Industries (L&I). State law requires that benefits be recalculated each year to reflect the change in the state’s average wage.

Also increasing will be the amount L&I pays for a permanent partial disability (PPD). That annual increase is based on the change in the Consumer Price Index. PPD awards will rise 2.88 percent for workplace injuries incurred July 1 and beyond. PPD awards go to workers who have lost a body part or suffered a permanent, disabling injury.

Under Washington’s workers’ compensation system, injured workers receive from 60 percent to 75 percent of their income, up to the legally set maximum, tax free, while they are off the job and recovering. For workers injured in 2007, the average monthly time-loss paid was about $1,749.

The recalculation of benefits is based on the average annual wage of all workers in Washington. That wage, calculated by the Employment Security Department, rose to $44,721 in 2007, an increase of 5.018 percent from 2006.

As a result, the new maximum monthly benefit will be $4,472.10, or 120 percent of the state’s average monthly wage, for workers injured after June 30, 1996. Less than 2.5 percent of L&I claimants receiving wage-replacement benefits collect the maximum.

Maximum benefits differ depending on when an injury occurred because, in 1996, the state legislature increased the percentage of the state’s average wage used to set the maximum benefit.

The July 1 increase applies to both State Fund and self-insured employers.

Also, L&I has begun mailing dividend checks to 100,000 employers as the final step of a process to return excess funds from the state’s workers’ compensation system. Another 28,000 employers will receive credit toward their next workers’ compensation premiums. The remaining 11,000 employers will have their dividends applied to premiums already owed or other debts.

“L&I strives to make sure no individual or group pays more or less than it should for workers’ compensation insurance,” said Director Judy Schurke.

“Last year, employers and workers enjoyed a partial workers’ comp rate holiday,” she explained. Employers and workers saved more than $300 million in workers’ comp premiums by not paying Medical Aid fund premiums during the second half of 2007.

The dividends will total $37 million, and dividends will average $266 per employer.

More information is available at www.lni.wa.gov/ClaimsIns/

Insurance/RatesRisk/RateHoliday/Default.asp.

Topics Commercial Lines Workers' Compensation Business Insurance Washington