Washington Voters Reject Privatization of Workers’ Compensation System

Voters in the state of Washington have rejected a measure to inject private insurer competition into the state’s workers’ compensation system.

The insurance industry hoped to open up the state’s workers’ compensation insurance system to the private market and eliminate the Department of Labor and Industries’ monopoly on the system by passing Initiative I-1082. However, nearly 59 percent of voters rejected the initiative.

The I-1082 campaign was led by the Building Industry Association of Washington, a trade group active in conservative politics.

Insurers and other statewide business groups also supported the initiative. The Independent Insurance Agents and Brokers of Washington had put more than $300,000 toward the effort to pass the initiative.

The opposition campaign was led by the state trial lawyers’ association and organized labor groups.

“Our members, as well as the rest of the industry, are very disappointed,” said Daniel Holst, IIABW executive vice president. He said anticipated double-digit rate increases expected to be announced by L&I, combined with a more conservative legislature, “will increase the chances of incremental changes to the workers’ comp system.”

At present, Washington is one of just four states that do not allow private companies to offer workers’ compensation insurance, although some employers self-insure under state supervision.

I-1082 would have allowed private insurance firms to offer their own plans in competition with a state-run system. It also would have dropped the current state mandate for employees to pay a share of premium costs.

IIABW and the BIAW have said they will continue to push for a private carrier option in the coming legislative sessions. However, the insurance association acknowledged that the chances of any legislation passing in its favor this session are very slim, Holst said.

Topics Workers' Compensation Talent Washington