‘Lump-sum’ a major sticking point in Washington state
Around the nation, workers’ comp impasses abound
An April 22 piece at Huffington Post picks up on the topic, focusing on a battle in Maine over psychological injuries received in the line of duty (a particular concern for first responders), but concluding with an overview of nationwide perspective:
There’s a flurry of legislative activity around the country — notably in Maine, North Carolina, Illinois, and Montana — geared towards reining in the costs to employers of workers compensation claims. Maine Governor Paul LePage (R), who’s already sparked a high-profile battle with the state’s labor groups, went so far as to mention workers comp reform in his inaugural address. Illinois Governor Pat Quinn (D) recently told his state’s enthusiastic Chamber of Commerce that workers comp reform will happen “this year.”
While some bipartisan efforts exist, Republicans generally push the reforms, which business groups and insurance trade associations support. And though many of these discussions have been brewing for years, the ongoing efforts seem to dovetail nicely with the anti-labor zeitgeist fostered in Wisconsin and Ohio, as stories of able-bodied workers gaming the system now abound in legislative halls.
Evergreen State battles over budgets and ‘lump-sum’ proposal
In Washington state, legislators are struggling with three huge, interrelated issues–the state’s operating budget, its construction budget and workers’ comp reform. House and Senate leaders are so divided that they failed to reach agreement last week when the regular term ended, so Gov. Chris Gregoire has called a special session to revisit the issues beginning April 26.
A ‘permanent battleground’
An April 23 article in the Seattle Post-Intelligencer had this to say about the longstanding feud:
A permanent battle ground for organized labor and business groups, the fight to reform the state’s compensation system for injured workers is heading into overtime after Gregoire deemed it a special session issue and the Senate backed that by putting a bill they want to move forward in their budget. Indeed, business groups and the Senate aren’t giving up a measure that would establish the option of lump sum settlements to the system — a move they will save hundreds of millions of dollars in costs. But labor remains opposed any kind of settlement, saying it undermines the point of the system — one created in 1911 to provide injured workers with money as they heal. The House has proposed its own package of bills that nip-and-tuck the system to streamline it, and they say those changes would add up to about half a billion in savings in the next six years.
Workers’ comp system faces insolvency
As we wrote in earlier in the year, “The Seattle Times calls “one of the most contentious issues in the legislative session.” In February, an emergency rate hike was pushed through, and in January the governor was being praised for a ‘bold plan’ to revamp the system.
“Now, despite progress on different bills, officials are saying hard choices loom ahead, with chances of having a bankrupt system within five years, according to a Feb. 26 piece in the Seattle Post Intelligencer, which reports that the governor, ‘the head of the state Department of Labor and Industries and the state auditor have all said the system is heading toward bankruptcy. In a December report, the auditor’s office said the state’s fund for workers compensation has a 95 percent chance of becoming insolvent in the next five years.’ ”
According to the DLI, about 8 per cent of workers’ comp claims account for nearly 85 per cent of costs, due both to injuries requiring longterm recovery and rehab and also for those awarded lifetime pensions.
Editorial calls for letting workers decide
An editorial in today’s Tacoma News Tribune argues that organized labor has stubbornly drawn a line in the sand and that the lump-sum option has plenty of worker safeguards:
Unions’ attacks on the proposal have a decidedly paternalistic tone. Critics essentially argue that workers don’t know what’s good for them and if given the option of settling their claims for about 80 cents on the dollar, they might just foolishly take it.
Lump-sum settlements would no doubt prove popular here, just as they have in the 44 states that offer them. Many injured workers prefer to get their money upfront rather than have it dribble out in regular checks. In some places, labor has embraced the choice as a worker benefit, which it is.
The settlements would be strictly voluntary, and several safeguards are built into the proposed system to ensure workers make the decision with their eyes open.
The new House proposal improves worker protections even further. Workers would have to wait six months to settle their claims to ensure that they weren’t pressured into premature decisions. Settlements couldn’t be offered to workers who already have pensions, and lump-sum settlements would be allowed for lost earning power only, not medical claims.
Those changes reduce the possible savings to the workers’ compensation system while still retaining a settlement option that would lend the system greater predictability.
Doing nothing should be out of the question. The status quo – a system in which Washington grants lifetime pensions at an unrivaled clip and where about 85 percent of compensation costs come from only 8 percent of all claims – is not sustainable without huge increases in payroll taxes.
Maybe the Governor can push the lege to finally reach consensus and get this problem solved for the workers of Washington State.
Next time: an update on other battles around the country.
Frequently enough, a worker’s compensation case may be so complex as to demand legal representation. However, sometimes what seems like a cut-and-dried situation to an injured worker may result in a smaller award than envisioned–or even a denial. Have you, a friend or a loved one been injured on the job? Whether you’re merely seeking answers about your rights or believe a lawsuit may be necessary, be sure to seek counsel with attorneys trained and experienced in workers’ compensation. Here’s some resources:
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