Selling out injured workers

By Jeff Johnson

Just a month after celebrating the 100th anniversary of Washington’s workers’ compensation system, Governor Christine Gregoire, along with Senate Democrat and Republican leadership and House Democrat leadership, passed HB 2123, undermining the security of the safety net for injured workers by approving “structured settlement agreements” (compromise and release agreements) whereby workers will receive less than what they are entitled to under the law.

Injured workers 55 years of age or older, ratcheting down to those 50 or older by 2016, will be able to settle their claims at less than their statutory amount. You might ask why workers would agree to lower their benefits. For many workers it won’t be a choice. Strapped financially from receiving only partial wage replacement benefits, many injured workers will accept a lump-sum payment paid out over several months to meet family needs. And once the money is gone, they are just out of luck.

And it will happen. The Department of Labor and Industries assumes that the workers’ compensation state fund will save $335 million in fiscal year 2012 and over half a billion dollars by 2015. Most of these so-called savings will be in the form of lower benefits to injured workers.

Even worse, these settlement agreements are a lure for private insurers. After Initiative 1082, that would have allowed private insurance into our comp system, was defeated by nearly 60% and was voted down in every county, HB 2123 lays out a welcome mat for the private insurance industry. Denying claims and reaching settlement agreements are the means by which private insurers profit in the workers’ compnsation arena. Until now, Washington’s workers’ compensation market has not been all that attractive to private insurers. HB 2123 changes that.

HB 2123 also places a one-year cost of living freeze on injured workers’ time-loss and pension benefits, and offsets the value of a permanent partial disability award against an injured worker’s pension award – both these provisions will lower benefits for our most disabled workers.

The bill includes a positive program modeled after the Oregon “stay at work” program. This measure incentivizes small and medium size employers to bring their injured workers back to employment through offering wage, equipment, and training subsidies to the employer for 66 days. If this works, it will return workers to the job more quickly and reduce long term disability and costs.

The bill also sets up three studies which will look at occupational disease, structured settlement agreements, and the claims management process. Finally the bill continues some funding for health and safety grants that focus on workplace safety training.

While labor could have lived with many portions of the bill, the radical change to compromise and release is a huge and grotesque corporate give-away at the expense of our older and most disabled workers. Shame on the Democrats for selling out injured workers.

(Jeff Johnson is president of the Washington State Labor Council and a PSARA member.)