Workers’ comp deal: “We have now produced what I consider to be a good system”

Gov. Chris Gregoire and leaders from the four corners of the Legislature have reached an agreement on workers’ comp reform that includes a structured settlement, COLA freeze and anti-fraud provisions. She thanked lawmakers and said they’ve “worked very intensely, very hard to get the job done.”

She said the goals of workers’ comp reform are to get workers back on the job, avoid double-digit rate increases and bend the cost curve in the pension system. She said this bill represents the largest financial reform in workers’ comp history.

“It does include a COLA freeze for one year,” she said, adding that she knows its hard. “It does create a rainy day fund,” she said, to smooth out rates in the future and avoid double-digit increases. She said the bill also includes a claim resolution structured settlement — allowing some workers to accept settlements instead of staying on lifetime pensions.

“The budget negotiations are going on, they’re going strong … they’re by no means done,” she said. “I hope that we’ll be able to see an opportunity for us to Sine Die and not come back anytime soon,” she said.

Gregoire said the reform produced what she considers to be a good system.

Sen. Lisa Brown spoke next and thanked everyone involved. And Sen. Mike Hewitt says the last three days have been the most intense of his work life. He thanked legislative leaders for being respectful. He said Republicans didn’t get everything they wanted, but they did get meaningful reform.

Rep. Frank Chopp said he’s pleased that most of what the House wanted made it into the bill. “I’m also pleased that it’s only a one-year COLA … rather than a two-year,” he said. He said the claims resolution was the most contentious part, but he’s pleased that there are no lump-sum payments. He said that could potentially take advantage of people in desperate situations.

Rep. Richard DeBolt said there is systemic change in the bill. “It’s probably the largest change we’ve seen in effect for years — and years to come,” he said. “I’m glad that we could do what we could do to protect the injured workers on the COLA freeze,” he said.

Gregoire wrapped up the statements by saying no one won or lost — the bill represents a crafted compromise.

Now, for questions.

Gregoire was asked how she’s confident that enough people will take the settlements to save the state money. Gregoire said that when lawmakers started talking about settlements, L&I got a lot of calls from people who were interested. But: “They don’t want it mandated. They want the options,” she said, and this bill provides that.

She said one concern with a lump sum payment for settlements is that some people would run through the money and then circle back to be dependent on state safety net programs. She said structured payments help avoid that.

Chopp said Democrats in the House had a good caucus discussion on the bill today and they’ll continue the conversation tomorrow. He said they plan to vote count in the morning and vote the bill off the floor tomorrow. Brown said the Senate would vote as soon as the bill is delivered from the House — possibly as soon as tomorrow.

Hewitt said all the lawmakers at the negotiating table shook hands when they reached a deal. He said he’s confident the bill will sail through the process.

One reporter asked whether there would be a public hearing on the bill. DeBolt said there have already been public hearings on almost every element of the bill. Gregoire said the only element that hasn’t had a public hearing is one to prevent fraud. She said lawmakers agreed that no one would want more fraud.

More on the structured settlements: Gregoire said it will be structured as a monthly payment that will not be able to be sold on the private market for a lump sum. She said the structured settlement is reached through a negotiation, and all settlements — whether represented by an attorney or not — will need to be approved. She said there’s a specific provision that says if anyone tries to coerce workers, they’ll face still penalties.

“Any kind of change causes people to be concerned or afraid. At the end of the day … this is a fair package and their interests were clearly discussed,” she said, of workers, trial lawyers, business, labor and everyone else involved.

Tags: L&I, workers' comp