November 7, 2017 Washington employer workers' compensation rates could decrease in 2018 The Washington Department of Labor & Industries is proposing an average decrease in employer workers' compensation insurance premiums of 2.5%% for 2018 (down from a 0.7% increase for 2017, a 2.0% increase for 2016 and a 1.8% increase for 2015). According to the Department's news release, the proposed 2018 decrease would save employers an average of about $34 a year per employee. The proposed decrease would result in Washington employers, as a group, paying $67 million less in premiums.? Rate increases in recent years and the improved economy have helped build reserves, allowing for the proposed rate decrease. In the last five years, the average annual workers' compensation rate increase has been under 1%. If adopted, this will be the first decline in the rate since 2007. Washington is the only state where workers contribute a substantial portion of the premium charge. Under this rate proposal, workers would continue to pay on average about 25% of the premium, similar to 2015- 2017. Individual employers may see their rates go up or down, depending on their recent claims history and changes in the frequency and cost of claims in their industry. The Department has published a proposed rate table online. Businesses are classified by risk classes, based on hazards in the industry. According to information posted to the Department's website, out of the state's 324 risk classes, 243 would have lower base rates in 2018. Note, however, that the supplemental pension rate (a premium for the fund that pays cost-of-living increases for pensions) is increasing 7.3% to 10.3 cents per hours. For many of the lower-rated risk classes, the supplemental pension rate is a significant portion of the rate and will cause an overall increase to the class rate even though other parts of the rate are decreasing. Employers may deduct from workers' wages up to half the supplemental pension premium rate. The Department offers employers a Claim-Free Discount that can lower their average base rate by 10% or more.? Final rates will be adopted by early December and go into effect January 1, 2018. ———————————————
——————————————— EY Payroll News Flash
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