By Greg Kabacy, Employer Resources Northwest
Over the last couple of months, ERNW has provided information about how the Department of Labor and Industries has instituted a number of negative changes to the state retro program. These changes will ultimately result in lower refunds across the state for retro participants. Labor and Industries has been calculating retro refunds incorrectly for years and retro participants have been the beneficiary of these mistakes. That means that retro groups have earned millions of dollars more than they should have.
The Department of Labor and Industries has finally corrected these mistakes which will result in lower refunds. Moving forward, the gut reaction is to complain and attempt to force the department to reform its system so that retro participants can achieve the types of refunds they have had in the past. Ultimately this argument has very little ground to stand on, as contractors would be asking the department to figure out a way to provide them the same amount of money they received in the past, even though they did not deserve it.
The other option (and the only real solution moving forward) is to concentrate on our retro group’s performance. Based on all the changes that the department made, if employers and retro groups can reduce their loss ratios (developed losses divided by standard premium) by seven percentage points, the resultant losses by the Department’s miscalculation would disappear. The quickest way to reduce losses are to prevent injuries from occurring, and if an injury does occur, provide light duty and/or Kept on Salary (KOS) as needed. The key to surviving L&I miscalculation to retro is simple: perform better.
For information on reducing loss ratios or the ABC Retro Program, please contact Greg Kabacy at (800) 433-7601, extension 803.