By Greg Kabacy, Employer Resources Northwest
Recently the Department of Labor and Industries announced that it was raising workers compensation rates by an average of 7.6% statewide. This was a bit of surprise as the actuaries at the department have indicated that for Labor and Industries to stay solvent, it should raise rates by over 19%. The department is banking on the economy turning around within the next year thus increasing the amount of premiums employers would pay, making up the difference between the proposed 7.6% and the recommended 19%. If the economy does not improve over the next year as projected by L&I, a double digit rate increase for 2011 will be necessary.
ABC’s Retrospective Rating Program can help you financially deal with this proposed rate increase. By being a positive contributing member of the ABC Retro Program and controlling your workers compensation costs, your refunds can help offset the increase in premiums.
ABC’s Retro group is primarily a performance-based program. While it may not seem like providing light duty or Kept on Salary (KOS) options for injured workers is financially feasible, in this economy, by providing these options you may be increasing your own individual refunds within the group. The group average for ABC for the 2007-2008 plan year was 26%. By successfully controlling workers’ compensation costs, some members received refunds above 30%. This amount of return would easily offset L&I’s proposed rate increase.