I-1082 will hurt higher education, local government
Initiative 1082, which would allow private insurance carriers to cover workers' compensation in our state, would actually hurt many businesses, higher education and local government, write Sen. Jeanne Kohl-Welles, D-Seattle, and Rep. Steve Conway, D-Tacoma.
Special to The Times
THIS November, voters will determine the outcome of an initiative that would add costs to every university, community and technical college in the state, force small businesses to pay $315 million extra next year and every year after that, and pit people who get injured at work against the insurance industry.
That's Initiative 1082, a shining example of how the citizen's initiative process has been co-opted by special interests.
In some ways, I-1082 is dangerously simple. It would end Washington's public nonprofit workers' compensation system by allowing private insurance carriers to cover workers' comp in our state. But when you explore the fine print, it becomes obvious that I-1082 benefits the few at the expense of our state's business owners and working families.
As chairs of the relevant policy committees in the Senate and House, we have spent a great deal of time in work sessions making improvements in our workers' compensation system. And we support the task force convened by the governor — comprised of business and labor representatives — that is working to come up with recommendations to the Legislature when it convenes next January. We fully expect to enact legislation during the 2011 legislative session based on these recommendations.
But I-1082 is not the way.
The initiative would force small business owners and state and local governments to pay the share of workers' compensation premiums now paid by employees. This would go into effect immediately and permanently, and business owners would pay regardless of whether they stay in the state system or go with a private carrier.
Even the proponents of I-1082 say this change will cost small businesses $315 million. It comes at a uniquely bad time, and with our state just now beginning to make some headway after a horrible recession.
Higher education and local governments would suffer as well. The University of Washington can expect to pay about $2 million in added workers' compensation costs if I-1082 is approved. Washington State University would be hit by $505,000. The impacts are marbled across the state: Columbia Basin College, Grays Harbor College, Lake Washington Technical College and every other community and technical college would pay more under I-1082.
Fire districts would also feel an impact. Given what they paid the state Department of Labor & Industries last year, fire districts across Washington can expect a hit of $1.1 million annually.
Again, every corner of the state would pay more: South King Fire and Rescue, Clark County Fire District, Kittitas County Fire District, to name a few.
Proponents say private insurance carriers would save businesses money in the long run because, in theory, they would manage claims more efficiently. But there is much reason to be skeptical.
For one thing, the insurance industry has higher overhead than the state system. Private companies must pay CEO salaries and marketing budgets. And to be worth it all, they must make excessive profits.
So how would they offer all these savings? By delaying and denying claims by people injured on the job. And I-1082 would hand the insurance industry the tools to do just that.
In fact, Insurance Commissioner Mike Kreidler opposes I-1082 because he says it gives workers' compensation insurers special exemptions that no other line of insurance is allowed. Section 3 of the initiative exempts these insurers from the Insurance Fair Conduct Act, meaning workers' compensation insurers could intentionally delay and deny legitimate claims — with virtually no way to hold them accountable.
It's tough to keep track of all the initiatives this year. There's a lot of information thrown at voters. But if you take the time to do some research, we're sure you'll come to the same conclusion we did, and reject I-1082.Sen. Jeanne Kohl-Welles, D-Seattle, left, chairs the Senate Labor, Commerce & Consumer Protection Committee; Rep. Steve Conway, D-Tacoma, chairs the House Commerce & Labor Committee.