This Washington

PubliCola Picks "No" on Initiative 1082

By PublicolaPicks October 16, 2010

Initiative 1082, which would allow private insurers to enter Washington State's workers' compensation market, is a money-grabbing scheme for the Building Industry Association of Washington and for big insurers like Liberty Mutual. Both have poured a huge amount of money into the initiative—$1,000,000 from the BIAW, $600,000 from Liberty Mutual—and both stand to win big if it passes. Whether voters would be any better off is a different matter.

Currently, Washington State allows workers' compensation for employees through the Department of Labor and Industry, by guaranteeing workers comp employees itself; allowing business associations to insure their members through L&I; or by letting some large companies that meet financial standards the right to provide their own plans as long as the benefits match L&I's.

Under L&I's system, employees and employers each pay a portion of the premium.

Initiative 1082 would allow insurance companies to compete with the state, strip the state of much of its regulatory power—taking away the insurance commissioner's power to approve insurance rates, allowing insurance providers to take an undefined amount of time to delayed claims, and fail to extend existing consumer protection laws to the privatized workers' comp plans. It would also require businesses to pay the entire premium fee, which might seem like a good turn to voters, who want to lift the burden from employees. Really, though, businesses will end up passing costs on by cutting back on wages—or employees they can't afford to insure.

We think choice is good, and we're skeptical of the efficiency of the state's monopoly on workers' compensation, but giving insurance companies keys to the overhaul of our system—and allowing them to operate free of regulations—is a step in the wrong direction.

And then there's the BIAW. In recent years, the BIAW has used its group plan, called “Retro,” to pay for its political activities. Unfortunately for the BIAW, recent court rulings have halted this equation. Add that to steeply declining revenue from member dues and the BIAW's political machine (which illegally coordinated ads with Dino Rossi's 2008 campaign for governor, by the way) has been halted.

So, the BIAW has a new scheme—privatizing the whole system, so they can play middle man to big insurers and use "unabsorbed premium deposits"—unused premiums paid by employees, which the insurance commissioner would no longer be able to monitor—to fund their political causes again. Think we're being paranoid? The initiative specifically says that only group insurance plans that have existed for the last four years are eligible to take part in the new system—BIAW has the only group plan we can think of that meets this criteria.

Handing over workers' comp claims to the BIAW and Liberty Mutual is not the way to address concerns over insurance rate hikes caused by the down economy. A task force of labor and business leaders is currently meeting to offer suggestions to the legislature for workers' comp reform, to be delivered when the next legislative session begins. We think this is the proper way to manage the insurance system in the long run. We don't want insurance companies and groups like the BIAW making money off injured workers in Washington State while costing businesses undue financial strain and failing to assure a proper settlement to worker claims.

We’ve also endorsed on Initiatives  1100 and 1105 and 1107.

And don’t forget about PubliCola’s 32 No Brainer picks (including our Patty Murray, Joe Fitzgibbon, and Charlie Wiggins endorsements, and our anti-1053 endorsement).

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