L&I Announces Proposed 2022 Rates

Notbook with workers compensation drawing on front with calculator and highlighter

An Increase is Expected

Labor and Industries (L&I) recently announced proposed 2022 base rates for each of Washington’s 300 industrial insurance risk classifications. When considering all risk classes in the state, the proposal amounts to an average 3.1% increase, although specific risk classes may see rates move higher or lower than that. For a list of all risk classes, go to Proposed Rates (wa.gov)

L&I attributes much of the increase to a rise in the Supplemental Pension Fund (SPF) portion of your rates, which pays for cost-of-living adjustments (COLA) on lifetime pension claims. Pension COLAs are indexed to the state’s average wage and Washington experienced a 10.1% increase in the state average wage last year.

How are Base Rates Determined?

Base insurance rates vary by risk class and industry type. The amount of base rate you pay is determined by your company’s workers’ compensation experience. L&I looked at the hours and claims reported for your company from July 1, 2017, to June 30, 2020, to estimate how much loss you are likely to have next year. From there, they determined how much premium they need to collect to pay for those losses.

There are things you can do now to lower your experience modification factor in future years and lower the amount of premium you’ll need to pay for your industrial insurance.

  • Build a strong safety program. Safety is the most proactive thing an employer can do to improve worker’s compensation performance. Avoiding injuries lowers your overall premium and helps maximize your refunds if you participate in the Retrospective Rating (Retro) program.
  • When injuries happen, return your employees to work as quickly as medically appropriate. Time away from work is detrimental to you, your employees and your bottom line. By bringing people quickly back to work, you can lower claim costs, lower your insurance premiums and increase your Retro refunds.

Get More Information

For more information and training on how industrial insurance rates are determined, please sign up for one of our upcoming training webinars at www.ernwest.com. If you want to talk about strategies for lowering your rates in the future, please contact ERNwest.

You can read L&I’s full announcement online and get access to the virtual rates hearing on Oct 26, 10 AM. You’ll have the opportunity to provide public comments on the new proposed rates that will go into effect on January 1, 2022. Notification of final rates will be sent out in December.

Like this article?

Share on facebook
Share on Facebook
Share on twitter
Share on Twitter