Petition seeks private insurers for workers' comp

OLYMPIA — Unable to win in the Legislature, the state building industry is launching a ballot campaign to bring private insurers into Washington's state-run workers' compensation system for the first time.

The Democratic-controlled Legislature flatly rejected several business groups' proposals to change the system during the just-concluded legislative session. The Initiative 1082 effort sets up a ballot-box fight with the state's influential labor interests in an election year for most legislative seats.

"We've already figured out the Legislature is not interested in doing anything when it comes to workers' comp," said Erin Shannon, spokeswoman for the Building Industry Association of Washington (BIAW). "We've given the Legislature every chance; now we're taking it to the people."

I-1082 still is waiting for final approval of a ballot title, and Monday is the deadline for legal challenges. But BIAW launched its Web site, saveourjobswa.com, on Wednesday. So many people wanted to reserve copies of the initiative petitions that the Web site crashed, Shannon said.

The builders plan to use paid signature gatherers to help collect at least 241,153 valid voter signatures before the July 2 deadline for the effort to qualify for the November ballot. I-1082 is one of about 50 measures proposed so far.

Setting up competition

I-1082 would specifically let private insurers compete with the state's monopoly system, which is run by the state Department of Labor and Industries. About 350 large employers such as Boeing, Microsoft and Wal-Mart opt out and run their own programs in sync with state standards, L&I says.

It also would get rid of the requirement that workers pay into the workers' compensation fund, currently about 27 percent of the costs, L&I says. Private insurance will become an option for businesses in 2012 if the measure gets onto the ballot and passes.

Many business groups say the cost from L&I's system is too high, and they objected this year to rate increases of 7.6 percent, which hit during a tough economic time. Shannon said other states have lower rates than Washington's high-benefit system, and she argues it lacks the accountability that competition provides.

Gearing for fight

The Washington State Labor Council is gearing up for a big battle with its old nemesis, and council President Rick Bender said labor is building a broad coalition to fight back.

"We are strongly opposed to it because it is not in the interest of workers, nor do we think it's in the interest of small businesses as well — as they will soon find out from other states," Bender said. "We are considered a low-cost state and yet a high-benefit state."

Bender said other states' privatized systems have expenses for "high executive salaries for insurers" and for advertising. He predicted the initiative "is going to be financed by the insurance industry. It's no secret that the largest insurer that does workers' compensation is AIG, the one we taxpayers had to bail out."

The business lobby tried to lower costs for employers by allowing early settlement of medical claims this year. That effort and others went nowhere in the Legislature.

Washington's system requires workers as well as employers to contribute payments; the initiative would end that requirement.

Elaine Fischer, a spokeswoman for L&I, said Washington's system covers medical costs for on-the-job injuries, partial payment of lost wages and even rehabilitation and retraining.

"Our state does have some of the best benefits in the country for injured workers and their families, but at rates that are lower than half the other states," she said.