March 12, 2010
To: Northwest Council Members
From: Northwest Legislative and Public Affairs Committee
Subject: PRESUBMITTED NEW BUSINESS: OPPOSITON OF INITIATIVE MEASURE 1067, AN INITIATIVE TO FORCE THE PRIVITIZATION OF THE WASHINGTON STATE INDUSTRIAL INSURANCE (WORKERS’ COMPENSATION) SYSTEM.
The Washington State Department of Labor and Industries (L&I) administers Washington’s workers’ compensation system which was created in 1911. This system provides insurance coverage for employers and workers through either the State Fund or through self-insurance for some of the largest employers. The State Fund covers the vast majority of Washington State employers – about 171,000 – and approximately 2,570,000 workers. Employers pay premiums to L&I for their workers’ compensation coverage. Their workers pay a significant share of the premiums – about one-fourth. This coverage pays medical expenses for workers who suffer job-related injuries or illnesses and, when workers are unable to work due to these conditions, partially replaces their lost wages. This no-fault system also protects employers from lawsuits that could otherwise result from job-related injuries and illnesses.
From the Washington State Secretary of State’s office:
Statement of Subject: Initiative Measure No. 1067 concerns industrial insurance.
Ballot Measure Summary
This measure would establish a joint legislative task force on industrial insurance privatization consisting of sixteen members: eight legislators, five representatives of business, two representatives of insurers, and one representative of labor. The task force would be directed to develop proposed legislation that would eliminate the state industrial insurance fund by December 1, 2011. Task force recommendations would be provided to the legislature by February 1, 2011. The legislature would provide staff and budget support.
This initiative, from the Building Industries Association of Washington (BIAW), mandates a forgone conclusion that an insurance system established to provide for working men and women when they are injured on the job would be best run by private insurance companies, no matter what the task force may discover in its investigation. This is not a rational approach to concerns about cost and the health and welfare of workers.
The workers’ compensation system here in Washington State has among the lowest cost programs in the nation and among the highest benefits to workers so why does anyone think there is a drastic problem with our system that requires such an extensive measure as to have other insurance companies manage the program? Have the insurance companies demonstrated any better performance? As one example, look at what the insurance companies did to California’s workers’ compensation system. The people of California had to bail out the irresponsible insurance companies in that state at a cost of billions of dollars.
The initiative is legally questionable and likely in violation of Washington State’s constitution which means that if it passes we will be spending millions of dollars of our tax money to litigate this initiative.
The initiative is also undemocratic as it creates a task force with five representatives from the business community, two from insurance companies and only one from labor.
For more information:
Washington State Department of L&I Facts about workers' compensation:
Washington State Labor Council: http://www.wslc.org/reports/Outside-EC2.htm
Secretary of State’s web site for initiatives: http://www.sos.wa.gov/elections/initiatives/people.aspx
Building Industries association of Washington (BIAW): http://www.biaw.com/
It is moved that: THE NORTHWEST COUNCIL OPPOSES INITIATIVE 1067 (I-1067) AND THEREFORE ENCOURAGES SPEEA MEMBERS, AND ALLOWS THE NORTHWEST L&PA COMMITTEE, THE LABOR DELEGATES AND SPEEA STAFF TO OPPOSE THE PASSAGE INTO LAW OF I-1067, AND TO EDUCATE, ENCOURAGE, AND PRESENT MATERIALS TO OTHERS IN ORDER TO ULTIMATELY BRING ABOUT THE DEMISE OF THIS INITIATIVE.
1. The measure is undemocratic and subrogates the health, welfare and interests of the workers in this
state to those of costs to businesses.
2. The measure is so poorly written and poorly conceived that it will be contested in court if it is passed
at a cost to us of millions of dollars.
3. Our state has a low cost system that both the workers and businesses pay into. The system is well
run and provides good benefits and assistance to injured workers. The system doesn’t need to be
wrecked by handing it over to insurance companies whose only interest is in making a profit.
1. Some members believe that competition will bring about lower costs and better benefits.
2. Some members will feel we have no interest in this issue as Boeing is a self-insured business.
3. Some members may believe that the system is abused too much.