Schurke said she is concerned that characterizations of a State Auditor's report on the State Fund could lead people to believe incorrectly that the system will soon be insolvent.
"I want to assure every Washington worker that the benefits they need if injured on the job will continue to be available today and in the future," Schurke said. "Businesses also need to know that L&I continues to provide the insurance coverage that they expect and count on."
She said confusion appears to come from a misinterpretation of the audit when it mentions the probability of "insolvency" in the State Fund. The insolvency mentioned in the audit refers to the contingency reserve, which is like a rainy day fund and which is only a very small portion of the system's current total assets of $11 billion.
"The last thing we need to do is overreact to the possibility that the contingency reserve is low," Schurke said. "In times like these, we need patience and a long-term view." She said it's important to recognize some interest groups and lobbyists have seized on the audit as a way to advance their agendas to change significantly workers' compensation.
"The fact is, we made a deliberate decision to draw down the contingency reserve in order to keep premiums low and help businesses keep their doors open in this tough economic time," Schurke said. "This has been done before and this year it's more important than ever that we keep insurance costs as low as possible," she said. "This was the right thing to do and doesn't threaten the long-term financial integrity of our system." (workersxzcompxzkit)
Schurke added, "I understand we're cutting it closer to the edge this year, given the economy. That's why we are looking intensively at every way to cut costs while still providing protection for injured workers and employers."
Author Robert Elliott, executive vice president, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers' Compensation costs, including airlines, health care, manufacturing, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. He can be contacted at: [email protected] or 860-553-6604.
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