OLYMPIA, Wash. - State lawmakers say they have reached an agreement on how to overhaul the state's workers' compensation system, clearing perhaps the biggest hurdle to hammering a budget out before the end of the special session on Wednesday.
Gov. Chris Gregoire and leaders from both parties said Sunday night that they've agreed to a plan to offer limited "structured" settlements to older workers who get injured, a move they believe will help improve the financial health of the system.
Lawmakers who had been struggling for weeks to compromise on workers' compensation now hope to pass the bill Monday.
This would help clear passage for a finalized state budget, though lawmakers are still at odds over a few issues, including a proposed constitutional amendment requiring part of the budget be used to pay down between 7 to 9 percent of the state debt.
Under the proposed bill, cost of living adjustments (COLAs) on worker's compensation payments would be frozen for one year (through the second July 1 after the claim date).
The bill would also offer subsidies to employers who bring workers back to a job quickly, and create a "rainy day fund," funded through worker's compensation reserves, to help reduce rate increases for employers.
But the point that's caused the most contention is the settlement option for older injured workers.
Previous proposals would have allowed the option for large lump sum settlements rather than pursuing lifetime disability pensions, but were shot down.
The version announced Sunday instead would allow some injured workers the option of what lawmakers call a "structured settlement."
Rather than resolve a claim through the worker's comp system, an injured worker could take periodic payments. The payments would range from $982 to $5,976 a month, depending on the terms of the settlement.
"No lump sum payments expanded there," said House Speaker Rep. Frank Chopp, a Democrat from Seattle. "I was concerned, very concerned of lump sums, large financial settlement up front that could potentially take advantage of people in desperate situations."
The option would be available initially to injured workers 55 years and older, then decrease the age floor to 53 in 2015, and 50 in 2016.
Lawmakers estimated the settlement option alone could save taxpayers $335 million in 2012, and $545 million over the next four years. Estimates were based on the notion that a claimant would likely be willing to take a larger periodic payment and get out the worker's compensation system for a settlement that is roughly 80 percent of the original claim, according to the governor's office.
Lawmakers say they'll also save on administrative costs.
The agreement is drawing opposition from the Washington State Labor Council, who said the bill creates a "Let's Make a Deal" situation that may work against injured workers
But lawmakers in Olympia said they're acutely aware the special session is costing taxpayers about $10,000 a day and the deadline is looming.
"We're in a critical time, there's only so many days left," said Republican Representative Dan Kristiansen, of Snohomish. "We've been told we're going to be able to vote on this thing tomorrow."
"We all want to get out of here on Wednesday as much as possible," said Democratic Rep. Jim Moeller, of Vancouver. "People are confident what we've agreed upon with the Senate and the House and that we've got something that we can go forward with."
The breakthrough came after an increasingly frustrated Gov. Gregoire, in essence, forced party members to come to the table, hashing out several details in closed-door marathon sessions in her office.
"It was very difficult and we had some very tense moments in there, as you can imagine," said Senator Mike Hewitt, a Republican from Walla Walla.
The result, Gregoire announced, is "a four-year savings of $1.12 billion to create a sustainable system for both workers and employers."
"We got some systemic change in this bill. maybe could have been more, but this year, this is a great deal," said Representative Richard DeBolt, a Republican from Chehalis.
