Average price of Washington workers' compensation insurance will go up slightly in 2022

Nov. 30, 2021

#21-038

TUMWATER — The state Department of Labor & Industries (L&I) today announced a 3.1 percent increase in the average worker’s compensation premium rate for hours worked in 2022.

“A modest hike is needed because of the rising costs to provide workers’ compensation coverage. It’s the first rate increase in five years,” said L&I Director Joel Sacks. “We’re using our contingency reserve to limit the increase for employers and workers next year, keeping premiums, on average, lower than they were in 2017.”

L&I has built up a contingency reserve over the years by carefully managing rate increases and keeping program costs down through improved health and return-to-work outcomes for workers. Those strategic decisions cushioned what could have been a larger rate increase. The rate increase addresses the rising costs due to cost-of-living adjustments for long-term cases, triggered by a rise in the state’s average wage.

With this rate increase, the average rate per $100 of payroll in 2022 will be $1.53, a 1.4 percent increase over 2021. Individual employers may see their rates go up or down, depending on their recent claims history and changes in the frequency and cost of claims in their industry risk classes. Workers will continue to pay on average about a quarter of the premium, a similar percentage to that paid in 2021.

Public hearings for the proposed 2022 rates were held virtually in October. A small number of people testified and submitted written comments during the rules process.

During the pandemic, L&I has helped thousands of businesses struggling to pay workers’ compensation premiums by offering a grace period for premium payments, along with payment plans for employers facing financial difficulties. Also, L&I is not including costs from claims for COVID-19 exposure when calculating premium rates.

Together in Keeping Washington Safe and Working

Employers and workers pay into the workers’ compensation system to help cover the cost of providing wage and disability benefits for workers injured on the job, as well as medical treatment of injuries and illnesses.

Every fall, L&I determines the proposed workers’ compensation rate for the following year by looking closely at several factors, including the expected workers’ compensation payouts, the size of the contingency reserve, wage inflation and other financial indicators.

L&I’s goal is to keep rates steady and predictable by helping prevent work-related injuries and illnesses, and helping injured workers heal and return to work. One of the primary ways the agency does this is by supporting recovery and providing services early in the claims process.

More information about 2022 workers’ compensation rates is available at www.Lni.wa.gov/rates.   

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Workers’ comp facts:

  • L&I workers’ compensation insurance covers about 2.6 million workers and about 187,000 employers in Washington.

  • The proposed rate is an average. An individual employer’s actual rate change may be more or less depending on that employer’s industry and history of claims that result in wage replacement and/or disability benefits.

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For media information: Herbert Atienza, (Herbert.atienza@Lni.wa.gov), L&I Public Affairs, 360-280-8674.

L&I Newsroom: https://Lni.wa.gov/news-events

Connect with L&I: Facebook (facebook.com/laborandindustries) and Twitter (twitter.com/lniwa).

CHA Washington