NU Online News Service, Jan. 3, 3:55 p.m. EST
The Washington State Auditor's Office raised concerns in a recent report about the state's workers' compensation program, stating that the Accident Fund within the program is insolvent and that rate increases or modified benefits will be needed going forward.
The annual report from State Auditor Brian Sonntag said, "As of June 30, 2010, the Workers' Compensation Accident Fund was insolvent," which he defined as liabilities in excess of the value of assets.
Though the fund is insolvent, Mr. Sonntag noted that it still has sufficient assets to pay claims and perform day-to-day services.
Mr. Sonntag said significant premium rate increases would be necessary for the fund to break even.
He also said the Workers' Compensation Program had an unfunded liability of $12.8 billion for supplemental pension cost-of-living increases provided to workers and their dependents who receive disability payments.
Washington Department of Labor and Industries spokesperson Elaine Fischer said the department is aware of the report, and said the insolvency mentioned refers to "a small portion" of the state's workers' comp system. The entire system, she said, has assets of $11 billion.
She said the department agrees with the auditor that it is important to have a plan in place to restore a surplus, and she added the department and governor are looking at different ways, including cost-cutting, to achieve this.
The deficit in the fund, she said, was due to the recession and slow recovery. The department, she said, drew down its surplus to keep workers' comp rate increases down.
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