Workers’ compensation insurance rates are heading in the right direction, with the Washington state Department of Labor and Industries proposing a 5.2 percent decrease in average premiums for 2019.

Before L&I approves those rate changes in December, however, it should look closely at whether the rates could be decreased further. Some industry observers contend the premium decreases could be even greater.

Kris Johnson, president of the Association of Washington Business, which serves as the statewide chamber of commerce, has said the reduction could be greater due to the growing economy and L&I’s growing reserve fund. If rates could be reduced further and still enable the state to break even on its reserve fund, L&I should take that step. After all, Johnson contends, Washington’s worker’s compensation insurance is the most expensive in the country.

Regardless, L&I and the business community alike can applaud one of the contributing factors to rate decreases—a decline in workplace injuries. We’ll get back to that in a moment.

L&I boasts that the 2019 rate reduction is the largest drop in workers’ compensation premiums since 2007. A typical employer will pay $58 less per employee next year, and an average employee’s share of the cost will decrease $6 a year. In aggregate, employers and their employees in Washington will pay $136 million less in premiums next year if rates are passed as initially proposed, a welcome respite in a business climate in which regulatory costs seem to be on a constant upward trajectory.

While the average rate change stands at 5.2 percent across all job classifications, the differences vary more dramatically for different professions. In the construction industry, for example, proposed premium changes range from a 13 percent decrease for plumbers to a 2 percent increase for telephone and electrical alarm system installers.

Joel White, executive officer at the Spokane Home Builders Association, points out that in past years, many construction companies sustained rate increases greater than the average. In the proposed rates for next year, premiums fall or are flat in nearly all of the industry’s job classifications.

Rate changes have a number of factors, but one of the reasons for premium decreases is a reduction in workplace injuries, something that both L&I and business groups can claim as a victory.

L&I describes a “big drop” in injuries since 2012 and points to programs that involve improving safety, but just as importantly, getting people back to work sooner after getting hurt. The state’s Stay At Work program, for example, pays for some employers’ costs in keeping workers in light-duty roles while healing. Since 2012, state figures show, the program has helped keep 27,000 people in the workforce during recovery, a laudable achievement.

Steps still need to be taken so that employers in Washington state are paying workers’ compensation rates that are more in line with what those in others states pay. For now, however, the proposed decrease is moving the needle in the right direction.