The Iowa legislature is considering a bill that will lower workers’ compensation premiums for Iowa businesses by cutting benefits for those people the businesses injure. Mike Ralston, President of ABI claims that Iowa’s workers’ compensation system is out of balance due to the influence of lawyers and judges and cites an Oregon survey that shows Iowa now ranks 24th lowest in premiums whereas Iowa was 7th lowest in the 2006 version of that survey. Ralston misconstrues that data.
Insurance premium rates fluctuate from year to year. In 2004 Iowa’s index premium was $1.91 per $100 of payroll. In 2006 the index premium dropped to $1.75. Iowa premiums have been relatively stable since then, always within the range set in 2004-6. Iowa has best balance between premiums and benefits in the nation. Nothing is broken or out of balance in Iowa. Premiums in Iowa fell from 2014 to 2016 and I predict that they will continue to drop without any legislative changes.
Iowa’s ranking has changed because other states reduced premiums, most commonly by cutting the benefits injured workers receive. Those states are competing to see who can be most stingy with their own citizens. That is a race to the bottom that no state should want to win. A side effect of entering that race is that the cost of workplace injuries is shifted onto taxpayers through public assistance and onto the businesses where the injured person would have shopped if the injured person had adequate resources.
Balance is important and parts of the pending bills deserve consideration. However, other parts unreasonably reduce or cut off benefits when the injured person still needs those benefits. This legislation needs more thoughtful work. Iowa should treat all its citizens fairly and kicking those who are down creates more problems than it solves.
• Michael Trier served as Iowa Workers’ Compensation Commissioner from 2002-2005 after serving as a deputy commissioner since 1984.