HOUSE BILL REPORT

HB 2509

BYRepresentatives Vekich, Smith, R. King, Leonard and Prentice; by request of Department of Labor and Industries

Revising provisions for industrial insurance death benefits.

House Committe on Commerce & Labor

Majority Report:  Do pass. (11)

      Signed by Representatives Vekich, Chair; Cole, Vice Chair; Smith, Ranking Republican Member; Forner, Jones, R. King, Leonard, O'Brien, Prentice, Walker and Wolfe.

House Staff:Chris Cordes (786-7117)

Rereferred House Committee on Appropriations

Majority Report:  Do pass.  (27)

      Signed by Representatives Locke, Chair; Grant, Vice Chair; Silver, Ranking Republican Member; Youngsman, Assistant Ranking Republican Member; Applewick, Belcher, Bowman, Braddock, Brekke, Dorn, Doty, Ebersole, Hine, Holland, Inslee, May, McLean, Nealey, Padden, Peery, Rust, Sayan, Spanel, Sprenkle, Valle, Wang and Wineberry.

House Staff:      Michelle Hauth (786-7384)

AS REPORTED BY COMMITTEE ON APPROPRIATIONS ON FEBRUARY 3, 1990

BACKGROUND:

If a deceased worker was eligible for industrial insurance benefits, his or her surviving spouse receives monthly payments according to the statutory benefit formula until death or remarriage.  If the spouse remarries, the monthly pension ceases at the end of the month in which the marriage occurred.

Upon remarriage, the spouse may choose to settle his or her remaining benefit claim by receiving either:  1) a lump sum payment of $7,500, or 2) 50 percent of the annuity value of the remaining benefits, whichever is less.  The spouse may also decide not to take the settlement.  In that case, if the new marriage ends because of death or court action, the spouse may again receive the monthly pension payment.

In about half of the states, a remarrying surviving spouse receives a lump sum settlement, usually equivalent to two years compensation.  In other states, the surviving spouse's compensation ends upon the spouse's remarriage.

SUMMARY:

For cases involving injuries occurring on or after the effective date of the act, the lump sum option that an injured worker's surviving spouse may choose upon remarriage is changed from $7,500 (or 50 percent of the annuity value of the remaining benefits, whichever is less) to a lump sum amount equal to 24 times the monthly compensation amount (or 50 percent of the annuity value of the remaining benefits, whichever is less).

CHANGES PROPOSED BY COMMITTEE ON APPROPRIATIONS:  None

Fiscal Note:      Requested January 6, 1990.

House Committee ‑ Testified For:    (Commerce & Labor)  Bob McCallister and Mike Watson, Department of Labor and Industries.

(Appropriations)  Mike Watson, Department of Labor and Industries, Special Services Division.

House Committee - Testified Against:      (Commerce & Labor)  No one.

(Appropriations)  No one.

House Committee - Testimony For:    (Commerce & Labor)  The lump sum option available upon remarriage of an injured worker's surviving spouse has not been changed for 19 years.  Under the proposal, the average lump sum option would be about $21,000. The proposal would be more equitable and would bring Washington up to the standard recommended by the National Workers' Compensation Standards Act in 1974.

(Appropriations)  This increase in benefits is a department request.  There is no direct appropriation required as the benefits are paid from the Accident and Medical Aid Funds.  The reaction of the department is that this would be a net savings to the funds.  With the existing $7,500 lump sum payment, it is considered a financial disincentive to marry again.

House Committee - Testimony Against:      (Commerce & Labor)  None.

(Appropriations)  None.