Self-Insured Employers.
Workers' compensation insurance provides relief to workers from injuries or illness sustained in the course of their employment. Employers in Washington must obtain coverage either through the industrial insurance fund administered by the Department of Labor and Industries (L&I) or by qualifying to self-insure.
Self-insurance is a program in which the employer covers all costs associated with an on-the-job injury or occupational disease. Self-insured employers administer their own claims, and must maintain records of all payments and disputes. Self-insured employers may contract with a third-party administrator to administer claims. Third-party administrators must be licensed by L&I, and claims administrators must maintain certification through L&I. Self-insured employers have a long-term obligation to pay benefits during the lifetime of their claims. This commitment remains the employer's responsibility whether their self-insurance certification continues to be in effect or is surrendered or terminated.
State law authorizes certain public employers to form self-insurance groups. There are three categories of self-insurance groups: (1) school districts or educational service districts; (2) public hospital districts or hospitals; and (3) private hospitals. A self-insurance group is considered to be the employer for purposes of workers' compensation, and must comply with certain L&I requirements.
Decertification.
L&I must decertify a self-insured employer in circumstances where the:
L&I may delay withdrawing the certification of a self-insured municipal employer while the employer has an enforceable contract with a licensed third-party administrator that may not be legally terminated. However, the self-insured municipal employer may not renew or extend the contract.
If a self-insurance group or self-insured county, city, or other municipal employer has its self-insurer status terminated, L&I must fulfill its obligations including paying compensation. The decertified group or municipal employer remains liable to L&I and must reimburse L&I for all payments made through quarterly charges.
(In support) This bill is agency request legislation from the Department of Labor and Industries (L&I). It will provide L&I with the authority to administer and pay workers' compensation injury claims when a self-insured employer has been decertified. It is important to ensure that injured workers still receive benefits, particularly following a recent change to the law directing L&I to decertify certain municipal employers for violating a duty of good faith and fair dealing. This has not occurred yet, but L&I wants to be prepared to assist workers in these cases.
(Opposed) None.
(In support) This bill is requested by the Department of Labor and Industries (L&I). This bill gives L&I the authority to collect funding from decertified municipal employers to pay benefit costs. L&I has not decertified any municipal employers so far. L&I doesn't have the intention to decertify anyone.
(Opposed) None.
Representative Shaun Scott, prime sponsor; and Tammy Fellin, Department of Labor and Industries.
Tammy Fellin, Department of Labor and Industries.