H-1856              _______________________________________________

 

                                                   HOUSE BILL NO. 1090

                        _______________________________________________

 

State of Washington                              49th Legislature                              1985 Regular Session

 

By Representatives Wang, R. King, Patrick, McMullen and Sayan; by Joint Select Committee on Workers' Compensation request

 

 

Read first time 2/8/85 and referred to Committee on Commerce & Labor.

 

 


AN ACT Relating to workers' compensation benefits, offsets and insuring workers' compensation benefits through self-insurance; amending RCW 51.08.100, 51.08.140, 51.32.050, 51.32.060, 51.32.080, 51.32.220, 51.14.010, 51.14.020, 51.14.070, 51.14.150, 51.14.160, 51.32.055, and 51.44.150; and adding a new section to chapter 51.32 RCW.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

 

        Sec. 1.  Section 51.08.100, chapter 23, Laws of 1961 and RCW 51.08.100 are each amended to read as follows:

          "Injury" means a sudden and tangible happening, of a traumatic nature, producing an immediate or prompt result, and occurring from without, and such physical conditions as result therefrom.  This definition shall be construed without regard to whether the worker's exertion was usual or unusual.

 

        Sec. 2.  Section 51.08.140, chapter 23, Laws of 1961 and RCW 51.08.140 are each amended to read as follows:

          "Occupational disease" means such disease or infection as arises ((naturally and)) proximately out of employment under the mandatory or elective adoption provisions of this title.

 

        Sec. 3.  Section 51.32.050, chapter 23, Laws of 1961 as last amended by section 18, chapter 63, Laws of 1982 and RCW 51.32.050 are each amended to read as follows:

          (1) Where death results from the injury the expenses of burial not to exceed  two thousand dollars shall be paid.

          (2) (a) Where death results from the injury, a surviving spouse of a deceased  worker eligible for benefits under this title shall receive monthly  for life or until remarriage payments according to the following schedule:

          (i) If there are no children of the deceased  worker, sixty percent of the wages of the deceased  worker but not less than one hundred eighty-five dollars;

          (ii) If there is one child of the deceased worker and in the legal custody of such spouse, sixty-two percent of the wages of the deceased  worker but not less than two hundred twenty-two dollars;

          (iii) If there are two children of the deceased  worker and in the legal custody of such spouse, sixty-four percent of the wages of the deceased  worker but not less than two hundred fifty-three dollars;

          (iv) If there are three children of the deceased worker and in the legal custody of such spouse, sixty-six percent of the wages of the deceased  worker but not less than two hundred seventy-six dollars;

          (v) If there are four children of the deceased worker and in the legal custody of such spouse, sixty-eight percent of the wages of the deceased worker but not less than two hundred ninety-nine dollars; or

          (vi) If there are five or more children of the deceased  worker and in the legal custody of such spouse, seventy percent of the wages of the deceased worker but not less than three hundred twenty-two dollars.

          (b) Where the surviving spouse does not have legal custody of any child or children of the deceased  worker or where after the death of the  worker legal custody of such child or children passes from such surviving spouse to another, any payment on account of such child or children not in the legal custody of the surviving spouse shall be made to the person or persons having legal custody of such child or children.  The amount of such payments shall be five percent of the monthly benefits payable as a result of the worker's death for each such child but such payments shall not exceed twenty-five percent.  Such payments on account of such child or children shall be subtracted from the amount to which such surviving spouse would have been entitled had such surviving spouse had legal custody of all of the children and the surviving spouse shall receive the remainder after such payments on account of such child or children have been subtracted.  Such payments on account of a child or children not in the legal custody of such surviving spouse shall be apportioned equally among such children.

          (c) Payments to the surviving spouse of the deceased  worker shall cease at the end of the month in which remarriage occurs:  PROVIDED, That the  monthly payment made to the child or children of the deceased  worker shall  from the month following such remarriage be a sum equal to five percent of the wages of the deceased  worker for one child and a sum equal to five percent for each additional child up to a maximum of five such children.  Payments to such child or children shall be apportioned equally among such children.  Such sum shall be in place of any payments theretofore made for the benefit of or on account of any such child or children.

          (d) In no event shall the monthly payments provided in subsection (2) of this  section exceed seventy-five percent of the average monthly wage in the state as computed under RCW 51.08.018.

          (e) In addition to the monthly payments provided for in (2)(a) through (2)(c) of this section, a surviving spouse or child or children of such  worker if there is no surviving spouse, or dependent parent or parents, if there is no surviving spouse or child or children of any such deceased  worker shall be forthwith paid the sum of one thousand six hundred dollars, any such children, or parents to share and share alike in said sum.

          (f) Upon remarriage of a surviving spouse the monthly payments for the child or children shall continue as provided in this section, but the monthly payments to such surviving spouse shall cease at the end of the month during which remarriage occurs.  However, after September 8, 1975, an otherwise eligible surviving spouse of a  worker who died at any time prior to or after September 8, 1975, shall have an option of:

          (i) Receiving, once and for all, a lump sum of seventy-five hundred dollars or fifty percent of the then remaining annuity value of his or her pension, whichever is the lesser:  PROVIDED, That if the injury occurred prior to July 1, 1971, the remarriage benefit lump sum available shall be as provided in the remarriage benefit schedules then in effect; or

          (ii) If a surviving spouse does not choose the option specified in (2)(f)(i) of this section to accept the lump sum payment, the remarriage of the surviving spouse of a  worker shall not bar him or her from claiming the lump sum payment authorized in (2)(f)(i) of this section during the life of the remarriage, or shall not prevent subsequent monthly payments to him or to her if the remarriage has been terminated by death or has been dissolved or annulled by valid court decree provided he or she has not previously accepted the lump sum payment.

(g) If the surviving spouse during the remarriage should die without having previously received the lump sum payment provided in (2)(f)(i) of this section, his or her estate shall be entitled to receive the sum of seventy-five hundred dollars or fifty percent of the then remaining annuity value of his or her pension whichever is  the lesser.

          (h) The effective date of resumption of payments under (2)(f)(ii) of this section to a surviving spouse based upon termination of a remarriage by death, annulment, or dissolution shall be the date of the death or the date the judicial decree of annulment or dissolution becomes final and when application for the payments has been received.

          (i) If it should be necessary to increase the reserves in the reserve fund or to create a new pension reserve fund as a result of the amendments in *chapter 45, Laws of 1975-'76 2nd ex. sess., the amount of such increase in pension reserve in any such case shall be transferred to the reserve fund from the supplemental pension fund.

          (3) If there is a child or children and no surviving spouse of the deceased  worker or the surviving spouse is not eligible for benefits under this title, a sum equal to thirty-five percent of the  wages of the deceased  worker shall be paid monthly for one child and a sum equivalent to fifteen percent of such wage shall be paid monthly for each additional child, the total of such sum to be divided among such children, share and share alike:  PROVIDED, That benefits under this subsection or subsection (4) shall not exceed sixty-five percent of the  wages of the deceased  worker at the time of his or her death or ((seventy-five)) one hundred percent of the average monthly wage in the state as defined in RCW 51.08.018, whichever is the lesser of the two sums.

          (4) In the event a surviving spouse receiving monthly payments dies, the child or children of the deceased  worker shall receive the same payment as provided in subsection (3) of this section.

          (5) If the  worker leaves no surviving spouse or child, but leaves a dependent or dependents, a monthly payment shall be made to each dependent equal to fifty percent of the average monthly support actually received by such dependent from the  worker during the twelve months next preceding the occurrence of the injury, but the total payment to all dependents in any case shall not exceed sixty-five percent of the  wages of the deceased  worker at the time of the death or seventy-five percent of the average monthly wage in the state as defined in RCW 51.08.018, whichever is the lesser of the two sums.  If any dependent is under the age of eighteen years at the time of the occurrence of the injury, the payment to such dependent shall cease when such dependent reaches the age of eighteen years except such payments shall continue until the dependent reaches age  twenty-three while permanently enrolled at a full time course in an accredited school.  The payment to any dependent shall cease if and when, under the same circumstances, the necessity creating the dependency would have ceased if the injury had not happened.

          (6) If the injured  worker dies during the period of permanent total disability, whatever the cause of death, leaving a surviving spouse, or child, or children, the surviving spouse or child or children shall receive benefits as if death resulted from the injury as provided in subsections (2) through  (4) of this section.  Upon remarriage or death of such surviving spouse the payments  to such child or children shall be made as provided in subsection (2) of this section when the surviving spouse of a deceased  worker remarries.

 

        Sec. 4.  Section 51.32.060, chapter 23, Laws of 1961 as last amended by section 159, chapter 3, Laws of 1983 and RCW 51.32.060 are each amended to read as follows:

          When the supervisor of industrial insurance shall determine that permanent total disability results from the injury, the worker shall receive monthly during the period of such disability:

          (1) If married at the time of injury, sixty-five percent of his or her wages but not less than two hundred fifteen dollars per month.

          (2) If married with one child at the time of injury, sixty-seven percent of his or her wages but not less than two hundred fifty-two dollars per month.

          (3) If married with two children at the time of injury, sixty-nine percent of his or her wages but not less than two hundred eighty-three dollars.

          (4) If married with three children at the time of injury, seventy-one percent of his or her wages but not less than three hundred six dollars per month.

          (5) If married with four children at the time of injury, seventy-three percent of his or her wages but not less than three hundred twenty-nine dollars per month.

          (6) If married with five or more children at the time of injury, seventy-five percent of his or her wages but not less than three hundred fifty-two dollars per month.

          (7) If unmarried at the time of the injury, sixty percent of his or her wages but not less than one hundred eighty-five dollars per month.

          (8) If unmarried with one child at the time of injury, sixty-two percent of his or her wages but not less than two hundred twenty-two dollars per month.

          (9) If unmarried with two children at the time of injury, sixty-four percent of his or her wages but not less than two hundred fifty-three dollars per month.

          (10) If unmarried with three children at the time of injury, sixty-six percent of his or her wages but not less than two hundred seventy-six dollars per month.

          (11) If unmarried with four children at the time of injury, sixty-eight percent of his or her wages but not less than two hundred ninety-nine dollars per month.

          (12) If unmarried with five or more children at the time of injury, seventy percent of his or her wages but not less than three hundred twenty-two dollars per month.

          (13) For any period of time where both husband and wife are entitled to compensation as temporarily or totally disabled workers, only that spouse having the higher wages of the two shall be entitled to claim their child or children for compensation purposes.

          (14) In case of permanent total disability, if the character of the injury is such as to render the worker so physically helpless as to require the hiring of the services of an attendant, the department shall make monthly payments to such attendant for such services as long as such requirement continues, but such payments shall not obtain or be operative while the worker is receiving care under or pursuant to the provisions of chapter 51.36 RCW and RCW 51.04.105.

          (15) Should any further accident result in the permanent total disability of an injured worker, he or she shall receive the pension to which he or she would be entitled, notwithstanding the payment of a lump sum for his or her prior injury.

          (16) In no event shall the monthly payments provided in this section exceed ((seventy-five)) one hundred percent of the average monthly wage in the state as computed under the provisions of RCW 51.08.018, except that this limitation shall not apply to the payments provided for in subsection (14) of this section.

 

        Sec. 5.  Section 51.32.080, chapter 23, Laws of 1961 as last amended by section 2, chapter 20, Laws of 1982 1st ex. sess. and RCW 51.32.080 are each amended to read as follows:

          (1) For the permanent partial disabilities here specifically described, the injured worker shall receive compensation as follows:

                                                                                  

LOSS BY AMPUTATION

 

@i2!tp1Of leg above the knee joint with short thigh stump (3" or less below the tuberosity of ischium)!w× !tr!sc ,10

!ae0!tr$36,000.00

@i2Of leg at or above knee joint with functional stump!w× !tr!sc ,10

!ae0!tr32,400.00

@i2Of leg below knee joint!w× !tr!sc ,10

!ae0!tr28,800.00

@i2Of leg at ankle (Syme)!w× !tr!sc ,10

!ae0!tr25,200.00

@i2Of foot at mid-metatarsals!w× !tr!sc ,10

!ae0!tr12,600.00

@i2Of great toe with resection of metatarsal bone!w× !tr!sc ,10

!ae0!tr7,560.00

@i2Of great toe at metatarsophalangeal joint!w× !tr!sc ,10

!ae0!tr4,536.00

@i2Of great toe at interphalangeal joint!w× !tr!sc ,10

!ae0!tr2,400.00

@i2Of lesser toe (2nd to 5th) with resection of metatarsal bone!w× !tr!sc ,10

!ae0!tr2,760.00

@i2Of lesser toe at metatarsophalangeal joint!w× !tr!sc ,10

!ae0!tr1,344.00

@i2Of lesser toe at proximal interphalangeal joint!w× !tr!sc ,10

!ae0!tr996.00

@i2Of lesser toe at distal interphalangeal joint!w× !tr!sc ,10

!ae0!tr252.00

@i2Of arm at or above the deltoid insertion or by disarticulation at the shoulder!w× !tr!sc ,10

!ae0!tr36,000.00

@i2Of arm at any point from below the deltoid insertion to below the elbow joint at the insertion of the biceps tendon!w× !tr!sc ,10

!ae0!tr34,200.00

@i2Of arm at any point from below the elbow joint distal to the insertion of the biceps tendon to and including mid-metacarpal amputation of the hand!w× !tr!sc ,10

!ae0!tr32,400.00

@i2Of all fingers except the thumb at metacarpophalangeal joints!w× !tr!sc ,10

!ae0!tr19,440.00

@i2Of thumb at metacarpophalangeal joint or with resection of carpometacarpal bone!w× !tr!sc ,10

!ae0!tr12,960.00

@i2Of thumb at interphalangeal joint!w× !tr!sc ,10

!ae0!tr6,480.00

@i2Of index finger at metacarpophalangeal joint or with resection of metacarpal bone!w× !tr!sc ,10

!ae0!tr8,100.00

@i2Of index finger at proximal interphalangeal joint!w× !tr!sc ,10

!ae0!tr6,480.00

@i2Of index finger at distal interphalangeal joint!w× !tr!sc ,10

!ae0!tr3,564.00

@i2Of middle finger at metacarpophalangeal joint or with resection of metacarpal bone!w× !tr!sc ,10

!ae0!tr6,480.00

@i2Of middle finger at proximal interphalangeal joint!w× !tr!sc ,10

!ae0!tr5,184.00

@i2Of middle finger at distal interphalangeal joint!w× !tr!sc ,10

!ae0!tr2,916.00

@i2Of ring finger at metacarpophalangeal joint or with resection of metacarpal bone!w× !tr!sc ,10

!ae0!tr3,240.00

@i2Of ring finger at proximal interphalangeal joint!w× !tr!sc ,10

!ae0!tr2,592.00

@i2Of ring finger at distal interphalangeal joint!w× !tr!sc ,10

!ae0!tr1,620.00

@i2Of little finger at metacarpophalangeal joint or with resection of metacarpal bone!w× !tr!sc ,10

!ae0!tr1,620.00

@i2Of little finger at proximal interphalangeal joint!w× !tr!sc ,10

!ae0!tr1,296.00

@i2Of little finger at distal interphalangeal joint!w× !tr!sc ,10

!ae0!tr648.00

                                                                                  

MISCELLANEOUS

 

@i2Loss of one eye by enucleation!w× !tr!sc ,10

!ae0!tr14,400.00

@i2Loss of central visual acuity in one eye!w× !tr!sc ,10

!ae0!tr12,000.00

@i2Complete loss of hearing in both ears!w× !tr!sc ,10

!ae0!tr28,800.00

@i2Complete loss of hearing in one ear!w× !tr!sc ,10

!ae0!tr4,800.00!te

 

          (2) Compensation for amputation of a member or part thereof at a site other than those above specified, and for loss of central visual acuity and loss of hearing other than complete, shall be in proportion to that which such other amputation or partial loss of visual acuity or hearing most closely resembles and approximates.  Compensation for any other permanent partial disability not involving amputation shall be in the proportion which the extent of such other disability, called unspecified disability, shall bear to that above specified, which most closely resembles and approximates in degree of disability such other disability, compensation for any other unspecified permanent partial disability shall be in an amount as measured and compared to total bodily impairment:  PROVIDED, That in order to reduce litigation and establish more certainty and uniformity in the rating of unspecified permanent partial disabilities, the department shall enact rules having the force of law classifying such disabilities in the proportion which the department shall determine such disabilities reasonably bear to total bodily impairment.  In enacting such rules, the department shall give consideration to, but need not necessarily adopt, any nationally recognized medical standards or guides for determining various bodily impairments.  For purposes of calculating monetary benefits, the amount payable for total bodily impairment shall be deemed to be sixty thousand dollars:  PROVIDED, That ((compensation for unspecified permanent partial disabilities involving injuries to the back that do not have marked objective clinical findings to substantiate the disability shall be determined at an amount equal to seventy-five percent of the monetary value of such disability as related to total bodily impairment:  PROVIDED FURTHER, That)) the total compensation for all unspecified permanent partial disabilities resulting from the same injury shall not exceed the sum of sixty thousand dollars((, except that the total compensation for all unspecified permanent partial disabilities involving injuries to the back that do not have marked objective clinical findings to substantiate the disability and resulting from the same injury shall not exceed the sum of forty-five thousand dollars)):  PROVIDED FURTHER, That in case permanent partial disability compensation is followed by permanent total disability compensation, any portion of the permanent partial disability compensation which exceeds the amount that would have been paid the injured worker if permanent total disability compensation had been paid in the first instance, shall be deducted from the pension reserve of such injured worker and his or her monthly compensation payments shall be reduced accordingly.

          (3) Should a worker receive an injury to a member or part of his or her body already, from whatever cause, permanently partially disabled, resulting in the amputation thereof or in an aggravation or increase in such permanent partial disability but not resulting in the permanent total disability of such worker, his or her compensation for such partial disability shall be adjudged with regard to the previous disability of the injured member or part and the degree or extent of the aggravation or increase of disability thereof.

          (4) When the compensation provided for in subsections (1) and (2) exceeds three times the average monthly wage in the state as computed under the provisions of RCW 51.08.018, payment shall be made in monthly payments in accordance with the schedule of temporary total disability payments set forth in RCW 51.32.090 until such compensation is paid to the injured worker in full, except that the first monthly payment shall be in an amount equal to three times the average monthly wage in the state as computed under the provisions of RCW 51.08.018, and interest shall be paid at the rate of eight percent on the unpaid balance of such compensation commencing with the second monthly payment:  PROVIDED, That upon application of the injured worker or survivor the monthly payment may be converted, in whole or in part, into a lump sum payment, in which event the monthly payment shall cease in whole or in part.  Such conversion may be made only upon written application of the injured worker or survivor to the department and shall rest in the discretion of the department depending upon the merits of each individual application:  PROVIDED FURTHER, That upon death of a worker all unpaid installments accrued shall be paid according to the payment schedule established prior to the death of the worker to the widow or widower, or if there is no widow or widower surviving, to the dependent children of such claimant, and if there are no such dependent children, then to such other dependents as defined by this title.

 

        Sec. 6.  Section 3, chapter 286, Laws of 1975 1st ex. sess. as last amended by section 19, chapter 63, Laws of 1982 and RCW 51.32.220 are each amended to read as follows:

          (1)(a) For persons under the age of sixty-five receiving compensation for temporary or permanent total disability pursuant to the provisions of chapter 51.32 RCW, such compensation shall be reduced by an amount equal to the benefits payable under the federal old-age, survivors and disability insurance act as now or hereafter amended not to exceed the amount of the reduction established pursuant to 42 USC 424a.  However, such reduction shall not apply when the combined compensation provided pursuant to chapter 51.32 RCW and the federal old-age, survivors and disability insurance act is less than the total benefits to which the federal reduction would apply, pursuant to 42 USC 424a.  Where any person described in this section refuses to authorize the release of information concerning the amount of benefits payable under said federal act the department's estimate of said amount shall be deemed to be correct unless and until the actual amount is established and no adjustment shall be made for any period of time covered by any such refusal.

          (((2))) (b) Any reduction under subsection (1)(a) of this section shall be effective the month following the month in which the department or self-insurer is notified by the federal social security administration that the person is receiving disability benefits under the federal old-age, survivors and disability insurance act:  PROVIDED, That in the event of an overpayment of benefits the department or self-insurer may not recover more than the overpayments for the six months immediately preceding the date the department or self-insurer notifies the worker that an overpayment has occurred:  PROVIDED FURTHER, That upon determining that there has been an overpayment, the department or self-insurer shall immediately notify the person who received the overpayment that he or she shall be required to make repayment pursuant to this section and RCW 51.32.230.

          (((3))) (c) Recovery of any overpayment must be taken from future temporary or permanent total disability benefits or permanent partial disability benefits provided by this title.  In the case of temporary or permanent total disability benefits, the recovery shall not exceed twenty-five percent of the monthly amount due from the department or self-insurer or one-sixth of the total overpayment, whichever is the lesser.

          (((4))) (d) No reduction may be made unless the worker receives notice of the reduction prior to the month in which the reduction is made.

          (((5))) (e) In no event shall the reduction reduce total benefits to less than the greater amount the worker may be entitled to under this title or the federal old-age, survivors and disability insurance act.

          (((6))) (f) The director, pursuant to rules adopted in accordance with the procedures provided in the administrative procedure act, chapter 34.04 RCW, may exercise his discretion to waive, in whole or in part, the amount of any overpayment where the recovery would be against equity and good conscience.

          (((7))) (g) The amendment in subsection (1)(a) of this section by this 1982 act raising the age limit during which the reduction shall be made from age sixty-two to age sixty-five shall apply with respect to workers whose effective entitlement to total disability compensation begins after January 1, 1983.

          (2) For persons receiving compensation for temporary or permanent total disability or medical benefits under this title, the compensation shall be reduced by an amount equal to benefits payable under any employer-funded disability or medical fund, with the following limitations:

          (a) If the employee has contributed to the employer disability or medical fund, the benefits shall be reduced under this section only in an amount proportional to the employer's total contributions to the fund.

          (b) If the employer disability or medical fund provides by its terms that benefits are precluded in whole or in part if benefits are awarded under this title, the reduction required by this section is not applicable to the extent of the amount so precluded.

 

          NEW SECTION.  Sec. 7.  A new section is added to chapter 51.32 RCW to read as follows:

          The department shall authorize payments for preventive care to any worker, not to exceed one thousand dollars in medical aid and four weeks of temporary total disability benefits, if the director determines that:

          (1) The cost of such care is relatively insubstantial when weighed against the amount of compensation that may otherwise become payable under this title; or

          (2) There is a significant likelihood that preventive care will reduce the potential amount of compensation that may otherwise become payable under this title.

          For the purpose of this section, "preventive care" means any care which prevents an occupational disease and which becomes necessary due to a worker's employment.  "Preventive care" does not include vocational rehabilitation or regular safety precautions.

 

        Sec. 8.  Section 26, chapter 289, Laws of 1971 ex. sess. and RCW 51.14.010 are each amended to read as follows:

          Every employer under this title shall secure the payment of compensation under this title by:

          (1) Insuring and keeping insured the payment of such benefits with the state fund; or

          (2) Qualifying as a self-insurer under this title:  PROVIDED, That compensation paid by a self-insurer under this title shall be of a value at least equal to that paid or furnished out of the state fund in similar cases.

 

        Sec. 9.  Section 27, chapter 289, Laws of 1971 ex. sess. as last amended by section 9, chapter 323, Laws of 1977 ex. sess. and RCW 51.14.020 are each amended to read as follows:

          (1) An employer may qualify as a self-insurer by establishing to the director's satisfaction that he or she has sufficient financial ability to make certain the prompt payment of all compensation under this title and all assessments which may become due from such employer.  Each application for certification as a self-insurer submitted by an employer shall be accompanied by payment of a fee of one hundred fifty dollars or such larger sum as the director shall find necessary for the administrative costs of evaluation of the applicant's qualifications.  Any employer who has formerly been certified as a self-insurer and thereafter ceases to be so certified may not apply for certification within three years of ceasing to have been so certified.

          (2) A self-insurer ((may)) shall be required by the director to supplement existing financial ability by depositing in an escrow account in a depository designated by the director, money and/or corporate or governmental securities approved by the director, or a surety bond written by any company admitted to transact surety business in this state filed with the department.  The money, securities, or bond shall be in an amount reasonably sufficient in the director's discretion to insure payment of reasonably foreseeable compensation and assessments but not less than the employer's normal expected annual claim liabilities and in no event less than one hundred thousand dollars.  ((In arriving at)) The director shall base the amount of money, securities, or bond required under this subsection((, the director shall take into consideration the financial ability of the employer to pay compensation and assessments and his or her probable continuity of operation)) on the self-insurer's prospective liabilities under this title as determined under accepted actuarial standards.  In determining the amount of money, securities, or bond required, the director shall take into consideration any aggregate reinsurance purchased by the self-insurer under subsection (5) of this section.  The money, securities, or bond so deposited shall be held by the director to secure the payment of compensation by the self-insurer and to secure payment of his or her assessments.  The amount of security shall be reviewed annually and may be increased or decreased ((from time to time)) by the director as necessary to comply with this section.  The income from any securities deposited may be distributed currently to the self-insurer.

          (3) Securities or money deposited by an employer pursuant to subsection (2) of this section shall be returned to him or her upon his or her written request provided the employer files the bond required by such subsection.

          (4) If the employer seeking to qualify as a self-insurer has previously insured with the state fund, the director shall require the employer to make up his or her proper share of any deficit or insufficiency in the state fund as a condition to certification as a self-insurer.

          (5) A self-insurer may reinsure a portion of his or her liability under this title with any reinsurer authorized to transact such reinsurance in this state:  PROVIDED, That the reinsurer may not participate in the administration of the responsibilities of the self-insurer under this title.  ((Such reinsurance may not exceed eighty percent of the liabilities under this title.))

 

        Sec. 10.  Section 36, chapter 289, Laws of 1971 ex. sess. and RCW 51.14.070 are each amended to read as follows:

          (1) Whenever compensation due under this title is not paid because of an uncorrected default of a self-insurer, such compensation shall be paid from the medical aid and accidents funds only after the moneys available from the bonds or other security provided under RCW 51.14.020 have been exhausted and the self-insurers' guaranty fund established under RCW 51.44.150 has been exhausted.

          (2) Such defaulting self-insurer or surety, if any, shall be liable for payment into the appropriate fund of the amounts paid therefrom by the director, and for the purpose of enforcing this liability the director, for the benefit of the appropriate fund, shall be subrogated to all of the rights of the person receiving such compensation.

 

        Sec. 11.  Section 7, chapter 191, Laws of 1982 as amended by section 2, chapter 174, Laws of 1983 and RCW 51.14.150 are each amended to read as follows:

          (1) Any two or more employers ((which are school districts or educational service districts, (2) any two or more employers which are hospitals, as defined in RCW 70.39.020(3), and are owned or operated by a state agency or municipal corporation of this state, or (3) any two or more employers which are hospitals, as defined in RCW 70.39.020(3), no one of which is owned or operated by a state agency or municipal corporation of this state or subject to RCW 70.39.150(3),)) who are in a common industry or who are members of a bona fide trade or professional association may enter into agreements to form self-insurance groups for the purposes of this chapter:  PROVIDED, That no more than one group may be formed ((under subsection (2) of this section)), the employers in which are hospitals, as defined in RCW 70.39.020(3), that are owned or operated by a state agency or municipal corporation of this state, and no more than one group may be formed ((under subsection (3) of this section)), the employers in which are hospitals, as defined in RCW 70.39.020(3), no one of which is owned or operated by a state agency or municipal corporation of this state or subject to RCW 70.39.150(3).

          (2) The self-insurance groups shall be organized and operated under rules promulgated by the director under RCW 51.14.160.  A self-insurance group shall be required to self-administer its industrial insurance claims. Such a self-insurance group shall be deemed an employer for the purposes of this chapter, and may qualify as a self-insurer if it meets all the other requirements of this chapter.

          (3) For the purposes of this section:

          (a) "Common industry" means employers engaging in the same or substantially similar trades, businesses, occupations, professions, or functions within the state;

          (b) "Bona fide trade association" means a corporation or unincorporated association engaged in substantial activity for the benefit of its members, which was formed for a purpose other than that of obtaining industrial insurance coverage and has been in existence at least five years, and which is comprised of employers who are engaged in trades, businesses, occupations, professions, or functions within this state whether or not such trades or businesses are the same.

 

        Sec. 12.  Section 8, chapter 191, Laws of 1982 as amended by section 3, chapter 174, Laws of 1983 and RCW 51.14.160 are each amended to read as follows:

          The director shall promulgate rules to carry out the purposes of RCW 51.14.150:

          (1) Governing the formation of self-insurance groups for the purposes of this chapter, including the standards for determining bona fide members of trade or professional associations and bona fide members of a common industry;

          (2) Governing the organization and operation of the groups to assure their compliance with the requirements of this chapter;

          (3) Requiring adequate monetary reserves, determined under accepted actuarial practices, to be maintained by each group to assure financial solvency of the group; and

          (4) Requiring each group to carry adequate reinsurance.

 

        Sec. 13.  Section 46, chapter 289, Laws of 1971 ex. sess. as last amended by section 1, chapter 326, Laws of 1981 and RCW 51.32.055 are each amended to read as follows:

          (1) One purpose of this title is to restore the injured worker as near as possible to the condition of self-support as an able-bodied worker.  Benefits for permanent disability shall be determined under the director's supervision only after the injured worker's condition becomes fixed.

          (2) All determinations of permanent disabilities shall be made by the department.  Either the worker, employer, or self-insurer may make a request or such inquiry may be initiated by the director on his or her own motion.  Such determinations shall be required in every instance where permanent disability is likely to be present.  All medical reports and other pertinent information in the possession of or under the control of the employer or self-insurer shall be forwarded to the director with such requests.

          (3) A request for determination of permanent disability shall be examined by the department and an order shall issue in accordance with RCW 51.52.050.

          (4) The department may require that the worker present himself or herself for a special medical examination by a physician, or physicians, selected by the department, and the department may require that the worker present himself or herself for a personal interview.  In such event the costs of such examination or interview, including payment of any reasonable travel expenses, shall be paid by the department or self-insurer as the case may be.

          (5) The director may establish a medical bureau within the department to perform medical examinations under this section.  Physicians hired or retained for this purpose shall be grounded in industrial medicine and in the assessment of industrial physical impairment.  Self-insurers shall bear a proportionate share of the cost of such medical bureau in a manner to be determined by the department.

          (6) Where dispute arises from the handling of any claims prior to the condition of the injured worker becoming fixed, the worker, employer, or self-insurer may request the department to resolve the dispute or the director may initiate an inquiry on his or her own motion.  In such cases the department shall proceed as provided in this section and an order shall issue in accordance with RCW 51.52.050.

          (7) ((In the case of)) Claims accepted by a self-insurer((s which involve only medical treatment and which do not involve payment of temporary disability compensation under RCW 51.32.090 and which)) may be closed by the self-insurer only if at the time medical treatment is concluded ((do)):  (a) The claim does not involve permanent disability((, such claims may be closed by the self-insurers subject to reporting of claims)); (b) the worker has returned to his or her preinjury employment with the self-insurer; and (c) the department has not intervened with regard to the claim under subsection (6) of this section.  All claims closed pursuant to this subsection shall be reported to the department in a manner prescribed by department rules promulgated pursuant to chapter 34.04 RCW.  Upon ((such)) closure the self-insurer((s)) shall enter a written order, communicated to the worker, which contains the following statement clearly set forth in bold-face type:  "This order constitutes notification that your claim is being closed with ((medical benefits only, as provided)) the following benefits as listed below:  (list of benefits).  If for any reason you disagree with this closure, you may protest in writing to the Department of Labor and Industries, Olympia, within 60 days of the date you received this order.  The department will then review your claim and enter a further determinative order."  ((In the event)) If the department receives such a protest ((it)) the self-insurer's order shall be withdrawn.  The department shall review the claim and enter a ((further)) determinative order as provided for in RCW 51.52.050.

          Any claim closed pursuant to this section which within two years of closure is discovered by the department to have been closed in violation of this title may be set aside by the department.  The department shall review the claim and enter a determinative order in accordance with RCW 51.52.050 within sixty days of discovery of the unlawful closure.

 

        Sec. 14.  Section 59, chapter 289, Laws of 1971 ex. sess. and RCW 51.44.150 are each amended to read as follows:

          The director shall impose and collect assessments each fiscal year upon all self-insurers in the amount of the estimated costs of administering their portion of this title during such fiscal year.  The director shall also impose and collect, as circumstances require, an assessment in pro rata shares from all self-insurers in an amount necessary to pay compensation due, which as a result of uncorrected defaults by self-insurers, has not been paid.  These assessments shall be placed in a separate self-insurers' guaranty fund.  The time and manner of imposing and collecting assessments due the department shall be set forth in regulations promulgated by the director in accordance with chapter 34.04 RCW.