Effective Date of Rule: Immediately.

     Purpose: Rule making is needed as part of the implementation of claim resolution structured settlement agreements, allowed by EHB 2123 (chapter 37, Laws of 2011). These agreements will be available for claims for injured workers age fifty-five and older effective January 1, 2012, fifty-three and older effective January 1, 2015, and fifty and older effective January 1, 2016. This rule making creates new rules to clarify requirements and the process for these agreements.

     Statutory Authority for Adoption: RCW 51.04.020, 51.04.030, 51.04.065, 51.04.069 (chapter 37, Laws of 2011, EHB 2123).

     Under RCW 34.05.350 the agency for good cause finds that immediate adoption, amendment, or repeal of a rule is necessary for the preservation of the public health, safety, or general welfare, and that observing the time requirements of notice and opportunity to comment upon adoption of a permanent rule would be contrary to the public interest.

     Reasons for this Finding: Rule making is needed as part of the implementation of EHB 2123 (chapter 37, Laws of 2011) allowing claim resolution structured settlement agreements for injured workers age fifty-five and older effective January 1, 2012, fifty-three and older effective January 1, 2015, and fifty and older effective January 1, 2016. This change is expected to significantly impact costs of workers' compensation claims.

     Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 9, Amended 0, Repealed 0.

     Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.

     Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 0, Repealed 0.

     Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 0, Repealed 0.

     Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0;      Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 9, Amended 0, Repealed 0.

     Date Adopted: January 3, 2012.

Judy Schurke

Director

OTS-4500.5

     (2) The department will perform an initial review and determine if negotiations should proceed. When deciding whether to enter into negotiations for a structured settlement, the department will consider the following nonexclusive factors:

     (a) Worker's age;

     (b) Nature and extent of injury(ies) or disease(s) related to the claim;

     (c) Nature and extent of disabilities related to the condition(s) accepted under the claim;

     (d) Other medical conditions unrelated to the claim;

     (e) Other open or closed worker compensation claims for the worker;

     (f) Other settlements for injuries or diseases;

     (g) Worker's life expectancy;

     (h) Worker's marital or domestic partnership status;

     (i) Number and age of dependents;

     (j) Worker's sources of present and future income and benefits;

     (k) Worker's employment history;

     (l) Worker's education history;

     (m) Worker's labor market;

     (n) The effect a structured settlement agreement might have on other benefits the worker is receiving or entitled to receive.

     (3) If the department decides to negotiate, it will contact the other required parties and obtain their consent to move forward in negotiations, and obtain their consent about how the negotiations will be conducted. Negotiations may be conducted in-person, by phone, or by letter.

     (4) If all of the parties voluntarily agree to a settlement, the department will put the agreement in writing. All parties must sign the agreement.

     (5) After all parties have signed the structured settlement agreement, the department will forward a copy of the signed agreement to the board of industrial insurance appeals (BIIA), and provide any necessary documentation for the BIIA approval process.

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     (2) How will an affected employer be notified of a structured settlement agreement negotiation? When the department decides to begin settlement discussions, the department will notify all affected employers by mail, and will request the employer's participation in the negotiations.

     (3) How long does an affected employer have to respond to the department's notice of a negotiation? An affected employer has fourteen calendar days from the date the notice is sent to respond to the department's request for participation.

     (4) What happens if an affected employer does not respond to the department's notice of a negotiation? If the employer does not respond to the request within fourteen calendar days, the department will consider that the employer has declined to participate and will proceed with scheduling negotiations without the employer.

     An affected employer who declines to participate as a party to a structured settlement agreement will be bound by the terms of the agreement including any impact the structured settlement may have on the employer's experience factor or on the employer's industrial insurance premiums.

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     (1) Work-related injuries or occupational exposures that have not yet occurred;

     (2) Applications for industrial injury or occupational disease benefits that have not yet been filed; and

     (3) Claims for future death benefits or survivor benefits when the injured worker is still alive.

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     (a) Notify the department in writing and give the director or the director's designee at least thirty days to either approve or deny the request; and

     (b) Provide the following information:

     (i) A copy of the complete claim file(s) of the injured worker;

     (ii) Any other information relevant to the proposed agreement; and

     (iii) All terms of the structured settlement agreement, including an explanation of the anticipated impact on the fund(s).

     (2) If settlement negotiations continue after the self-insured employer has notified the department of a structured settlement agreement that may impact any funds covered under Title 51 RCW, the self-insured employer will keep the department updated on all terms or information not previously provided.

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     (2) What is active negotiation? Parties will be considered in active negotiations when the requirements of RCW 51.04.063(1) have been met, one hundred eighty days have passed since the claim was received by the department or self-insurer, the order allowing the claim is final and:

     (a) All parties have agreed to attempt to resolve the claim(s) through a structured settlement agreement;

     (b) The parties are discussing potential resolutions; and

     (c) No resolution has been reached.

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