H-2273.2  _______________________________________________

                    SUBSTITUTE HOUSE BILL 2041

          _______________________________________________

State of Washington      55th Legislature     1997 Regular Session

By House Committee on Commerce & Labor (originally sponsored by Representatives Honeyford, Thompson, Sherstad, Mielke and Koster)

Read first time 03/05/97.

Limiting industrial insurance benefits for employees of illegally insured employers.

    AN ACT Relating to employers failure to pay industrial insurance premiums; adding a new section to chapter 51.32 RCW; adding a new section to chapter 51.04 RCW; creating a new section; and making an appropriation.

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

NEW SECTION. Sec. 1.  The legislature finds that there is a continuing problem of employers illegally failing to insure their workers for industrial insurance.  When an employee of an employer who has failed to insure his or her workers files a claim for benefits, the department of labor and industries is forced to pass on the cost of the benefits provided to legally insured employers in the same risk classification.  It is the intent of the legislature to place the financial burden of paying for the industrial insurance benefits provided to the injured employee on the illegally uninsured employer.

NEW SECTION. Sec. 2.  A new section is added to chapter 51.32 RCW to read as follows:

    (1) If a worker is employed by an employer who has not secured the payment of compensation as required by this title, the worker is entitled only to medical benefits under chapter 51.36 RCW.  However, compensation in addition to medical benefits shall be paid if the worker who is otherwise entitled provides payroll records, canceled checks, pay stubs, or other documentation acceptable to the supervisor of industrial insurance indicating that the worker had reason to believe that premiums were paid for insuring the worker under this title.

    (2) All costs related to the benefits paid on behalf of a worker whose employer did not secure coverage as required by this title are the obligation of the employer and may not be charged by the department to any other employer. If an employer fails to secure the payment of compensation for his or her workers covered under this title and benefits are paid as authorized under subsection (1) of this section, the department may demand payment from the employer of the actual or estimated cost, whichever is greater, of the benefits provided to the worker.  If the employer does not make payment within ten days from the mailing of such demand by the department, the department may have and recover judgment, warrant, or file liens as provided under this title for such estimated costs or the actual costs, whichever is greater.

NEW SECTION. Sec. 3.  A new section is added to chapter 51.04 RCW to read as follows:

    The director shall report biennially to the appropriate committees of the legislature concerning the amount of money paid out by the department, and not recovered under section 2(2) of this act, for benefits provided under this title to employees of employers who failed to secure the payment of compensation as required by this title.

NEW SECTION. Sec. 4.  The sum of six hundred thousand dollars, or so much thereof as may be necessary, is appropriated in equal amounts from the accident fund and the medical aid fund to the department of labor and industries for the biennium ending June 30, 1999, for the purposes of enhancing employer compliance enforcement activities in the industrial insurance program.

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