Brief Description: Requiring mandatory electronic data reporting under Title 51 RCW for workers' compensation self-insurers.

Sponsors: Representatives Hudgins, Conway, McCoy, Condotta, Wood and Chase; by request of Department of Labor & Industries.

Hearing Date: 1/24/05

Staff: Chris Cordes (786-7103).

Background:

Industrial insurance is a no-fault state workers' compensation program that provides medical and partial wage replacement benefits to covered workers who are injured on the job or who develop an occupational disease. Employers must insure with the state fund administered by the Department of Labor and Industries (Department) or, if qualified, may self-insure.

Qualifying for Self-Insurance

To be certified as a self-insurer, the employer must meet certain criteria, including:

• be in business for at least three years;
• have a net worth of at least $5 million;
• meet a specified surety requirement;
• have an approved, effective safety and accident prevention program; and
• have sufficient financial ability to ensure prompt payment of compensation to its injured workers.

Group self-insurance is also permitted for school districts and educational service districts, and for hospitals (one group for public hospitals, one group for other hospitals).

Benefits and Claims Administration under Self-Insurance

Self-insurers must provide their injured workers with the same benefits that are provided to injured workers in state fund claims, including medical and partial wage replacement benefits, permanent partial and total disability benefits, and death benefits. Self-insurers manage most aspects of their injured worker claims, including:

• paying time loss benefits directly to their injured workers;
• scheduling medical appointments required by the employer;
• referring injured workers to vocational rehabilitation counselors;
• closing certain undisputed claims; and
• determining and paying permanent partial disability benefits if the claimant has returned to work with the employer.

   
Self-insurers are required to report various claims actions and other information to the Department.

Confidentiality of Records

Generally, information obtained by the Department from employer records is confidential and not open to public inspection. Similarly, information in injured workers' claim files is also confidential and not open to public inspection, although various interested parties may have access to certain records for purposes related to administering the Industrial Insurance Act.

Self-Insurance Assessments

Self-insurers pay assessments to the Department to cover the Department's administrative costs of regulating self-insurance and for an insolvency trust fund that covers the costs of self-insured employers who become unable to meet their workers' compensation obligations.

Self-Insurance Penalties

Self-insurers are subject to decertification or corrective action for failing to meet financial requirements and for specified prohibited actions against employees. They are also subject to various penalties for failure to make required reports to the Department or for violations of certain statutes or Department rules.

Summary of Bill:

The Department of Labor and Industries must establish an electronic reporting system for self-insured employers to use when submitting specified industrial insurance claim data to the Department.

The claim data reported by self-insured employers using the electronic reporting system is confidential under applicable Industrial Insurance Act provisions. However, the Department may publish aggregated claims data that do not contain personal identifiers.

Beginning July 1, 2008:

• Self-insured employers will be required to submit data electronically as prescribed by the Department, and electronic submittal will be a requirement to maintain self-insurance status.
• A self-insurer that fails to comply with the electronic submittal requirement will be subject to penalties, including withdrawal of certification, under an escalating schedule of penalties developed by the Department.
• The statutory criteria to qualify for self-insurance will include a requirement to demonstrate the ability and commitment to submit claim data electronically.

Rules Authority: The bill requires the Department of Labor and Industries to adopt rules to administer the self-insurer electronic data program.

Appropriation: None.

Fiscal Note: Requested on January 20, 2005.

Effective Date: The bill takes effect 90 days after adjournment of session in which bill is passed, except for sections 2 and 3, requiring self-insurers to submit data electronically, which take effect July 1, 2008.