BILL REQ. #: S-4271.1
| State of Washington | 63rd Legislature | 2014 Regular Session |
READ FIRST TIME 02/06/14.
AN ACT Relating to workers' compensation group self-insurance plans; and adding new sections to chapter 51.14 RCW.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW SECTION. Sec. 1 A new section is added to chapter 51.14 RCW
to read as follows:
(1) Any group of employers who are substantially similar,
considering the services or activities performed by the employees of
those employers, may adopt a plan for self-insurance, as a group, for
the payment of all compensation due under this title. Under a group
self-insurance plan, the group shall assume the liability of all the
member employers within the group and pay all benefits and all
assessments for which the member employers are liable under this title.
Each member employer of the group shall be responsible, jointly and
severally, for all liabilities of the group self-insurer under this
title incurred during its respective period of membership. A self-insurance group is 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.
(2) A member employer's participation in a group self-insurer
program does not relieve it of its liability for compensation
prescribed by this title except by the payment thereof by the group
self-insurer or by itself.
(3) Notice or knowledge of an industrial injury on the part of a
member is notice or knowledge on the part of the group self-insurer.
The group self-insurer is in all things bound by and subject to the
orders, findings, decisions, or awards rendered against the
participating member for the payment of compensation under this title.
(4) A group self-insurer must form a group insolvency trust or
other mechanism to be used as the exclusive mechanism to provide for
payment of benefits to injured workers of employers participating in
the group in case of insolvency of one or more members of the group.
(5) A group self-insurer may secure the services of a group
administrator to be responsible for assisting the group self-insurer in
complying with this title.
(6) For the purposes of this section, "substantially similar" means
private employers who are affiliated with the same industry, line of
work, or trade, or public employers who are of the same type of
government entity. A group may not include both private and public
employers.
NEW SECTION. Sec. 2 A new section is added to chapter 51.14 RCW
to read as follows:
(1) A group of employers seeking to qualify as a group self-insurer
must apply for certification as such to the director pursuant to RCW
51.14.020.
(2) Each member of the group self-insurer must also file a copy of
a properly executed participation indemnity agreement that must jointly
and severally bind the group and every member employer to meet the
workers' compensation obligations of each member. The indemnity
agreement must be in the form prescribed by the director and must
include minimum uniform substantive provisions as prescribed by the
director. Subject to the director's approval, a group may add other
provisions necessary because of that group's particular circumstances.
(3) The director may require copies of any and all agreements,
contracts, and other pertinent documents relating to the organization
of the members in the group self-insurer as a condition of
certification.
NEW SECTION. Sec. 3 A new section is added to chapter 51.14 RCW
to read as follows:
The director may issue a certification of group self-insurance if
the group meets all the requirements of this chapter and has submitted
all the reports, records, and other information required by the self-insured application process.
NEW SECTION. Sec. 4 A new section is added to chapter 51.14 RCW
to read as follows:
(1) The membership of an individual member of a group is subject to
cancellation by the group as provided by the bylaws of the group. An
individual member may also elect to terminate participation in the
group. Termination of a participating member is not effective until at
least ten days after notice of such termination has been filed with the
department and with the member subject to termination. The group shall
maintain coverage of each canceled or terminated member until the 30th
day after the date of the notice, at the terminating member's expense,
unless before that date the director notifies the group that the
canceled or terminated member has obtained workers' compensation
insurance coverage through the state fund, has become a certified self-insurer, or has become a member of another group.
(2) A member who elects to terminate membership or whose membership
is canceled by the group remains jointly and severally liable for the
workers' compensation obligations of the group and its members incurred
during the canceled or terminated member's period of membership.
(3) The insolvency, bankruptcy, or termination of a participating
member of a group self-insurer does not relieve the group self-insurer
from the payment of compensation for injuries or death sustained by an
employee during the time the member was a participant in the group
self-insurer.
(4) Any member terminating membership in a group self-insurer after
less than four years in such group self-insurer, and any member in a
group self-insurer that has defaulted, may not obtain prospective
coverage from any group self-insurer for a period of at least three
years from the effective date of termination.
NEW SECTION. Sec. 5 A new section is added to chapter 51.14 RCW
to read as follows:
The provisions of this chapter relating to self-insurers are
applicable to group self-insurers. The department shall adopt rules to
carry out the purposes of this section and sections 1 through 4 of this
act, including rules to:
(1) Govern the formation of self-insurance groups for the purposes
of this chapter;
(2) Govern the organization and operation of the groups to assure
their compliance with the requirements of this chapter;
(3) Require adequate monetary reserves, determined under accepted
actuarial practices, to be maintained by each group to assure financial
solvency of the group;
(4) Require establishment of an insolvency trust or similar
mechanism to be used as the exclusive mechanism to provide for payment
of benefits to injured workers of employers participating in the group
in case of insolvency of one or more members of the group; and
(5) Require each group to carry adequate reinsurance.