BILL REQ. #:  S-3606.1 



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SENATE BILL 6526
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State of Washington63rd Legislature2014 Regular Session

By Senator Braun

Read first time 02/03/14.   Referred to Committee on Commerce & Labor.



     AN ACT Relating to aligning workers' compensation disability awards with federal retirement standards, increasing permanent partial disability awards, and decreasing workers' compensation rates; amending RCW 51.32.060, 51.32.067, 51.32.080, 51.16.035, and 51.32.040; and creating a new section.

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

NEW SECTION.  Sec. 1   The legislature recognizes the importance of compensating an injured worker permanently and totally disabled from an industrial injury or occupational disease. However, a permanent and total disability award should not be a replacement for retirement income. The legislature finds that a permanent and total disability award is intended to provide compensation to an injured worker only during the individual's working years. This statutory change will generate substantial savings while continuing to protect totally disabled workers during their working years. The legislature intends to utilize the savings generated to provide additional monetary benefits to permanent partial disability award recipients and to lower workers' compensation rates for Washington employers.

Sec. 2   RCW 51.32.060 and 2007 c 284 s 2 are each amended to read as follows:
     (1) 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:
     (a) If married at the time of injury, sixty-five percent of his or her wages.
     (b) If married with one child at the time of injury, sixty-seven percent of his or her wages.
     (c) If married with two children at the time of injury, sixty-nine percent of his or her wages.
     (d) If married with three children at the time of injury, seventy-one percent of his or her wages.
     (e) If married with four children at the time of injury, seventy-three percent of his or her wages.
     (f) If married with five or more children at the time of injury, seventy-five percent of his or her wages.
     (g) If unmarried at the time of the injury, sixty percent of his or her wages.
     (h) If unmarried with one child at the time of injury, sixty-two percent of his or her wages.
     (i) If unmarried with two children at the time of injury, sixty-four percent of his or her wages.
     (j) If unmarried with three children at the time of injury, sixty-six percent of his or her wages.
     (k) If unmarried with four children at the time of injury, sixty-eight percent of his or her wages.
     (l) If unmarried with five or more children at the time of injury, seventy percent of his or her wages.
     (2) 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.
     (3) 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.
     (4) 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.
     (5) In no event shall the monthly payments provided in this section:
     (a) Exceed the applicable percentage of the average monthly wage in the state as computed under the provisions of RCW 51.08.018 as follows:

 AFTERPERCENTAGE
 
 June 30, 1993105% 
 June 30, 1994110% 
 June 30, 1995115% 
 June 30, 1996120% 


     (b) For dates of injury or disease manifestation after July 1, 2008, be less than fifteen percent of the average monthly wage in the state as computed under RCW 51.08.018 plus an additional ten dollars per month if a worker is married and an additional ten dollars per month for each child of the worker up to a maximum of five children. However, if the monthly payment computed under this subsection (5)(b) is greater than one hundred percent of the wages of the worker as determined under RCW 51.08.178, the monthly payment due to the worker shall be equal to the greater of the monthly wages of the worker or the minimum benefit set forth in this section on June 30, 2008.
     The limitations under this subsection shall not apply to the payments provided for in subsection (3) of this section.
     (6) In the case of new or reopened claims, if the supervisor of industrial insurance determines that, at the time of filing or reopening, the worker is voluntarily retired and is no longer attached to the workforce, benefits shall not be paid under this section.
     (7) The benefits provided by this section are subject to modification under RCW 51.32.067.
     (8)(a) Benefits under this section end when the worker reaches full federal retirement age as defined by 42 U.S.C. Sec. 416(1).
     (b) This subsection applies to all determinations of permanent total disability made by the department on or after July 1, 2014.
     (9) Beginning on June 30, 2015, and no later than each June 30th thereafter, the department shall determine the fiscal cost savings achieved by subsection (8) of this section for the prior calendar year. The savings achieved in the prior year must be used in the subsequent year as follows:
     (a) Fifty percent of the cost savings achieved by subsection (8) of this section in the prior year must be used to decrease the basic accident fund premium rates equally across all risk classifications for the following year; and
     (b) Fifty percent of the cost savings achieved by subsection (8) of this section in the prior year must be used to increase the amount of permanent partial disability awards. The increased amount is considered a supplement to a permanent partial disability award and must be distributed proportionately based upon the percentage of the injured worker's disability rating. Permanent partial disability awards that may not be supplemented are those in which the injured worker has died or has reached full federal retirement age as of the date the supplement would be distributed or has received or is receiving permanent total disability compensation. Permanent partial disability awards paid by self-insured employers also may not be supplemented. Subject to the limitations of this subsection, permanent partial disability awards to be supplemented are awards that:
     (i) Will be paid in the following year; and
     (ii) Have been paid in previous years, regardless of whether the claim is closed, subject to reasonable efforts made by the department to locate injured workers who have received permanent partial disability awards in previous years. The award of the supplement does not constitute a reopening of a claim. "Reasonable efforts" means the department has attempted to contact the injured worker at the injured worker's last known address on file with the department.
     (10) The supplement under subsection (9) of this section does not constitute an entitlement and no private cause of action is created. An injured worker who disagrees with the department's decision regarding a distribution of a supplement to the injured worker may seek review of the department's decision by contacting the department in the manner provided by rule.
     (11) The department shall develop rules as necessary to implement subsections (8) through (10) of this section.

Sec. 3   RCW 51.32.067 and 2006 c 154 s 1 are each amended to read as follows:
     (1) After a worker elects one of the options in (a), (b), or (c) of this subsection, that option shall apply only if the worker dies during a period of permanent total disability from a cause unrelated to the injury, leaving a surviving spouse, child, children, or other dependent. If, after making an election under this subsection, a worker dies from a cause related to the injury during a period of permanent total disability, his or her beneficiaries shall receive benefits under RCW 51.32.050 (2) through (5).
     (a) Option I. An injured worker selecting this option shall receive the benefits provided by RCW 51.32.060, with no benefits being paid to the worker's surviving spouse, children, or others.
     (b) Option II. An injured worker selecting this option shall receive an actuarially reduced benefit which upon death shall be ((continued throughout the life of and)) paid to the surviving spouse, child, or other dependent as the worker has nominated by written designation duly executed and filed with the department. The benefit is payable to the designated beneficiary through the designated beneficiary's life or through the period the injured worker would have been entitled to permanent total disability benefits, whichever ends first.
     (c) Option III. An injured worker selecting this option shall receive an actuarially reduced benefit and, upon death, one-half of the reduced benefit shall be ((continued throughout the life of and)) paid to the surviving spouse, child, or other dependent as the worker has nominated by written designation duly executed and filed with the department. The benefit is payable to the designated beneficiary through the designated beneficiary's life or through the period the injured worker would have been entitled to permanent total disability benefits, whichever ends first.
     (2) The worker shall make the election in writing and the worker's spouse, if any, shall consent in writing as a prerequisite to the election of Option I.
     (3) If the worker's nominated beneficiary is the worker's spouse, and the worker and spouse enter into a dissolution of marriage after the nomination has been made, the worker may apply to receive benefits as calculated under Option I if the period of the worker's entitlement to permanent total disability benefits has not ended. This change is effective the date of the decree of dissolution of marriage, but no more than one year prior to the date application for the change is received in the department, provided the worker submits legally certified documentation of the decree of dissolution of marriage.
     (4) If the worker's nominated beneficiary dies, the worker may apply to receive benefits as calculated under Option I if the period of the worker's entitlement to permanent total disability benefits has not ended. This change is effective the date of death, but no more than one year prior to the date application for the change is received in the department, provided the worker submits a certified copy of the death certificate.
     (5) The change in benefits authorized by subsections (3) and (4) of this section is a one-time adjustment and will be permanent for the ((life of the worker)) period of the worker's entitlement to permanent total disability benefits.
     (6) The department shall adopt such rules as may be necessary to implement this section.

Sec. 4   RCW 51.32.080 and 2011 1st sp.s. c 37 s 401 are each amended to read as follows:
     (1)(a) Until July 1, 1993, for the permanent partial disabilities here specifically described, the injured worker shall receive compensation as follows:

LOSS BY AMPUTATION
Of leg above the knee joint with short
     thigh stump (3" or less below the
     tuberosity of ischium) . . . . . . . . . . . .

$54,000.00
Of leg at or above knee joint with
     functional stump . . . . . . . . . . . .
48,600.00
Of leg below knee joint . . . . . . . . . . . . 43,200.00
Of leg at ankle (Syme) . . . . . . . . . . . . 37,800.00
Of foot at mid-metatarsals . . . . . . . . . . . . 18,900.00
Of great toe with resection of metatarsal
     bone . . . . . . . . . . . .
11,340.00
Of great toe at metatarsophalangeal
     joint . . . . . . . . . . . .
6,804.00
Of great toe at interphalangeal joint . . . . . . . . . . . . 3,600.00
Of lesser toe (2nd to 5th) with resection of
     metatarsal bone . . . . . . . . . . . .
4,140.00
Of lesser toe at metatarsophalangeal
     joint . . . . . . . . . . . .
2,016.00
Of lesser toe at proximal interphalangeal
     joint . . . . . . . . . . . .
1,494.00
Of lesser toe at distal interphalangeal
     joint . . . . . . . . . . . .
378.00
Of arm at or above the deltoid insertion or
     by disarticulation at the shoulder . . . . . . . . . . . .
54,000.00
Of arm at any point from below the deltoid
     insertion to below the elbow joint at
     the insertion of the biceps tendon . . . . . . . . . . . .

51,300.00
Of 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 . . . . . . . . . . . .



48,600.00
Of all fingers except the thumb at
     metacarpophalangeal joints . . . . . . . . . . . .
29,160.00
Of thumb at metacarpophalangeal joint or
     with resection of carpometacarpal
     bone . . . . . . . . . . . .

19,440.00
Of thumb at interphalangeal joint . . . . . . . . . . . . 9,720.00
Of index finger at metacarpophalangeal
     joint or with resection of metacarpal
     bone . . . . . . . . . . . .

12,150.00
Of index finger at proximal
     interphalangeal joint . . . . . . . . . . . .
9,720.00
Of index finger at distal interphalangeal
     joint . . . . . . . . . . . .
5,346.00
Of middle finger at metacarpophalangeal
     joint or with resection of metacarpal
     bone . . . . . . . . . . . .

9,720.00
Of middle finger at proximal
     interphalangeal joint . . . . . . . . . . . .
7,776.00
Of middle finger at distal interphalangeal
     joint . . . . . . . . . . . .
4,374.00
Of ring finger at metacarpophalangeal
     joint or with resection of metacarpal
     bone . . . . . . . . . . . .

4,860.00
Of ring finger at proximal interphalangeal
     joint . . . . . . . . . . . .
3,888.00
Of ring finger at distal interphalangeal
     joint . . . . . . . . . . . .
2,430.00
Of little finger at metacarpophalangeal
     joint or with resection of metacarpal
     bone . . . . . . . . . . . .

2,430.00
Of little finger at proximal interphalangeal
     joint . . . . . . . . . . . .
1,944.00
Of little finger at distal interphalangeal
     joint . . . . . . . . . . . .
972.00
  

MISCELLANEOUS
Loss of one eye by enucleation . . . . . . . . . . . . 21,600.00
Loss of central visual acuity in one eye . . . . . . . . . . . . 18,000.00
Complete loss of hearing in both ears . . . . . . . . . . . . 43,200.00
Complete loss of hearing in one ear . . . . . . . . . . . . 7,200.00


     (b) Beginning on July 1, 1993, compensation under this subsection shall be computed as follows:
     (i) Beginning on July 1, 1993, the compensation amounts for the specified disabilities listed in (a) of this subsection shall be increased by thirty-two percent; ((and))
     (ii) Except as provided in (b)(iii) of this subsection, beginning on July 1, 1994, and each July 1 thereafter, the compensation amounts for the specified disabilities listed in (a) of this subsection, as adjusted under (b)(i) of this subsection, shall be readjusted to reflect the percentage change in the consumer price index, calculated as follows: The index for the calendar year preceding the year in which the July calculation is made, to be known as "calendar year A," is divided by the index for the calendar year preceding calendar year A, and the resulting ratio is multiplied by the compensation amount in effect on June 30 immediately preceding the July 1st on which the respective calculation is made. For the purposes of this subsection, "index" means the same as the definition in RCW 2.12.037(1); and
     (iii) Beginning July 1, 2017, the compensation amounts for the specified disabilities listed in (a) of this subsection must be readjusted as follows:
     (A) Annually, on July 1st of each year, the amounts must be readjusted to reflect the percentage change in the consumer price index, calculated under the formula provided in (b)(ii) of this subsection; and
     (B) The amounts must be readjusted on the basis of the formula provided in RCW 51.32.060(9) for state fund employers.
     (2) Compensation for amputation of a member or part thereof at a site other than those specified in subsection (1) of this section, 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 shall be calculated based on the adjusted schedule of compensation in effect for the respective time period as prescribed in subsection (1) of this section.
     (3)(a) 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 the disabilities specified in subsection (1) of this section, which most closely resembles and approximates in degree of disability such other disability, and compensation for any other unspecified permanent partial disability shall be in an amount as measured and compared to total bodily impairment. 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.
     (b) Until July 1, 1993, for purposes of calculating monetary benefits under (a) of this subsection, the amount payable for total bodily impairment shall be deemed to be ninety thousand dollars. Beginning on July 1, 1993, for purposes of calculating monetary benefits under (a) of this subsection, the amount payable for total bodily impairment shall be adjusted as follows:
     (i) Beginning on July 1, 1993, the amount payable for total bodily impairment under this section shall be increased to one hundred eighteen thousand eight hundred dollars; ((and))
     (ii) Except as provided in (b)(iii) of this subsection, beginning on July 1, 1994, and each July 1 thereafter, the amount payable for total bodily impairment prescribed in (b)(i) of this subsection shall be adjusted as provided in subsection (1)(b)(ii) of this section; and
     (iii) Beginning July 1, 2017, the compensation amounts calculated under (a) of this subsection must be readjusted as follows:
     (A) Annually, on July 1st of each year, the amounts must be readjusted to reflect the percentage change in the consumer price index, calculated under the formula provided in subsection (1)(b)(ii) of this section; and
     (B) The amounts must be readjusted on the basis of the formula provided in RCW 51.32.060(9) for state fund employers.
     (c) Until July 1, 1993, the total compensation for all unspecified permanent partial disabilities resulting from the same injury shall not exceed the sum of ninety thousand dollars. Beginning on July 1, 1993, total compensation for all unspecified permanent partial disabilities resulting from the same injury shall not exceed a sum calculated as follows:
     (i) Beginning on July 1, 1993, the sum shall be increased to one hundred eighteen thousand eight hundred dollars; ((and))
     (ii) Except as provided in (c)(iii) of this subsection, beginning on July 1, 1994, and each July 1 thereafter, the sum prescribed in (b)(i) of this subsection shall be adjusted as provided in subsection (1)(b)(ii) of this section; and
     (iii) Beginning July 1, 2017, the compensation amounts calculated under (a) of this subsection must be readjusted as follows:
     (A) Annually, on July 1st of each year, the amounts must be readjusted to reflect the percentage change in the consumer price index, calculated under the formula provided in (1)(b)(ii) of this section; and
     (B) The amounts must be readjusted on the basis of the formula provided in RCW 51.32.060(9) for state fund employers.
     (4) If permanent partial disability compensation is followed by permanent total disability compensation, all permanent partial disability compensation paid to the worker under the claim or claims for which total permanent disability compensation is awarded shall be, at the choosing of the injured worker, either: (a) Deducted from the worker's monthly pension benefits until the total award or awards paid are recovered; or (b) deducted from the pension reserve of such injured worker and his or her monthly compensation payments shall be reduced accordingly. Any interest paid on any permanent partial disability compensation may not be deducted from the pension benefits or pension reserve. The provisions of this subsection apply to all permanent total disability determinations issued on or after July 1, 2011.
     (5) 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.
     (6) When the compensation provided for in subsections (1) through (3) of this section 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. 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. Upon the 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.
     (7) Awards payable under this section are governed by the schedule in effect on the date of injury.

Sec. 5   RCW 51.16.035 and 2005 c 410 s 1 are each amended to read as follows:
     (1) The department shall classify all occupations or industries in accordance with their degree of hazard and fix therefor basic rates of premium which shall be:
     (a) The lowest necessary to maintain actuarial solvency of the accident and medical aid funds in accordance with recognized insurance principles; ((and))
     (b) Designed to attempt to limit fluctuations in premium rates; and
     (c) Adopted using the savings formula provided in RCW 51.32.060(9) for state fund employers.
     (2) The department shall formulate and adopt rules governing the method of premium calculation and collection and providing for a rating system consistent with recognized principles of workers' compensation insurance which shall be designed to stimulate and encourage accident prevention and to facilitate collection. The department may annually, or at such other times as it deems necessary to achieve the objectives under this section, readjust rates in accordance with the rating system to become effective on such dates as the department may designate.
     (3)(a) After the first report is issued by the state auditor under RCW 51.44.115, the workers' compensation advisory committee shall review the report and, as the committee deems appropriate, may make recommendations to the department concerning:
     (i) The level or levels of a contingency reserve that are appropriate to maintain actuarial solvency of the accident and medical aid funds, limit premium rate fluctuations, and account for economic conditions; and
     (ii) When surplus funds exist in the trust funds, the circumstances under which the department should give premium dividends, or similar measures, or temporarily reduce rates below the rates fixed under subsection (1) of this section, including any recommendations regarding notifications that should be given before taking the action.
     (b) Following subsequent reports issued by the state auditor under RCW 51.44.115, the workers' compensation advisory committee may, as it deems appropriate, update its recommendations to the department on the matters covered under (a) of this subsection.
     (4) In providing a retrospective rating plan under RCW 51.18.010, the department may consider each individual retrospective rating group as a single employing entity for purposes of dividends or premium discounts.

Sec. 6   RCW 51.32.040 and 2013 c 125 s 6 are each amended to read as follows:
     (1) Except as provided in RCW 43.20B.720, 72.09.111, 74.20A.260, and 51.32.380, no money paid or payable under this title shall, before the issuance and delivery of the payment, be assigned, charged, or taken in execution, attached, garnished, or pass or be paid to any other person by operation of law, any form of voluntary assignment, or power of attorney. Any such assignment or charge is void unless the transfer is to a financial institution at the request of a worker or other beneficiary and made in accordance with RCW 51.32.045.
     (2)(a) If any worker suffers (i) a permanent partial injury and dies from some other cause than the accident which produced the injury before he or she receives payment of the award for the permanent partial injury or (ii) any other injury before he or she receives payment of any monthly installment covering any period of time before his or her death, the amount of the permanent partial disability award or the monthly payment, or both, shall be paid to the surviving spouse or the child or children if there is no surviving spouse. If there is no surviving spouse and no child or children, the award or the amount of the monthly payment shall be paid by the department or self-insurer and distributed consistent with the terms of the decedent's will or, if the decedent dies intestate, consistent with the terms of RCW 11.04.015. The increase in a permanent partial disability award under RCW 51.32.060(9)(b) does not apply when a permanent partial disability award is being paid to the surviving spouse or, if there is no surviving spouse, to the child or children, under this section.
     (b) If any worker suffers an injury and dies from it before he or she receives payment of any monthly installment covering time loss for any period of time before his or her death, the amount of the monthly payment shall be paid to the surviving spouse or the child or children if there is no surviving spouse. If there is no surviving spouse and no child or children, the amount of the monthly payment shall be paid by the department or self-insurer and distributed consistent with the terms of the decedent's will or, if the decedent dies intestate, consistent with the terms of RCW 11.04.015.
     (c) Any application for compensation under this subsection (2) shall be filed with the department or self-insuring employer within one year of the date of death. The department or self-insurer may satisfy its responsibilities under this subsection (2) by sending any payment due in the name of the decedent and to the last known address of the decedent.
     (3)(a) Any worker or beneficiary receiving benefits under this title who is subsequently confined in, or who subsequently becomes eligible for benefits under this title while confined in, any institution under conviction and sentence shall have all payments of the compensation canceled during the period of confinement. After discharge from the institution, payment of benefits due afterward shall be paid if the worker or beneficiary would, except for the provisions of this subsection (3), otherwise be entitled to them.
     (b) If any prisoner is injured in the course of his or her employment while participating in a work or training release program authorized by chapter 72.65 RCW and is subject to the provisions of this title, he or she is entitled to payments under this title, subject to the requirements of chapter 72.65 RCW, unless his or her participation in the program has been canceled, or unless he or she is returned to a state correctional institution, as defined in RCW 72.65.010(3), as a result of revocation of parole or new sentence.
     (c) If the confined worker has any beneficiaries during the confinement period during which benefits are canceled under (a) or (b) of this subsection, they shall be paid directly the monthly benefits which would have been paid to the worker for himself or herself and the worker's beneficiaries had the worker not been confined.
     (4) Any lump sum benefits to which a worker would otherwise be entitled but for the provisions of this section shall be paid on a monthly basis to his or her beneficiaries.

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