CERTIFICATION OF ENROLLMENT

SUBSTITUTE HOUSE BILL 2409

Chapter 277, Laws of 2020

66TH LEGISLATURE

2020 REGULAR SESSION

INDUSTRIAL INSURANCE--VARIOUS PROVISIONS

EFFECTIVE DATE: September 1, 2020—Except for section 8, which becomes effective July 1, 2021.

SUBSTITUTE HOUSE BILL 2409

AS AMENDED BY THE SENATE

ByHouse Labor & Workplace Standards (originally sponsored by Representatives Kilduff, Pollet, Sells, Gregerson, Valdez, and Ormsby)

AN ACT Relating to industrial insurance employer penalties, duties, and the licensing of third-party administrators; amending RCW 51.48.010, 51.48.017, 51.48.030, 51.48.040, 51.48.060, and 51.48.080; adding a new section to chapter 51.48 RCW; adding a new section to chapter 51.14 RCW; prescribing penalties; and providing effective dates.

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

Sec. 1. RCW 51.48.010 and 1985 c 347 s 2 are each amended to read as follows:

Every employer shall be liable for the penalties described in this title and may also be liable if an injury or occupational disease has been sustained by a worker prior to the time he or she has secured the payment of such compensation to a penalty in a sum not less than fifty percent nor more than one hundred percent of the cost for such injury or occupational disease. Any employer who has failed to secure payment of compensation for his or her workers covered under this title may also be liable to a maximum penalty in a sum of ((five hundred))one thousand dollars or in a sum double the amount of premiums incurred prior to securing payment of compensation under this title, whichever is greater, for the benefit of the medical aid fund.

Sec. 2. RCW 51.48.017 and 2010 c 8 s 14011 are each amended to read as follows:

((If))(1) Every time a self-insurer unreasonably delays or refuses to pay benefits as they become due ((there shall be paid by)), the self-insurer ((upon order of the director an additional amount equal to five hundred dollars or twenty-five percent of the amount then due, whichever is greater, which shall accrue for the benefit of the claimant and shall be paid to him or her with the benefits which may be assessed under this title.))shall pay a penalty not to exceed the greater of one thousand dollars or twenty-five percent of: (a) The amount due or (b) each underpayment made to the claimant. For purposes of this section, "the amount due" means the total amount of payments due at the time of the calculation of the penalty.

(3) The director shall issue an order determining whether there was an unreasonable delay or refusal to pay benefits and the penalty amount owed within thirty days upon the request of the claimant. Such an order shall conform to the requirements of RCW 51.52.050.

Sec. 3. RCW 51.48.030 and 1986 c 9 s 8 are each amended to read as follows:

(1) Every employer who fails to keep and preserve the records required by this title or fails to make the reports provided in this title shall be subject to a penalty determined by the director but not to exceed ((two))five hundred ((fifty)) dollars or two hundred percent of the quarterly tax for each such offense, whichever is greater. Any employer who fails to keep and preserve the records adequate to determine taxes due shall be forever barred from questioning, in an appeal before the board of industrial insurance appeals or the courts, the correctness of any assessment by the department based on any period for which such records have not been kept and preserved.

Sec. 4. RCW 51.48.040 and 2003 c 53 s 282 are each amended to read as follows:

(1) The books, records and payrolls of the employer pertinent to the administration of this title shall always be open to inspection by the department or its traveling auditor, agent or assistant, for the purpose of ascertaining the correctness of the payroll, the persons employed, and such other information as may be necessary for the department and its management under this title.

(2) Refusal on the part of the employer to submit his or her books, records and payrolls for such inspection to the department, or any assistant presenting written authority from the director, shall subject the offending employer to a penalty determined by the director but not to exceed ((two))five hundred ((fifty)) dollars for each offense and the individual who personally gives such refusal is guilty of a misdemeanor.

(3) Any employer who fails to allow adequate inspection in accordance with the requirements of this section is subject to having its certificate of coverage revoked by order of the department and is forever barred from questioning in any proceeding in front of the board of industrial insurance appeals or any court, the correctness of any assessment by the department based on any period for which such records have not been produced for inspection.

Sec. 5. RCW 51.48.060 and 2004 c 65 s 14 are each amended to read as follows:

Any physician or licensed advanced registered nurse practitioner who fails, neglects or refuses to file a report with the director, as required by this title, within five days of the date of treatment, showing the condition of the injured worker at the time of treatment, a description of the treatment given, and an estimate of the probable duration of the injury, or who fails or refuses to render all necessary assistance to the injured worker, as required by this title, shall be subject to a civil penalty determined by the director but not to exceed ((two))five hundred ((fifty)) dollars.

Sec. 6. RCW 51.48.080 and 1985 c 347 s 7 are each amended to read as follows:

Every person, firm or corporation who violates or fails to obey, observe or comply with any statutory provision of this act or rule of the department promulgated under authority of this title, shall be subject to a penalty of not to exceed ((five hundred))one thousand dollars.

NEW SECTION.  Sec. 7. A new section is added to chapter 51.48 RCW to read as follows:

(1) The penalties payable pursuant to this chapter shall be adjusted for inflation every three years, beginning July 1, 2023, based upon changes in the consumer price index during that time period.

(2) For purposes of this section, "consumer price index" means, for any calendar year, that year's average consumer price index for the Seattle, Washington area for urban wage earners and clerical workers, all items, compiled by the bureau of labor statistics, United States department of labor.

(3) During the last quarter of the year preceding the scheduled inflationary adjustment, the department will gather stakeholder comment on the anticipated adjustment.

NEW SECTION.  Sec. 8. A new section is added to chapter 51.14 RCW to read as follows:

(1) Self-insured employers may elect to have their claims administered by a third party or they may elect to self-administer their claims. Third-party administrators given the responsibility of administering the claims of workers by an employer shall be licensed by the department. All employer claims administrators given the responsibility of administering the claims of workers shall maintain certification established by the department.

(2) The department shall adopt rules to administer this section. The rules for licensing third-party administrators must:

(a) Incorporate the department's rules for self-insurers in effect as of March 2020;

(b) Include criteria for determining appropriate penalties for violation of their responsibilities and duties, including managing claims, engaging in the department's management of claims, coordinating proper employment of injured workers during the pendency of the worker's claim, making requests of the department in individual cases, or participating in appeals involving a worker's benefits in a way that furthers the purpose of this title;

(c) Consider recognized and approved claim processing practices within the industrial insurance industry, and the industrial insurance laws and rules of this state;

(d) Consider similar licensure rules under the insurance laws and rules of this state; and

(e) Include requirements for maintaining a license, and any penalties for violation of those licensing requirements.

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