WSIA

Today is the 33^rd day of our 60-day regular session, and the major focus of both chambers is on floor action. The committee cutoff for bills with fiscal impact passed on Tuesday, and the next key deadline for bills is next Wednesday, February 19^th, at which point bills not considered “necessary to implement the budget” (NTIB) must pass their chamber of origin.

At this point, nothing “good” from our perspective is moving. A handful of problematic bills are marching along, with one particularly egregious bill likely to be amended down to (mostly) an interim working group. Here’s a run-down:

 SHB 2409, Penalties.

This bill is in the House Rules committee and could be eligible for a floor vote between now and the 02/19 cutoff. It vastly increases penalties on employers and providers, and includes a “per occurrence” multiplier for the self-insurance benefit delay penalty. The multiplier has been amended out of committee to an “up to” amount of $1,700 (or 25% of benefit amount, whichever is greater) rather than a minimum amount of $1,700/25%. It’s still bad. The amendment also sneaks in a penalty for general violations of Title 51 statutory requirements alongside the existing penalty for violation of LNI rules. It continues to index the penalty amounts to year-over-year wage inflation, providing for indefinite annual escalation.

The bill’s original “fiduciary duty of good faith and fair dealing” imposed on all employers and employer representatives has been replaced with “a responsibility of fair conduct relating to all aspects of a claim.” We do not know what this means, because the bill doesn’t say so; it delegates rule-making authority to LNI to define what a violation of this responsibility may be. It does, however, provide that a violation of whatever this duty may turn out to be is punishable with a penalty of one to ten times the average weekly wage at the time, depending on LNI’s determination of the severity of the violation.

 Finally, the bill continues to advance an ambiguous, poorly worded provision that says “Self-insured employers may elect to have their claims administered by a third party or they may elect to self-administer their claims. Regardless of which method of claims administration chosen by self-insured employers, persons, and businesses who are given the responsibility of administering the claims of workers shall be licensed by the department.” What exactly does that mean? We don’t know – the language continues, “The department shall adopt rules to administer this section.”

The opposition to SHB 2409 is broad and deep throughout the employer community. See the attached one-pager our industry allies are using with us amongst legislators. Advocates from these organizations and several member companies are working frenetically to persuade legislators, particular in the majority party, to reject this bill.

SSB 6440, IMEs

What started out as a catastrophic set of restrictions and regulations on the conduct of IMEs is now likely to pass with a negotiated amendment that still carries forward a few new provisions into the IME statute but for the most part refers most of the issues contained in the original bill to an interim working group.

Although we are not supportive of, and have explained challenges with the remaining provisions – reference to “a new medical issue,” the limitation on no-show fees, the limitation of purposes for IMEs, and the “reasonably convenient” location and telemedicine provisions -- it was necessary to stand down on these in order to eliminate provisions on department scheduling of self-insured IMEs, a limit on the number of IMEs, and so on. These are issues referred to a newly created legislative/department working group under the amendment. They certainly may come back as policy proposals again next session and beyond, but by getting them out of the legislative process we preserve an opportunity to have a substantive, rather than political, discussion about their impact on the system.

The text of the floor amendment is here. Again, some problematic provisions will survive into enactment under this. But it represents an extremely heavy, and all-things-considered successful, lift by a number of advocates on this bill to escape with just these provisions. This was billed from the start of session as a top priority of the trial lawyers’ association and unfortunately for our interests, that group presently enjoys a very favorable legislative composition.

SSB 6552, 3-Day Waiting Period

As introduced, this bill eliminated the 3-day waiting period from date of injury on time loss benefits. As amended, it retains the 3-day period but reduces the 14-day retroactive period for catching them up down to 7-days. This would obviously increase costs for short-term time loss claims, and put Washington in a very small minority of states with retroactive periods under 14 days. The bill is in the Senate Rules committee and probably will pass the Senate by the 02/19 cutoff. Industry groups are opposing the bill, but with most fire trained on the aforementioned 2409 and 6440, this bill has some space in which to pick up legs.

SSB 6331/SHB 2493, Captives

For those WSIA members with captive insurance subsidiaries, the legislative debate between employers and the Office of Insurance Commissioner (OIC) over the recognition and taxation of these captives continues. We have received word that the House and Senate bills, though they did not emerge from their respective committees by the fiscal cutoff Tuesday, are considered NTIB and will be a subject of continued discussion through the remainder of session. The primary unresolved issue that defines the positions between the affected employer community and the OIC is whether the captive should be subject to a 2 percent premium tax on insurance written for nationwide property and casualty risk, or just Washington State risk. A secondary issue may be whether “Washington State risk” will include workers’ compensation obligations or not. WSIA’s position has been that self-insured Washington workers’ compensation should be excluded from any captive regulation or taxation by OIC because it is already taxed and regulated by Labor & Industries and is nothing more legally significant under L&I rules than internal self-insurance program administration.  

2SHB 1965, “Qui Tam”

Finally, we are now tracking a new bill for us, although it has been in the system since last year’s legislative session. HB 1965, as introduced and in its current iteration, would add a “qui tam” suit or private right of action on behalf of the state to enforce a long and comprehensive list of labor and employment laws, including, very problematically, WISHA. The bill also contains provisions authorizing an individual to sue under these various laws with an allegation they have been misclassified as an independent contractor. Among many other ills, this bill if enacted would have a profound and uncertain impact on L&I’s entire regulatory scheme related to workplace safety, as it would allow any individual to bring a private lawsuit to enforce any aspect of the multi-volume set of industrial safety and health rules on the books. Like IMEs above, this “qui tam” bill is evidently a top priority of the state’s trial lawyers’ association, and it is being resisted by industry groups. There is evidently a floor amendment, text here, that represents the latest thinking on the measure and word is that the bill could be passed off the House floor as early as today to then by considered by the Senate.