Washington state: Senate approves bill to return premiums to employers who improve safety

Lawmakers in Washington state approved legislation that would reward employers who improve their workplace safety records by returning a portion of their workers' compensation premiums.

S. 6035, which passed by a narrow one-vote margin, would focus on retrospective rating plans, which are optional programs offered by the state Department of Labor and Industries that allow groups of employers to assume a portion of industrial insurance risk. Employers in a retrospective rating program group their individual premiums and claim losses as a single entity. Premiums for the group are adjusted based on the group's actual claim losses during the coverage period. The group receives a refund if the combined premiums exceed the combined claim losses. Likewise, the group is assessed additional premiums if the combined claim losses exceed the combined premiums.

The legislation would encourage retrospective rating group sponsoring entities to use refunds to create and maintain programs that improve workplace safety, prevent accidents, and improve worker outcomes while distributing the remainder of the refund to employer members of the group and to make subject to the optional annual authorizations by the members of the group.

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The bill stipulates that the Legislature intends to make information concerning the sponsoring entities' administration of the program available to restore public confidence in the use of retrospective rating funds.

April 20, 2009

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