A problematic bill for cities that self-insure for workers’ compensations claims had a hearing last week and is scheduled for a committee vote in the Senate this week.

HB 1521 creates a duty of “good faith and fair dealing” for self-insured employers and their third-party administrators (TPAs) towards workers in self-insured workers’ compensation programs, with penalties for violating “good faith,” including “coercing” an injured worker to “accept less than the compensation due under [state industrial insurance laws].” It also contains a short 10 working day timeline for TPAs to reply to complaints, or else the Department of Labor & Industries (L&I) can order resolution of complaints without the TPA’s side of the story.

AWC is opposed to the bill and is recommending an amendment to:

• Clarify that a violation requires a willful failure to act in “good faith and fair dealing.”
• Remove L&I’s rulemaking authority under the bill to further define the duty of “good faith and fair dealing.”
• Remove the 1x to 52x the average weekly wage penalty in favor of treble penalties already contained in the bill.
• Make it clear that the bill does not create a new private right of action or expand an existing private right of action.

There are currently 18 cities that are self-insured:

• City of Auburn
• City of Bellevue
• City of Bellingham
• City of Bremerton
• City of Everett
• City of Kent
• City of Longview
• City of Olympia
• City of Puyallup
• City of Redmond
• City of Renton
• City of Richland
• City of Seattle
• City of Spokane
• City of Tacoma
• City of Vancouver
• City of Walla Walla
• City of Yakima

Dates to remember

SB 1521 is scheduled for a committee vote on Thursday, March 23 in the Senate Labor & Commerce Committee at 10:30 am.