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.