Date of Adoption: November 20, 2002.

     Purpose: Adoption of rules applicable to labor and industries retrospective rating program. These rules are designed to comply with rule-making requirements codified under chapter 51.18 RCW.

     Citation of Existing Rules Affected by this Order: Repealing 24; and amending 8.

     Statutory Authority for Adoption: RCW 51.18.010(1).

      Adopted under notice filed as WSR 02-17-105 on August 21, 2002.

     Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.

     Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.

     Number of Sections Adopted on the Agency's Own Initiative: New 17, Amended 8, Repealed 24.

     Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 17, Amended 8, Repealed 24.

     Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0;      Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 17, Amended 8, Repealed 24.
     Effective Date of Rule: January 1, 2003.

November 20, 2002

Gary Moore

Director

OTS-5775.5

AMENDATORY SECTION(Amending WSR 00-11-060, filed 5/12/00, effective 7/1/00)

WAC 296-17-90401   Introduction.   ((Retrospective rating is a program designed to encourage workplace safety and accident prevention for employers that insure their workers' compensation obligations with the state fund. The 1999 session of the legislature finding that the goal of workplace safety has been enhanced by retrospective rating determined that the plan provided for in RCW 51.16.035 should be formalized in its own section of law (RCW 51.18.005). By legislative policy (RCW 51.18.010) retrospective rating should encourage broad participation by employers and organizations that sponsor retrospective rating groups.

     To implement the retrospective rating plan provided for in RCW 51.18.010 we have developed a series of formal rules found in the Washington Administrative Code (WAC). As required by law these rules are based on recognized principles of insurance. WAC 296-17-90401 through 296-17-90497 contains the general and special rules and rating plan tables applicable to the department's voluntary retrospective rating program. We refer to the individual rules (WACs) as sections and the complete body of sections as the retrospective rating manual. The retrospective rating manual contains sections (WACs) that define or explain:

     • Words or phrases that we use;

     • The steps you must take to participate in the program;

     • How group plans are authorized;

     • Why members of a group must be involved in similar business operations;

     • The need to have an insurance account with the department and keep it in good standing in order to participate in this voluntary rating plan;

     • Workplace safety requirements of the plan;

     • Contract restrictions and refund requirements;

     • Formulas used to establish retrospective premium;

     • Premium size tables;

     • Plan tables.)) To implement retrospective rating (retro) provided for in RCW 51.18.010, labor and industries (L&I) has developed a series of rules that can be found in chapter 296-17 of the Washington Administrative Code (WAC). As required by law (chapter 51.18 RCW), the retrospective rating plan is based on recognized principles of insurance.

Note:

WAC 296-17-90401 through 296-17-90497 contain the general and special rules applicable to retro and the retrospective rating plan.

     What is retrospective rating? Retro is a voluntary financial incentive workers' compensation insurance program offered by L&I. Retro is designed to reward employers participating in the program that are able to keep their claim costs below the preselected level they have chosen. Reductions in claim costs are the result of improvements in workplace safety and injured worker outcomes.

Note:

L&I received legislative authority to offer retro in 1980 (SSB 3169, chapter 129, Laws of 1980) and have offered retro options since 1981. In 1999, the legislature formalized the program in its own section of law (chapter 51.18 RCW) and made retrospective rating a mandatory offering of L&I. (SB 6048, chapter 7, Laws of 1999.)

     What is the reward? Participating employers who are successful may be refunded a portion of the premiums they paid to L&I.

Note:

Retro is not for everyone. An employer may be assessed additional premium if they are not committed to improving workplace safety and accident prevention and/or do not take appropriate action to reduce the frequency and severity of accidents to their employees.

     Are there any fees involved? L&I does not charge fees for this program.

Note:

Organizations that sponsor retro groups can and often do charge their members fees for their services. These fees are not a requirement of L&I nor are they regulated by L&I.

     Who can participate? Any employer that insures their workers' compensation insurance obligations with L&I and meets the requirements contained in the retro rules can participate in retro.

[Statutory Authority: RCW 51.18.010. 00-11-060, § 296-17-90401, filed 5/12/00, effective 7/1/00.]

     Standard premium: The total accident fund and medical aid fund premiums paid (due) by a group or individually enrolled employer for a given coverage period. The supplemental pension assessment portion of total premiums due (paid) is not included. If the group includes employers subject to the staggered enrollment provision of the retrospective rating rules, the standard premium is the total premiums due (paid) for the calendar months in which they have been accepted into a group.)) To reduce misunderstandings that can result by our use of certain words or phrases, we have developed definitions that govern what these words or phrases will mean for retro purposes.

     Account: An individual employer's industrial insurance account and related subaccounts, or in the case of a retro group it means the sponsoring organization's industrial insurance account.

     Account in good standing: A phrase we use when an employer and/or sponsoring organization is current with all payments due L&I and in compliance with L&I laws, rules and regulations at the time of enrollment or reenrollment. For an account to be in good standing you must:

     • Have an active L&I industrial insurance account.

     • Submit all reports required by L&I when they were due.

     • Pay all industrial insurance premium payments, assessments, penalties and interest when due.

Note:

This requirement also includes the payment of other fees, fines, penalties and assessments established by the department such as safety violations and computer access fees. An account may be deemed to be in good standing if the employer or group (sponsoring organization) is current with an L&I approved written repayment agreement.

     • Not participate in the activities described in WAC 296-17-90428 concerning the direct payment of medical services.

Note:

Organizations that sponsor a group must also file the safety plan when applicable (WAC 296-17-90409) and the annual safety report required in WAC 296-17-90411 to be in good standing.

     Adjustment: The process of calculating retrospective premium, and any resulting refund or assessment.

Note:

For the first adjustment of a coverage period, retrospective premium is compared to the standard premium due. The difference will be refunded if the retrospective premium is lower than the standard premium due. You will be assessed the difference if the retrospective premium is higher than the standard premium due. In subsequent adjustments of the coverage period, the new retrospective premium is compared to the prior net retrospective premium to determine the amount of refund or assessment.

Place illustration here.

     Basic premium ratio (BPR): A component of the retrospective rating premium formula. The BPR represents a charge for administrative costs (except claims handling) and an insurance charge that covers the cost of having retrospective premium limited by the selected maximum premium ratio.

     Case reserve: L&I's estimate of the cost associated with a specific claim.

     Coverage period: A twelve-month period beginning January 1 and ending December 31, or April 1 through March 31, or July 1 through June 30, or October 1 through September 30. Only claims with a date-of-injury within the selected coverage period and the standard premium due for the same coverage period are used to calculate retrospective premium. Effective with the October 1, 2000, coverage period and all subsequent coverage periods thereafter, each coverage period will have three mandatory adjustments and no optional adjustments. The first adjustment will occur nine months after the coverage period has ended. Each subsequent valuation will take place in twelve-month intervals.

Note:

The coverage period for a retro group is selected by the sponsoring organization and the coverage period of an individual enrollment is selected by the employer.

     Date of enrollment or reenrollment: A phrase used by L&I to establish when participation in retro begins. The date of enrollment or reenrollment is the first day of the coverage period.

Note:

A sponsoring organization can add new group members each quarter during the coverage period. We refer to this as "staggered enrollment." Employers seeking to participate in an organization's group after the coverage period has begun must meet all of the application requirements found in WAC 296-17-90413. Staggered enrollment applications must be received in our Tumwater office by the 15th calendar day of the month prior to the selected quarter (i.e., December 15 for January 1; March 15 for April 1; June 15 for July 1; or September 15 for October 1). If the due date falls on a weekend or holiday, the application will be due on the next business day. Employers that participate in a retro group on a staggered enrollment basis are required to participate for the remainder of the coverage period unless they sell or close the enrolled business or become self-insured.

     Developed losses, a.k.a. total incurred losses (developed): A component of the retrospective rating premium formula. Based on historical trends we know that the total incurred losses for claims in a coverage period tend to increase over time. This can be the result of claim reopenings, changes in time loss duration, increased medical utilization, etc. The developed losses computation anticipates and distributes these increases among all the participants in a coverage period.

Note:

Developed losses for pension claims are determined by multiplying their incurred losses by the applicable performance adjustment factor. For nonpension claims, developed losses are determined by multiplying their incurred losses by the applicable loss development factors.

     Freeze date: See valuation date.

     Group: Employer members of an organization who have agreed to have their retrospective premium calculated using the combined applicable standard premium and related developed loss data of the participants as a whole.

     Homogeneity: A word used to convey the requirement that retro groups be made up of like businesses.

     Incurred losses: A cost measure of a claim. For open claims, incurred losses are the total of costs paid-to-date which have been assigned to a given employer account, or the case reserve established by the department, whichever is greater. For closed claims, incurred losses are the total of costs paid-to-date which have been assigned to a given employer account, regardless of any case reserve that may have been established.

     Loss conversion factor (LCF): A component of the retrospective premium formula, the LCF represents an expense charge for claims handling and the present value of developed losses.

Note:

LCFs can be found in WAC 296-17-90493 through 296-17-90497.

     Loss development factor (LDF): These are actuarially determined factors that are multiplied by incurred losses of nonpension retro claims to produce developed losses. LDFs are unique to each coverage period, but are the same for every nonpension retro claim in the coverage period.

Note:

LDFs are periodically recalculated. LDFs shown on retro reports have already been adjusted by the applicable performance adjustment factor.

     Loss ratio: The numerical result of dividing developed losses by standard premium.

Note:

The retrospective premium calculation will generate a net refund if the basic premium ratio (BPR) + (Loss Ratio x the Loss conversion factor (LCF)) is less than 1. The BPR and LCF are determined by the plan selected by the individual enrollee, or in the case of a group by the sponsoring organization and the premium size of the individual enrollee or the group. Once these have been selected the retro group can only influence the loss ratio to determine the amount of refund. L&I suggests an evaluation of each claim to determine if there are trends and patterns and that the sponsoring organization implement workplace safety measures to eliminate or reduce loss regardless of the loss ratio.

     Maximum premium ratio (MPR): A factor preselected by the organization (group) or individually enrolled employer. The MPR is multiplied by the standard premium (SP) to determine the maximum retrospective premium requirement for a given coverage period.

Note:

MPRs can be found in WAC 296-17-90493 through 296-17-90497.

     Member of a group: These are the individual employers that participate in a group plan of a sponsoring organization.

     Minimum premium ratio (MnPR): An actuarially determined factor applicable to plans A1, A2 and A3. The MnPR is multiplied by the standard premium (SP) to determine the minimum retrospective premium requirement for a given coverage period.

Note:

MnPRs can be found in WAC 296-17-90494 through 296-17-90496.

     Pension claim: A claim designated as a fatality or total permanent disability.

     Performance adjustment factor (PAF): An actuarially determined factor unique to each retro coverage period that ensures that aggregate refunds reflect the relative performance of retro versus nonretro state fund employers.

     Plan: A numeric table developed by L&I used to calculate the retrospective premium requirement of a group or individually enrolled employer.

Note:

A group or individually enrolled employer preselects from one of five plans (A, A1, A2, A3 or B). The selected plan (along with the MPR and standard premium volume) determines the minimum premium, basic premium and the loss conversion factor that is applied to the developed losses used in the retrospective premium calculation.

     Premium: Money paid (due) from an employer for workers' compensation insurance. It does not include money paid as fees, fines, penalties or deposits.

     Qualified employer: A phrase used by L&I to describe an employer that has an industrial insurance account and that the account is in good standing at the time of enrollment or reenrollment.

     Retrospective premium: The net premium for a group or individually enrolled employer after an adjustment for a given coverage period. The retrospective premium is determined using the formulas and provisions found in WAC 296-17-90446.

     Standard premium: A phrase used by L&I to denote the total accident fund and medical aid fund premiums paid (due) by a group or individually enrolled employer for a given coverage period.

Note:

The supplemental pension assessment portion of total premiums due (paid) is not included. If the group includes employers subject to the staggered enrollment provision of the retro rules, the standard premium is the total accident fund and medical aid fund premiums due (paid) for the calendar months in which they have been accepted into a group.

     Valuation date: The date selected by L&I in which incurred losses for applicable claims are measured and captured for the purpose of calculating retrospective premium.

Note:

Changes in incurred losses that occur after the valuation date will not be considered until the next applicable valuation date. The first valuation date is nine months after the coverage period ends. All subsequent valuations will occur in twelve-month intervals.

[Statutory Authority: RCW 51.18.010. 00-11-060, § 296-17-90402, filed 5/12/00, effective 7/1/00.]

Note:

Organizations that sponsor retro groups can establish enrollment requirements beyond those required by L&I. Employers interested in participating in a group should contact the organization that sponsors the group they are interested in directly for their requirements. Links to these organizations can be found at the retro website (www.lni.wa.gov/retro/).

[]

     Your responsibility:

     To enroll in an individual retro:

     You must:

     • Have an active L&I industrial insurance account.

     • Keep your L&I industrial insurance account in good standing.

     • Enroll all similar businesses that you own or have a controlling interest in.

Note:

A controlling interest means that you or a common set of owners own more than fifty percent of each business. If you acquire, purchase or start a new or existing business that you report in a separate L&I subaccount during the current coverage period that is of a similar business nature as the business enrolled in retro, the new business or businesses must be enrolled in retro for the remainder of the coverage period.

     Example: You operate a chain of ten grocery stores. Each store is operated at a different location. You have requested that each store be assigned a special account (subaccount). You must enroll all ten stores in a retro plan. In addition, your company also has a separate administrative office. This office reports under the clerical office classification. You may elect to include your administrative office.

     • Participate in retro for the entire coverage period unless you become a self-insured employer, sell or close your business and close your industrial insurance account.

Note:

This requirement also applies to an employer's participation in a retro group. L&I will use the reported exposure (standard premium and developed losses) of the employer for the portion of the coverage period the business operated in the retrospective premium calculation for the group.

     • Have at least a minimum annual standard premium of $3,202.

     • Select the maximum premium ratio and plan (A, A1, A2, A3 or B) that you wish to participate in. You should consider the benefits and risk of each plan and maximum premium ratio in making this selection.

Note:

Plan and maximum premium ratio choices cannot be changed after the coverage period begins.

     • Obey L&I's laws, rules and regulations.

     • Complete, sign and return a copy of the "Individual Retrospective Rating Plan Agreement" form to L&I by the due date indicated on the form.

Note:

Most employers participating in retro do so as a member of a group. If you are interested in participating in a group, you should contact the organization that sponsors the group you are interested in. They can tell you what their requirements are. Some organizations require a minimum standard premium for participation in their group. Any requirements other than those listed above are requirements of the organization that sponsors the retro group and not those of L&I.

Place illustration here.

Note:

If you contact us, we will send you a copy of the agreement form. A copy of the form can also be found at the retro website (www.lni.wa.gov/retro/).

     • Not participate in prohibited activities such as, but not limited to, direct payment of medical services for a job related injury or illness.

     We may require:

     • You to provide us (L&I) with a surety bond or an assignment of savings.

     If required:

     • The surety bond or assignment of savings will be executed on forms authorized by L&I.

Note:

The surety bond or assignment of savings requirement will be based on the difference between the participants' estimated standard premium and the maximum premium due under the applicable retro plan. If the standard premium falls within two increment ranges, the bond will be at the next higher thousand-dollar increment. The surety bond or assignment of savings must be in full force and effect for the entire coverage and the related adjustment periods.

     Our responsibility:

     Upon receipt of the required forms and documents:

     We will:

     • Review the documents you have submitted and the Individual Retrospective Rating Plan Agreement form for completeness.

     • Verify that your L&I industrial insurance account is in good standing at the time of enrollment.

     • Notify you in writing of our acceptance or denial of your application to participate in retro.

[]

     Your responsibility:

     To reenroll in an individual retro:

     You must:

     • If before April 1, 2003, complete, sign and send L&I a new "Individual Retrospective Rating Plan Agreement" form by the due date indicated on the form.

Note:

Beginning with the April 1, 2003, coverage period, and for each subsequent coverage period thereafter, L&I will automatically reenroll you in the same plan and maximum premium ratio that you previously selected provided your L&I industrial insurance account is in good standing at the time of reenrollment and you are in compliance with the requirements and conditions found in WAC 296-17-90405.

     • For coverage periods beginning on or after April 1, 2003, complete, sign and send L&I a new Individual Retrospective Rating Plan Agreement form only if you want to change plans, coverage periods or the maximum premium ratio by the due date.

Note:

If you contact us we will send you a copy of the agreement form. A copy of the form can also be found at the retro web site (www.lni.wa.gov/retro/).

     Our responsibility:

     If you contact us and ask us for assistance:

     We will:

     • Review with you your current premium and losses.

     • Answer questions that you have on different plans and maximum premium ratio options you are considering.

[]

     (6) The requirements contained in this rule are in addition to any other requirements contained in the retrospective rating manual such as those found in WAC 296-17-90412(2) applicable to an annual safety report and WAC 296-17-90421(2) applicable to selection of an industry group by the sponsoring organization.)) Your responsibility:

     To sponsor a new retro group after July 25, 1999:

     You must:

     • Have an L&I industrial insurance account and the account must be in good standing at the time of enrollment.

     • Be an organization with dues paying members.

Note:

This requirement is intended to provide a distinction between a business enterprise with clients not permitted to sponsor a retro group and an organization with members that can sponsor one or more retro groups. We recognize that some organizations may be funded through member donations and not dues. If your members do not pay dues, you must provide L&I a written confirmation of this fact when you send in your signed and completed group application.

     • Provide L&I with copies of your organization's articles of incorporation, bylaws and marketing/membership applications or similar material.

Note:

This information is to be submitted with your completed group application.

     • Be formed for purposes other than:

     – Obtaining or offering insurance coverage or insurance related services.

Note:

In addition to these prohibitions, an insurer, insurance broker, insurance agent or insurance solicitor may not participate in the formation of a retrospective rating group; or sponsor a retrospective rating group. Since enhancement of workplace safety for the group is a principal requirement of retro, an organization that offers services primarily related to risk management, safety, loss control or claims administration will be deemed to be set up for the sole purpose of participating in retro and will not qualify to sponsor a retro group.

     – Sponsoring a retro group and participating in L&I's retrospective rating program.

Note:

We will verify the purpose(s) of the organization from the information contained in the articles of incorporation, bylaws, contracts and/or advertising material of the organization and contacts with other state agencies.

     • Have been in existence for at least four years prior to sponsoring a retro group.

     • Submit a written workplace safety and accident prevention plan to L&I.

Note:

The written safety plan must demonstrate to L&I's satisfaction that formation of the group will substantially improve workplace safety and accident prevention for the group members. The safety plan must be tailored to the business/industry of the group members and include an evaluation of the group members' past claims.

     • Cooperate with L&I's claims management activities.

     • Obey L&I laws, rules and regulations.

     • Complete an Application for Group form and send it to L&I.

Note:

When you complete this application, you will need to select the single industry or business category that will be applicable to your group, the maximum premium ratio and plan (A, A1, A2, A3 or B) that will apply to the group for the coverage period. You should consider the benefits and risk of each plan and maximum premium ratio in making this selection. Plan and maximum premium ratio choices cannot be changed after the deadline listed below.

Coverage period	Received by
Jan. 1 through Dec. 31	Oct. 31
April 1 through March 31	Jan. 31
July 1 through June 30	April 30
Oct. 1 through Sept. 30	July 31

Place illustration here.

     • Send us a cover with letter on your organization's letterhead that lists the documents being enclosed and that the information contained in the documents is accurate as of the date of submittal.

Note:

The new group information must be received in our Tumwater office by 5:00 p.m. (Pacific time) on the due date.

     Our responsibility:

     Upon receipt of the required information:

     We will:

     • Notify you in writing of any deficiency in your workplace safety and accident prevention plan.

     • Determine if your organization is qualified to sponsor a new retro group and notify you of our decision.

[Statutory Authority: RCW 51.18.010(2). 01-23-058, § 296-17-90409, filed 11/20/01, effective 1/1/02. Statutory Authority: RCW 51.18.010. 00-11-060, § 296-17-90409, filed 5/12/00, effective 7/1/00.]

     Our responsibility:

     If we determine that your organization is qualified to sponsor a new retro group:

     We will:

     • Send you a "Group Retrospective Rating Agreement" form that must be signed, completed and returned by the date indicated on the form.

     • Send you a blank Application for Group Membership and Authorization for Release of Insurance Data form.

Note:

You should make copies of the application form and give a copy to each proposed group member. L&I requires an application for each proposed member.

     Your responsibility:

     When you receive the application forms:

     You must:

     • Send L&I a signed and completed Application for Group Membership and Authorization for Release of Insurance Data form for each proposed group member.

Note:

An owner, partner or corporate officer of each business must sign the Application for Group Membership form.

     • Provide L&I with documentation to establish that at least fifty percent of the proposed group members have been members of the sponsoring organization for at least one year prior to the first day of the selected coverage period.

Note:

The documentation must include the name of the employer member and the date they became a member of the organization.

     • Supply L&I with a surety bond if requested to do so.

Note:

If required the surety bond will be in an amount equal to the difference of the projected standard premium of the retro group and the maximum premium under the plan selected rounded to the nearest thousand dollar increment. If a bond is required it is to be in effect until the coverage period has been finalized. This includes the period related to the annual adjustments of the coverage period and periods covered by any appeal of that coverage period.

     • Complete, sign and return to L&I by the due date indicated on the agreement a "Group Retrospective Rating Agreement" form.

Note:

The "Application for Group Retrospective Rating" form required in WAC 296-17-90409 and the "group retrospective rating agreement" required by this rule are separate forms. Both forms are required of a new group.

Place illustration here.

     • Send these required documents to L&I by the date indicated on the Group Retrospective Rating Agreement form.

     Our responsibility:

     Upon receipt of required information:

     We will:

     • Verify that the sponsoring organization has an active L&I industrial insurance account and that the account is in good standing at the time of enrollment.

     • Verify that each proposed member has an active L&I industrial insurance account and that the account is in good standing at the time of enrollment.

Note:

An employer with multiple L&I accounts must enroll all businesses that are of a similar business nature in retrospective rating. If we discover that an employer has multiple L&I accounts, we will notify the sponsoring organization of this fact. The sponsoring organization is required to obtain an application from the remaining accounts within thirty days of our notice or none of the employer's accounts will be enrolled in the group.

     • Verify that the nature of business of each proposed member falls appropriately within the business/industry category selected by the organization.

     • Verify that the proposed new group has a total group standard premium of at least $1.5 million for the initial coverage period.

Note:

The group standard premium will be based on the standard premiums of the proposed group members' most current fiscal year (four quarters) of reporting.

     • Verify that at least fifty percent of the proposed group members have been members of the sponsoring organization for at least one year prior to group sponsorship.

Note:

All employers of the proposed retro group must be members of the sponsoring organization.

     • Notify you of our decision in writing.

[]

     Your responsibility:

     To continue to sponsor an existing retrospective rating group:

     You must:

     • Complete, sign and return the Group Retrospective Rating Agreement form by the date indicated on the agreement form.

Note:

If you do not want to change plans, maximum premium ratio or coverage periods, you do not need to send in a new application for group retrospective rating for each new coverage period. L&I will assume the same plan, maximum premium ratio and coverage period. If your organization wants to change plans, maximum premium ratio or coverage period, you will need to submit a new application for group retrospective rating by the due date indicated on the application form. In the event that a sponsoring organization wants to change their business or industry category, they must notify L&I either by letter or by completing a new application for group retrospective rating by the due date indicated on the application form.

     • Submit a completed and signed "Application for Group Membership and Authorization for Release of Insurance Data" form for each new proposed member.

Note:

These applications can be submitted throughout the coverage period. See employer group member requirements for detail of when enrollment begins. If the sponsoring organization changes plans, maximum premium ratios or coverage period, they must secure new applications from each member or get preapproval from L&I if a different method will be used to serve notice to members of the change.

     • Provide L&I an annual written report that highlights workplace safety accomplishments of the group during the past coverage year and identifies areas that the group has targeted for improvement during the next coverage period.

Note:

The written annual safety report is due in the Tumwater office no later than the last day of the month prior to the beginning of the coverage period. If the due date falls on a weekend or holiday, the safety report will be due on the next business day. If you fail to submit the required written report when due, it will result in disqualification of the group. If this occurs, the sponsoring organization can requalify to sponsor the group but must satisfy the requirements applicable to new groups found in WAC 296-17-90409 and 296-17-90410.

     • Supply L&I with a surety bond or assignment of savings if requested to do so.

     Our responsibility:

     Upon receipt of the required forms and the annual safety report:

     We will:

     • Verify that the sponsoring organization's L&I industrial insurance account is in good standing at the time of reenrollment.

     • Verify that the individual employer member L&I industrial insurance accounts are in good standing at the time of reenrollment.

     • Provide written feedback on the sponsoring organization's annual safety report and if applicable request revisions to the report.

Note:

The department will notify the sponsoring organization of any concerns or needed changes to the safety report within thirty days of submission of the plan. The sponsoring organization is to submit a response and/or revised safety report as applicable within sixty days of our notification to them of our concerns or needed changes or as otherwise agreed upon by the department.

     • Notify the sponsoring organization in writing of our decision to reenroll the group and the group members.

     • Notify the sponsoring organization in writing of our decision to deny reenrollment to the group or group members.

     We may:

     • Request the sponsoring organization to post a surety bond or assignment of savings in the amount of the difference between the projected standard premium of the group and the maximum premium under the plan selected.

     Our responsibility:

     If we require a surety bond or assignment of savings:

     We will:

     • Notify you in writing of this decision.

[]

     Employer's responsibility:

     To initially enroll in a retro group:

     You must:

     • Be a dues paying member of the organization that sponsors the retro group you wish to join.

     • Complete an "Application for Group Membership and Authorization for Release of Insurance Data" form supplied to you by the sponsoring organization.

Note:

You must send this application to the sponsoring organization by the date requested. Do not send it directly to L&I.

Place illustration here.

     • Have an active L&I industrial insurance account and the account must be in good standing at the time of enrollment.

     • Comply with L&I laws, rules and regulations.

     • Enroll all businesses that you (the employer member) own or have a controlling interest in and whose nature of business is substantially the same.

Note:

For purposes of retro, a controlling interest means more than fifty percent ownership in one or more business by the same owner or owners.

     Example: You operate a chain of ten grocery stores. Each store is operated at a different location. You have requested that each store be assigned a special account. In addition to the ten stores, your company also has a separate administrative office. This office reports under the clerical classification. You must enroll all of your store locations if you are to participate in retro. The sponsoring organization may allow you to include your administrative office in the retro group.

     • Authorize the sponsoring organization to represent you in all matters pertaining to your participation in their retro group for the requested coverage period and all subsequent adjustment periods.

     Sponsoring organization's responsibilities:

     To enroll new members:

     You must:

     • Forward to L&I any application for your retro group that you want L&I to consider by the due date for the selected coverage period or staggered enrollment quarter.

     • Represent all proposed and approved group members in all matters pertaining to their participation in your retro group for the requested coverage period and subsequent adjustment periods.

     • Communicate L&I decisions directly to the members affected by the decision.

     Our responsibilities:

     Upon receipt of an "application for group membership and authorization for release of insurance data":

     We will:

     • Verify that the proposed members' business operations consist of substantially similar services and activities of other approved members and are within the business/industry category selected by the sponsoring organization.

     • Verify that each proposed member has an active L&I industrial insurance account and that the account is in good standing at the time of enrollment.

     • Notify the sponsoring organization in writing of our decision to allow or deny enrollment to any proposed member.

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     Employer's responsibility:

     To reenroll in the same retro group:

     You must:

     • Maintain your L&I industrial insurance account so that it is in good standing at the time of reenrollment.

Note:

You do not need to complete a new application for group membership to reenroll in future coverage period and the same retro group. L&I will automatically reenroll you in the existing retro group if your account is in good standing at the time of reenrollment. If you want to discontinue participating in the current retro group, you will need to notify L&I and the sponsoring organization of the retro group that you are leaving us in writing prior to the first day of the new coverage period. If you want to change to a different retro group, you will need to contact the organization that sponsors the group you are interested in and notify L&I in writing of your decision to change retro groups before the applicable enrollment deadline. Failure of an employer to notify L&I of a decision to change groups may result in the employer being enrolled in the former group and not the new group.

     • Participate for the entire coverage period unless you sell or close your business.

     Sponsoring organization's responsibility:

     To reenroll existing members in your retro group for the next coverage period:

     You must:

     • Secure authorization annually from members that want to continue to participate in your retro group.

     • Keep these authorizations on file for the selected coverage year and subsequent adjustment periods. These records are to be made available for department inspection upon request.

     • Notify L&I in writing of any changes (deletion) of participating members before the first day of the new coverage period.    

     Our responsibility:

     Unless the participating employer member of a retro group or the sponsoring organization notifies L&I in writing:

     We will:

     • Automatically reenroll the employer member in the retro group for each subsequent coverage period provided the employer's L&I industrial insurance account is in good standing at the time of reenrollment.

Note:

This procedure is intended to reduce the administrative burden on employers associated with the reenrollment process. A sponsoring organization can adopt a similar procedure to eliminate the need of the annual authorization by members. To do this the sponsoring organization must send L&I a letter outlining this intent and then send written notice to all affected members with a copy of the notice to L&I. This notice must indicate the method that a participating member must follow should they wish to not participate in the retro group in the future.

     • Provide the organization with a list of businesses that are seeking to withdraw from the retro group they sponsor prior to the beginning date of the coverage period.

Note:

The organization should contact members to verify the change. Often the member is not seeking to change plans but is simply confused by marketing material of another group. If we do not hear from the employer or the sponsoring organization, we will enroll the employer's business in the new group.

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     Example: Having selected the agriculture and related services business/industry grouping the department would verify that the employer members of the apple grower organization were either apple growers or were involved in a related service such as an apple processing operation owned by the grower.)) Washington law (RCW 51.18.040) requires retro groups to be made up of employer members who are engaged in substantially similar business operations when the nature of their services or work activities of employees is considered.

     Your responsibility:

     To ensure that this requirement is met at the time you submit the application for group to L&I:

     You must:

     • Select the single business or industry category that will apply to the retro group you seek to sponsor from the categories listed below:

     • Agriculture and related services, including services related to the care and breeding of animals, and all agricultural related activities including growing, harvesting, packing, and processing for shipment.

     • Automotive, truck and boat, manufacturing, sales, repair and related services.

     • Construction and related services.

     • Distillation, chemicals, food and related services.

     • Entertainment, hospitality and related services.

     • Facilities, property management, maintenance and related services.

     • Government, utilities, schools, healthcare and related services.

     • Grocery stores, grocery distribution centers, bakeries, milk and dairy products processing, delivery to customers and related services.

     • Healthcare, pharmaceutical, laboratories and related services.

     • Logging and wood products manufacturing and related services.

     • Manufacturing, processing, mining, quarrying, and related services.

     • Retail and wholesale stores and professional services such as banks and law firms and related services.

     • Temporary help and related services.

     • Transportation, recycle, warehousing, facility maintenance and related services.

     Example: An organization that was formed to advance the interests of apple growers would select the agriculture and related services business/industry group plan. This organization could sponsor a single group for all its grower members or could offer different performance groups for its grower members.

     Our responsibility:

     Upon receipt of your application for group:

     We will:

     • Update our records to reflect the category selected by the sponsoring organization.

     • Screen prospective group members to ensure that their business operations fit appropriately in the category selected.

     • Send you a list of the businesses that we determine fit appropriately in the category selected and those that do not.

Note:

Only those members whose business undertakings are substantially similar to the industry/business group selected by the organization will be permitted to participate. This grouping technique is fundamental to workers' compensation insurance and is referred to as "homogeneity of risk." Once an employer has been approved for a group, they remain approved provided their industrial insurance account is in good standing during the enrollment or reenrollment process.

     Example: Having selected the agriculture and related services business/industry grouping, the department would verify that the employer members of the apple grower organization were either apple growers or were involved in a related service such as an apple processing operation owned by the grower.

[Statutory Authority: RCW 51.18.010(2). 01-23-058, § 296-17-90421, filed 11/20/01, effective 1/1/02. Statutory Authority: RCW 51.18.010. 00-11-060, § 296-17-90421, filed 5/12/00, effective 7/1/00.]

     • Since retro does not use a unique classification scheme (RCW 51.18.040(5)) and because a classification may fall appropriately into multiple business or industry categories (RCW 51.18.040(4)) L&I does not assign classifications to retro groups.

     • L&I approves employers to participate in a retro group by considering the activities and services being provided by employees of the employer. This ensures that the activities and services of the employer's business are substantially similar to the activities and services of the retro group.

Note:

In the event that a retro group does not exist for an employer seeking to participate in a retro group, L&I will use an analogy approach to identify a possible group or groups that an employer may participate in. This procedure is intended to encourage the broad participation goals of chapter 51.18 RCW.

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     • Organizations that sponsored a retro group prior to July 25, 1999, can sponsor an additional group after January 1, 2003.

Note:

A sponsoring organization can propose to sponsor one additional group every five years. Each new group must meet the requirements found in WAC 296-17-90409.

     • Organizations that sponsored a retro group after July 25, 1999, must wait five years after their last group was approved before they can sponsor a new retro group.

Note:

A sponsoring organization can propose to sponsor one additional group every five years. Each new group must meet the requirements found in WAC 296-17-90409.

     • An organization may:

     – Divide an existing retrospective rating group into two or more groups provided that the proposed new groups fall within the same business or industry category as the group that is proposed to be divided; or

     – Merge existing retrospective rating groups into one business or industry category provided that the proposed merged groups fall within the same business or industry category.

Note:

Under no circumstance may a sponsoring organization propose more than one retro group or multiple business or industry categories in the same application to L&I.

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     • The retro group is required to pay additional net premium assessments in three consecutive coverage periods.

Note:

The retro group will be placed in probationary status if they are required to pay additional net premium in two consecutive coverage periods. Once a group is placed on probationary status, the department will review the group's workplace safety and accident prevention plan and its methods for cooperation with department claims management activities. Following the review, the department will make recommendations for corrective steps that may be taken to improve the group's performance. In the event that the group's performance is not improved and the same retrospective rating group is required to pay an additional net premium assessment in the third consecutive coverage period, that group shall be denied future enrollment in the state's retrospective rating plan at the next enrollment. In addition, the sponsoring entity of the failed group may not sponsor another group in the same business or industry category for five coverage periods (sixty months) from the ending date of the failed group's last coverage.

     • The organization encourages a participating member to pay a medical service provider directly for treatment of participating members' employees.

Note:

Upon discovery of this violation, L&I will disqualify the retro group affected from further participation in the program and will issue an order and notice of decision to the sponsoring organization outlining the alleged violation. A sponsoring organization found to have participated in this activity will lose their right to ever sponsor a retro group in the future. All refunds earned by a retro group disqualified for this activity and not yet distributed by L&I will be forfeited.

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     Your responsibility:

     If you change the legal structure of your business or sell your business:

     You must:

     • Notify us promptly in writing of this change.

Note:

If the change in ownership is limited to a change in legal structure, we may allow the new entity to continue to be a member of the group without a new application. If on the other hand the change results in new ownership, the new owner(s) will need to reapply if they want to participate in the group plan.

     Example: A business operated as a sole proprietorship changes their legal structure to a corporation. Assuming the sole proprietor owner owns more than fifty percent of the stock in the corporation, we would allow this business to continue to be a member of the group without a new application.

     Our responsibility:

     Upon receipt of your notification:

     We will:

     • Determine if you need to complete a new application form to continue participation in the retro group.

     • Notify the sponsoring organization of the change in the legal structure of your business and whether or not a new application will be needed for the member.

     Sponsoring organization's responsibility:

     If L&I requires a new application for a member:

     You must:

     • Secure the new application from the member and forward it to L&I by the date indicated on the application.

Note:

If we do not receive the application by the due date, the employer will not be enrolled in your retro group.

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     Your responsibility:

     If for any reason you are unable to return the original signed copy of an application or agreement to L&I by the due date:

     You must:

     • Call L&I at 360-902-4851 during regular business hours (Monday through Friday 8:00 a.m. - 5:00 p.m. Pacific time) to let us know that you are unable to mail the application by the due date.

     • Make this call to L&I prior to 5:00 p.m. (Pacific time) on the due date.

     Our responsibility:

     Upon receipt of your call:

     We will:

     • Document your phone call in our files.

     • Discuss with you other options such as a faxed or e-mailed copy of the required documents.

     Your responsibility:

     If we agree to accept a copy of the application, agreement form or other documents:

     You must:

     • Fax or e-mail the completed application or agreement form to our Tumwater office by the due date indicated on the original application.

     • Maintain the original signed application form in your business files so that we may obtain the original from you in the event an issue of authenticity arises.

[]

Note:

Documents sent via the U.S. Postal Service will be considered received by L&I on the day they are postmarked.

     Coverage period - January 1 through December 31

     Individual employer option

     • Individual retrospective rating plan agreement - due to L&I no later than December 15th.

     Example: For the coverage period January 1, 2003, through December 31, 2003, the agreement would be due December 15, 2002.

     Retro group

     • Articles of incorporation, bylaws and marketing information - due to L&I no later than October 31st (new group requirement).

     Example: For the coverage period January 1, 2003, through December 31, 2003, all documents listed that are due October 31st are due October 31, 2002.

     • Workplace safety and accident prevention plan - due to L&I no later than October 31st (new group requirement).

     • Application for group - due to L&I no later than October 31st (new group requirement).

Note:

This requirement also applies to an existing group when making changes to current plan, MPR or coverage period.

     • Cover letter that lists attached documents - due to L&I no later than October 31st (new group requirement).

     • Group respective rating agreement - due to L&I no later than December 15th (new and existing group requirement).

     Example: For the coverage period January 1, 2003, through December 31, 2003, the documents listed that are due December 15th would be due December 15, 2002.

     • Membership verification list - due to L&I no later than December 15th (new group requirement).

     • Application for group membership and release of insurance data - due to L&I no later than December 15th (new and existing group requirement).

     • Annual safety report - due to L&I no later than December 31st (new and existing group requirement).

     Example: For the coverage period January 1, 2003, through December 31, 2003, the annual safety report would be due December 31, 2002.

     Coverage period - April 1 through March 31

     Individual employer option

     • Individual retrospective rating plan agreement - due to L&I no later than March 15th.

     Example: For the coverage period April 1, 2003, through March 31, 2004, the agreement would be due March 15, 2003.

     Retro group

     • Articles of incorporation, bylaws and marketing information - due to L&I no later than January 31st (new group requirement).

     Example: For the coverage period April 1, 2003, through March 31, 2004, all documents listed that are due January 31st would be due January 31, 2003.

     • Workplace safety and accident prevention plan - due to L&I no later than January 31st (new group requirement).

     • Application for group - due to L&I no later than January 31st (new group requirement).

Note:

This requirement also applies to an existing group when making changes to current plan, MPR or coverage period.

     • Cover letter that lists attached documents - due to L&I no later than January 31st (new group requirement).

     • Group respective rating agreement - due to L&I no later than March 15th (new and existing group requirement).

     Example: For the coverage period April 1, 2003, through March 31, 2004, all documents listed that are due March 15th are due March 15, 2003.

     • Membership verification list - due to L&I no later than March 15th (new group requirement).

     • Application for group membership and release of insurance data - due to L&I no later than March 15th (new and existing group requirement).

     • Annual safety report - due to L&I no later than March 31st (new and existing group requirement).

     Example: For the coverage period April 1, 2003, through March 31, 2004, the annual safety report would be due March 31, 2003.

     Coverage period - July 1 through June 30

     Individual employer option

     • Individual retrospective rating plan agreement - due to L&I no later than June 15th.

     Example: For the coverage period July 1, 2003, through June 30, 2004, the agreement would be due June 15, 2003.

     Retro group

     • Articles of incorporation, bylaws and marketing information - due to L&I no later than April 30th (new group requirement).

     Example: For the coverage period July 1, 2003, through June 30, 2004, all documents listed that are due April 30th would be due April 30, 2003.

     • Workplace safety and accident prevention plan - due to L&I no later than April 30th (new group requirement).

     • Application for group - due to L&I no later than April 30th (new group requirement).

Note:

This requirement also applies to an existing group when making changes to current plan, MPR or coverage period.

     • Cover letter that lists attached documents - due to L&I no later than April 30th (new group requirement).

     • Group respective rating agreement - due to L&I no later than June 15th (new and existing group requirement).

     Example: For the coverage period July 1, 2003, through June 30, 2004, all documents listed that are due June 15th are due June 15, 2003.

     • Membership verification list - due to L&I no later than June 15th (new group requirement).

     • Application for group membership and release of insurance data - due to L&I no later than June 15th (new and existing group requirement).

     • Annual safety report - due to L&I no later than June 30th (new and existing group requirement).

     Example: For the coverage period July 1, 2003, through June 30, 2004, the annual safety report would be due June 30, 2003.

     Coverage period - October 1 through September 30

     Individual employer option

     • Individual retrospective rating plan agreement - due to L&I no later than September 15th.

     Example: For the coverage period October 1, 2003, through September 30, 2004, the agreement would be due September 15, 2003.

     Retro group

     • Articles of incorporation, bylaws and marketing information - due to L&I no later than July 31st of the previous year (new group requirement).

     Example: For the coverage period October 1, 2003, through September 30, 2004, all documents listed that are due July 31st would be due July 31, 2003.

     • Workplace safety and accident prevention plan - due to L&I no later than July 31st of the previous year (new group requirement).

     • Application for group - due to L&I no later than July 31st of the previous year (new group requirement).

Note:

This requirement also applies to an existing group when making changes to current plan, MPR or coverage period.

     • Cover letter that lists attached documents - due to L&I no later than July 31st of the previous year (new group requirement).

     • Group respective rating agreement - due to L&I no later than September 15th (new and existing group requirement).

     Example: For the coverage period October 1, 2003, through September 30, 2004, all documents listed that are due September 15th are due September 15, 2003.

     • Membership verification list - due to L&I no later than September 15th (new group requirement).

     • Application for group membership and release of insurance data - due to L&I no later than September 15th (new and existing group requirement).

     • Annual safety report - due to L&I no later than September 30th (new and existing group requirement).

     Example: For the coverage period October 1, 2003, through September 30, 2004, the annual safety report would be due September 30, 2003.

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     Your responsibility:

     If you want to discontinue participating in retrospective rating:

     You must:

     • Provide L&I written notification of withdrawal.

Note:

This notification must be received at our Tumwater office by the close of business (5:00 p.m. Pacific time) the day before the new coverage period begins. If the due date falls on a weekend or holiday the signed letter is due on the next business day. You can only withdraw from retro prior to the beginning of a new coverage period. You cannot withdraw from retro during a coverage period except as provided in WAC 296-17-90405 "sale or closure of business," WAC 296-17-90402 "date of enrollment or reenrollment" for staggered enrollment requirements and WAC 296-17-90414.

     Our responsibility:

     Upon receipt of your notification to withdraw from retro:

     We will:

     • Notify you in writing when your participation in retro will end.

Note:

This same procedure applies to an organization that sponsors a retro group. The sponsoring organization must notify L&I of members they wish to remove from the retro group.

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     (6) Department determinations applicable to the retrospective rating program are subject to review under RCW 51.52.060.)) Our responsibility:

     • Nine months after the coverage period has ended, we will do an initial valuation of the losses for each employer and group participating in retrospective rating.

Note:

Effective with the October 1, 2000, coverage period and all subsequent coverage periods thereafter, each retrospective rating plan has three mandatory valuations and no optional valuations. The first valuation takes place roughly nine months from the last day of the coverage period. Each subsequent valuation will occur at twelve-month intervals from the initial evaluation date.

     Example: Assume that your coverage period began July 1, 2001, and ended June 30, 2002 (twelve calendar months). Our first valuation date would occur the end of March 2003. This is roughly nine months from the last day of the coverage period.

     • On the valuation date, all claims with injury dates that fall within the coverage period are valuated and the incurred losses that have been established for these claims are "captured" or "frozen."

Note:

Our valuation is limited to the open or closed status of a claim on the evaluation date. We do not consider adjudicative decisions (i.e., claim allowance, case reserve, wage determination and dependent status) surrounding a claim in our valuation.

     • During the adjustment process we convert the captured incurred loss of each claim into developed losses using the appropriate loss development and performance adjustment factors. Retrospective premium is then calculated using the applicable formulas and tables in the retrospective rating manual.

     • Prior to the application of the performance adjustment factor, we will cap the loss value for any one claim or group of claims arising from a single accident that has collective developed losses in excess of five hundred thousand dollars at a maximum of five hundred thousand dollars.

     • Since the standard premium used in the retro calculation is based on premiums reported but not necessarily paid, we will deduct from the standard premium calculation any unpaid member premiums.

Note:

A sponsoring organization and L&I can enter into an agreement for an alternate debt recovery method.

     • Approximately twenty days after the valuation date, if entitled, we will send you your premium refund.

Note:

If you participate in an individual plan or retro group, we will not issue a refund check if it is less than ten dollars. If a refund is less than ten dollars, we will credit the amount to your industrial insurance account and you can deduct the amount from your next premium payment. All retro group refunds are paid directly to the sponsoring organization. It is the responsibility of the sponsoring organization to distribute any refund to the group members. L&I does not regulate how refunds are distributed to group members. Employers that participate in retro are not required to share any of their retro refund with employees nor can they charge employees in the event of an additional assessment.

     • We will send you a bill if you owe us additional premium.

Note:

If you owe additional premium, it is due thirty days after we communicate the decision to you. We will charge penalties on any additional premium not paid when it is due (RCW 51.48.210). If you (employer in an individual plan or sponsoring organization of a retro group) are entitled to a refund for one coverage period and owe additional premiums for another coverage period, we will deduct the additional premiums due L&I from the refund. We will refund the difference to you. In the event that this adjustment still leaves a premium balance due, we will send you a bill for the balance. If an organization sponsors multiple retro groups and one group earns a refund and the other owes additional premium from a retro adjustment, we will deduct the additional premium from the refund due and issue a net refund to the organization for the difference or bill them for the remaining additional premium as applicable.

[Statutory Authority: RCW 51.18.010. 00-11-060, § 296-17-90445, filed 5/12/00, effective 7/1/00.]

Retrospective premium = (basic premium ratio x standard premium) + (loss conversion factor x developed losses).

Note:

You can find the basic premium ratios and loss conversion factors in WAC 296-17-90493 through 296-17-90497. Remember to use the preselected plan, maximum premium ratio and standard premium for the coverage period.

     Maximum retrospective premium is calculated using the following formula:

Note:

If the retrospective premium formula produces a value greater than the maximum retrospective premium, the retrospective premium is reduced to the maximum retrospective premium.

     Minimum retrospective premium is calculated using the following formula:

Note:

The MnPR only applies to plans A1, A2, and A3. If the retrospective premium formula produces a value less than the minimum retrospective premium, the retrospective premium is increased to the minimum retrospective premium.

     An employer enrolled in plan A as an individual or an organization sponsoring a group may elect to forego the protection of a maximum premium ratio (MPR).

Note:

To forego the protection of the MPR, the financial conditions of the employer or sponsoring organization must be such that they could qualify as a self-insurer under the department's certification guidelines. The basic premium ratio will be .058 if the employer/group selects and qualifies for an unlimited maximum retrospective premium.

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     (4) Incurred losses determined in subsections (1) through (3) of this section are still subject to development for retrospective premium calculations per the provisions of WAC 296-17-90401 through 296-17-90497.)) Our responsibility:

     If you are audited or your business is reclassified the result of which changes the amount of premium you paid during a coverage period that you participated in retrospective rating:

     We will:

     • Adjust your standard premium to conform to the audit or reclassification results.

     • Use your recomputed standard premium to determine your retrospective premium and modify the audit results to reflect the recomputed standard premium.

Note:

An audit or reclassification of your business can result in a change in refund or assessment.

     • Notify you of the results of our decision to recompute your standard premium and the audit results.

     • Refund the additional premium as applicable or send you a bill for additional premium based on the revised standard premium.

Note:

If you owe additional premium, it is due thirty days after we communicate the decision to you. We will charge penalties on any additional premium not paid when it is due (RCW 51.48.210).

     Your responsibility:

     If you disagree with the revised refund or assessment:

     You must:

     • Protest or appeal the decision.

Note:

Make sure you do this in writing within thirty days of the date we communicate the decision to you. If you fail to do so, our decision is final and binding on you. For any other disputes regarding an action concerning the retro program, you must notify LI that you are disputing our action within sixty days of the time that you receive written notification of such action.

[Statutory Authority: RCW 51.18.010(2). 01-23-058, § 296-17-90447, filed 11/20/01, effective 1/1/02.]

     Your responsibility:

     If you disagree with L&I over an adjudicative or reserving issue:

     You must:

     • File a written protest or appeal within sixty days after you receive the decision you disagree with.

     • File a written protest or appeal as applicable to the retro adjustment order and notice within thirty days after you receive this order. This will preserve your right to a relief if you prevail in your claim protest or appeal.

Note:

We cannot provide relief in the computation of the retrospective premium even if your claim protest or appeal produces relief, unless you have also protested or appealed the retro refund/assessment notice and order.

     • Send your protest to the address indicated in the order that you are protesting or appealing.

Note:

Be sure that you file your protest or appeal within the time frame indicated in the order.

     • Work cooperatively with L&I and the medical caregivers treating your injured employee(s) so that they can recover from the injury and return to work as soon as possible.

     Our responsibility:

     When we receive notification of your written protest or appeal:

     We will:

     • Monitor the protest or appeal for resolution.

     • Recalculate the retrospective premium requirement if the relief you requested is granted and you preserved your rights by protesting the retro order and notice.

     • Notify you in writing of our decision.

     Your responsibility:

     If you disagree with L&I over the open status of a claim:

     You must:

     • Notify us in writing immediately when you discover an open claim that you believe should be closed.

Note:

Every month we will send you a report that details the claims activity related to your individual account if you are in an individual plan. If you discover a claim that you believe should have been closed and is not reflected as such on the report or you believe the information needed to close the claim is available to L&I, you should bring it to our attention immediately. For retro groups we will notify the sponsoring organization that a report is ready to download and the organization can download the report at their leisure. If you discover a claim that you believe should have been closed and is not reflected as such on the report or you believe the information needed to close the claim is available to L&I, you should bring it to our attention immediately. If an employer or sponsoring organization uses a third party administrator, it is the responsibility of the employer or sponsoring organization to forward the reports to the third party administrator. L&I does not distribute retro performance reports to any party other than the employer if an individual plan or organization that sponsors the retro group for group reports.

     • Protest or appeal in writing as applicable and within the time specified in the retro adjustment order and notice the claim status you are in disagreement with to preserve your right to the relief you are seeking.

Note:

Approximately one year after the coverage period has ended, we will notify you of the amount of refund or additional assessment. This notification will be in a legal document referred to as an "order and notice." You should receive an adjustment report that details the status of each claim and their related cost prior to the order and notice.

     • Send your written request for reconsideration to:

          Labor and Industries

          Attention: Retrospective Rating

          P.O. Box 44180

          Olympia, Washington 98504-4180.

     Our responsibility:

     Upon receipt of your request for reconsideration:

     We will:

     • Review the open status of the claims you specified in your inquiry, protest or appeal.

     • Recalculate the retrospective premium requirement if we determine that all of the information necessary to close the claim was in the department's possession at the time of the valuation date.

     • Notify you in writing of our decision.

     • Provide you instructions on how to request reconsideration or appeal our decision.

     • Refund the additional premium or reduce the assessment as applicable.

     Your responsibility:

     If you disagree with L&I's decision:

     You must:

     • Protest or appeal the assessment in writing within the time specified in the retro adjustment order and notice.

     • Pay the amount in dispute, or provide a surety bond or an assignment of savings in lieu of the payment pending the outcome of the disagreement and by the due date indicated in the order.

Note:

You cannot participate in the retrospective rating program unless you pay the assessment, provide a surety bond or assignment of savings. If you have paid the amount covered by the disagreement and it is resolved in your favor, we will refund this money. We will not pay interest on this money. If you owe additional premium, it is due thirty days after we communicate the decision to you. We will charge penalties on any additional premium not paid when it is due (RCW 51.48.210).

     • Send your written protest or appeal to:

          Labor and Industries

          Attention: Retrospective Rating

          P.O. Box 44180

          Olympia, Washington 98504-4180.

     Our responsibility:

     Upon receipt of your protest:

     We will:

     • Review the issues outlined in your protest or appeal.

     • Notify you in writing of our decision.

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     (7) Department determinations applicable to the retrospective rating program are subject to review under RCW 51.52.060.)) Payment of medical services on behalf of state fund insured employers is the sole responsibility of labor and industries. Employers insured by the state fund are prohibited from paying a medical service provider directly for treatment of any work-related injury or illness sustained by one or more of their workers.

     Our responsibility:

     If we discover that you have paid a medical service provider directly for medical services related to an industrial injury or work related illness:

     We will:

     • Remove you from the retrospective rating program effective the date of our notification to you.

Note:

Any employer that has been removed because of this practice will be barred from ever participating in the retro program. If the employer was entitled to a retro refund for any coverage period, it will be forfeited. If an organization that sponsors a retro group participates in this activity or encourages members to pay a medical service provider directly for a work related injury or illness sustained by one or more of their workers, the organization will be barred from ever sponsoring a retro group and will forfeit all retro group refunds not yet distributed by L&I.

[Statutory Authority: RCW 51.18.010. 00-11-060, § 296-17-90484, filed 5/12/00, effective 7/1/00.]

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Note:

A sponsoring organization cannot require a participating group member to reenroll in the group's future coverage period as a condition for receiving a refund in a past coverage period.

[Statutory Authority: RCW 51.18.010. 00-11-060, § 296-17-90490, filed 5/12/00, effective 7/1/00.]

     The following sections of the Washington Administrative Code are repealed:

WAC 296-17-90403	Can you give me an overview of the retrospective rating program?
WAC 296-17-90406	I understand that there are specific requirements that an employer must meet before they can participate in either individual or group retrospective rating.
WAC 296-17-90408	Can all organizations sponsor a retro group?
WAC 296-17-90412	Are there safety, accident prevention and claim cooperation requirements that an organization must satisfy once the preliminary requirements have been met?
WAC 296-17-90415	Can an organization lose the right to sponsor a retrospective rating group if workplace safety for their members is not improved?
WAC 296-17-90418	I have several businesses that report and pay premiums using separate subaccounts.
WAC 296-17-90424	Does the homogeneity requirement applicable to a group mean that members of the group have to report in the same risk classification?
WAC 296-17-90427	Can you tell me how the authorized classifications for a retrospective rating group plan are determined?
WAC 296-17-90430	After a retrospective rating group plan has been authorized a classification or classifications, can an organization be allowed additional classifications at a later date?
WAC 296-17-90433	Does sponsoring organization have to reapply each year for authorized classifications applicable to their retrospective rating group?
WAC 296-17-90434	Can an organization sponsor more than one retro group?
WAC 296-17-90436	We have been approved to sponsor a retrospective rating group.
WAC 296-17-90439	Does each member of the group have to complete an application?
WAC 296-17-90442	Is there an application process to enroll in an individual retrospective rating plan?
WAC 296-17-90448	Is there a maximum loss value for each claim?
WAC 296-17-90451	If I disagree with the open status of a claim and ask, will you review the status?
WAC 296-17-90463	If I am successful in reducing my workers' compensation insurance costs, and you inform me that I am entitled to a refund, when will I get the refund?
WAC 296-17-90466	Do you establish how the refund is to be distributed to members of a group?
WAC 296-17-90469	If a group is subject to an additional assessment, does the department bill each member of the group for their share?
WAC 296-17-90472	If a group or individually enrolled employer owes money related to a retrospective rating adjustment, when is it due?
WAC 296-17-90475	If I am in a dispute with the department over an assessment, claim cost or moneys alleged to be owed to the department, can I participate in the retrospective rating program?
WAC 296-17-90478	Are employers required to share retrospective rating refunds with their workers?
WAC 296-17-90481	If a member of a group changes their legal structure or sells their business does the new entity or owner automatically become a member of the group?
WAC 296-17-90491	How is retrospective premium calculated?

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