For Washington State Employers
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Jordan Stair and Paul Vlcek, Account Executives with The Partners Group Commercial Insurance Division, provide four options for purchasing workers’ compensation for Washington employers. They focus on group retro, which can be a cost-saving opportunity for employers in Washington State.
Washington is a Monopolistic State
Washington State is unique as it is one of the few monopolistic states still remaining throughout the country, meaning the state itself is the only provider of workers’ compensation coverage. Stair stated “oftentimes employers feel they have limited available options, when in fact that cannot be further from the truth.”
Four Options for Purchasing Workers’ Comp in Washington
Option 1: Buy directly from L&I – Labor & Industries
- Employers buying directly from L&I is the most common.
Option 2: Group Retro
- “Retrospective Rating (Retro) is a safety incentive program offered by L&I. In Retro you can earn a partial refund of your workers’ compensation premiums if you reduce workplace injuries and lower associated claim costs. Any employer with an industrial insurance account in good standing can participate,” as stated on the Washington State Department of Labor & Industries website.
- According to Vlcek, “group retros are the most cost-saving opportunity at that level, which is why it is the focus of this article.”
Option 3: Individual Retro
Option 4: Self-Insurance
- Depending on the size of the company, self insurance could be an option if the company qualifies.
With group retros, most employers participate based on the association they’re in, when in fact they probably could qualify for anywhere from 5 to 15 different retro groups.
Every retro group has a significant difference in both cost and resources. These factors can include:
- What’s the overall risk factor of that retro group?
- What’s the overall group’s profitability?
- What’s the size of the group you’re participating in?
- What are the administration and membership dues?
All these things play a factor in the premiums you’re paying on an annual basis. What we’ve seen is that through the proper feasibility analysis, employers could actually reduce costs up to 40% by being placed in the appropriate group. Also, admin cost can be in addition to the membership fees on an annual basis.
Your retro group provider can be a great resource for providing advice on how to handle a claim that involves lost time. A lost time claim is a claim that can be made under a workers’ compensation insurance policy when a covered employee remains absent from work for more than eight working days due to a serious occupational disease or work related injury. A lost time claim has a factor of almost five times higher than what is actually paid out, versus a medical-only claim which has a factor of about 1.5. If you can stay away from those paid time losses or handle those out of pocket costs, you can potentially save a lot of money in the long run.
What’s the takeaway today?
- Your broker needs to play a role in helping you evaluate your workers’ compensation program on an annual basis. Contact your broker today, or the Commercial Insurance division at The Partners Group for your evaluation.
- Consider all of the options available in the State of Washington and discuss further with your broker to decide which is best for the company. There are options you may not be aware of that can have a significant impact on your overall cost.
About the Presenters:
Jordan Stair and Paul Vlcek are both Account Executives with The Partners Group Commercial Insurance Division.