Washington Administrative Code › Title 296 - Labor and Industries, Department of › Chapter 296-15 - Workers' compensation self-insurance rules and regulations › Section 296-15-225 - Self-insurance second injury fund assessment

Current through Register Vol. 24-14, July 15, 2024
(1) The second injury fund assessment is
			 based on anticipated second injury fund costs. The fund is used to relieve
			 employers' costs related to pensions that result from the combined effects of
			 the industrial injury and another prior injury, preferred worker claims, and
			 job modifications. The second injury fund assessment is experience rated based
			 on a self-insurer's actual usage of the second injury fund in the previous
			 three fiscal years. See
			 RCW
			  51.44.040 for more information about
			 experience rating. The department may estimate claims cost data when actual
			 data from an employer has yet to be provided.
The department determines a self-insurer's second injury fund
				assessment rate annually for each fiscal year. The assessment is paid by active
				and inactive self-insurers quarterly at the same time a self-insurer submits
				its quarterly report.
(2)
			 Self-insurers' relief from and contributions to the second injury fund will be
			 recorded in an account separate from the state fund account. The self-insurers'
			 second injury fund must maintain a two hundred thousand dollar minimum
			 balance.
(3) The department uses
			 the following process to determine the second injury fund assessment.
Definitions:
"A" = Individual self-insurer's total second injury fund costs
				(usage) for the previous three fiscal years.
"B" = All self-insurer's total second injury costs (usage) for
				the previous three fiscal years.
"C" = Individual self-insurer's claim costs for the previous
				three fiscal years.
"D" = Total self-insured claim costs for the previous three
				fiscal years.
"E" = Individual self-insurer's experience factor.
"F" = Individual self-insurer's claim costs for the previous
				fiscal year.
"G" = Total self-insured claim costs for the previous fiscal
				year.
(a) The department calculates
			 the
preliminary base rate
necessary to ensure collection of
			 adequate funds. The preliminary base rate is the estimated usage of the second
			 injury costs for the coming fiscal year divided by the total estimated claims
			 costs. The preliminary base rate is assessed to self-insurers certified after
			 the fiscal year used for calculation.
(b) The department calculates the
preliminary
adjusted rate
, by adjusting the
			 preliminary base rate for over or under collections from prior periods. This
			 rate is assessed to any self-insurer certified during or prior to the fiscal
			 year used for calculation, and to any self-insurer who has voluntarily
			 surrendered its self-insurance certificate.
(c) The department determines an
experience factor
for each self-insurer.
(i) The department calculates the
			 self-insurer's
second injury fund usage share
by dividing the
			 self-insurer's total second injury fund costs (usage) for the previous three
			 fiscal years by the total second injury fund costs (usage) for all
			 self-insurers in the previous three fiscal years.
Second injury fund usage share = A/B
(ii) The department calculates the
			 self-insurer's
claims cost usage share
by dividing a
			 self-insurer's claim costs over the previous three fiscal years by the total
			 claim costs for all self-insurers in the previous three fiscal years.
Claims cost usage share = C/D
(iii) The department calculates the
			 self-insurer's
experience factor
by adding the second injury fund
			 usage share to the claim cost usage share and dividing by 2, then dividing this
			 total by the claims cost usage share.
Self-insurer's experience factor (E) = [((A/B) + (C/D))/2] /
				(C/D)