February 28, 2020 Legislative Update

Today is the 47th day of our 60-day legislative session. It marks another important “cutoff” deadline, by which policy-related bills like workers’ compensation must be voted out of committee to continue moving. Legislative activity for the next 13 days will be frenetic as lawmakers work to pass a supplemental operating budget for the state and resolve the many policy issues still out there. Here are our top concerns remaining:


As all Washington certificate holders and TPA contacts were alerted yesterday, self-insurers have come in for a specific and direct attack now with the latest amendments to SHB 2409. The bill continues to more than triple existing statutory penalties on all employers, and continues to sneak in trojan horse provisions like a ‘per occurrence’ multiplier on self-insured benefit delay penalties. However, the bill was amended in the Senate Labor & Commerce Committee Thursday to specifically target the bill’s “Insurance Fair Conduct” provisions only to self-insurers and their representatives. Further, the amendment would require licensure of all self-insured TPAs and certification of all self-insured claims handlers, whether self-administered personnel or TPAs, and whether in-state or out-of-state.

While penalties are fortunately relatively uncommon, we believe this bill, paired with the innate complexity of Washington’s system, creates massive new liability exposure for self-insurers, TPAs, potentially defense counsel, vocational and investigative firms, and more. Further, the bill incentivizes more penalty requests, and the Department fiscal analysis assumes more penalties will be levied under the bill. We are working hard with a unified, allied employer community to either defeat or significantly change the bill in the Senate over the next week (it faces a March 6 deadline for a Senate floor vote). This is an uphill battle as the bill’s proponents – claimants’ lawyers and union lobbyists – enjoy a very favorable political majority in the Legislature. But we have several active strategies going and I would encourage anyone who hasn’t already taken action on the bill to contact me for information on either how to communicate with lawmakers or where to refer the company’s government affairs assets on the issue.  


SSB 6440, the IME bill that started life as a vast overhaul of the IME statutes with elaborate regulations and restrictions on employers, the Department, and IME providers, and was eventually mostly amended down to an interim working group, continues to move. It was voted out of the House Labor Committee with a further amendment that clarifies only the Department issues “no-show” fees, and provides further guidance to the Department to determine the use of telemedicine in IMEs and accommodation of individuals if there is no examiner in their reasonably convenient travel area. If the committee amendment is adopted by the full House, the bill will take another trip through the Senate for concurrence or negotiation. I authored an op-ed in today’s Spokane Spokesman-Review along with IME examiner Dr. Craig Smith in support of the amended form of this bill continuing to move.


Movement, if any, on the issue of Washington self-insurers’ use of captives is slow and behind-the-scenes. The issue continues to be stalemated between the corporate community and the Office of Insurance Commissioner over the territorial nature of covered risk that should be subject to a 2 percent premium tax – whether Washington only, or nationwide risk coverage. From all appearances, legislative leadership considers the bill exempt from further cutoff deadlines as necessary to implement the state budget, but it remains to be seen in the next two weeks whether this logjam can be broken. The Seattle Times opined on the matter earlier this week.    

The priority work right now is on the penalties bill. Please contact me with any questions, concerns, or how to get involved on the latest action on this issue.

An updated bill tracking sheet is attached, summarizing the foregoing in the context of the other bills we’ve seen this session and their outcome to date.