February 7, 2020 Legislative Update

Today marks the end of the fourth week of Washington’s 2020 legislative session, and an important deadline for non-fiscal bills to have received a vote in their policy committee in order to be considered alive for further consideration. This “policy cutoff” leads very quickly to next Tuesday’s “fiscal cutoff,” where bills with fiscal impact will have to be voted out of the chambers’ fiscal committees. We are in turn headed quickly toward the chamber of origin cutoff on February 19th, where bills will have to have passed out of the House or Senate in order to remain alive.

Today’s cutoff brings mostly bad news in the arena of workers’ compensation. A trio of terrible bills were passed out of committee, each adorned with a partisan amendment that did little to stem the overall impact of the policy. Specifically:

SHB 2409, Penalties, “Fair Conduct,” and Self-Insured TPA regulation

The House Labor Committee voted out SHB 2409 yesterday as amended. The amendment appears to:

  • Caps the self-insurance benefit delay/denial penalty at an increased rate of $1,700 per occurrence
  • Replace the original fiduciary duty of good faith and fair dealing with a “responsibility of fair conduct relating to all aspects of a claim”:
    • Broadens the responsibility to all employer representatives,
    • Requires the Department to define by rule the process for determining and penalizing violations of this responsibility, and
    • Expands the Department’s adjudication period from 30 to 90 days.
  • The amendment leaves unchanged the original provision that all individuals handling self-insured claims must be licensed according to rules promulgated by the Department.

The preliminary fiscal note cites increased costs due to litigation, rulemaking, and staffing needs called for by the bill’s various provisions, ranging from $1.5 to $1.7M each of the next three biennia.

SSB 6440, IME Limitations, Regulations, and Working Group

Likewise, SSB 6440 was voted out of the Senate Labor Committee this morning. The amendment removes the limitation on IMEs to a new condition; removes the numerical limitations on exams; modifies the requirement to delay examination so worker may consider a specialist consultation; gives an examiner right to object to recording of exam; and authorizes telemedicine if exam is not in place reasonably convenient to worker.

However, the amendment:

  • Continues the uncertainty around “new medical issues”
  • Continues to allow workers to skip out on IMEs without a no-show fee
  • Continues to require IME report to the AP and injured worker
  • Continues to allow for delay while AP and worker consider a specialist consult
  • Requires Department and self-insurer to “consider the total number of examinations per claims so that they are limited”
  • Imposes new rescheduling delay if examiner does not consent to audio/video recording of exam
  • Appears that Self-insurers still must send written request to the Department for scheduling of IMEs
  • Continues the 100 mile requirement for testimony
  • Continues the new recordkeeping requirements on examiners
  • Convenes a summer working group of legislators and stakeholders to consider further changes to the IME statutes/process and report back by December.

The bill carries a hefty fiscal note of over $2M per biennium to implement, owing to new staffing and IT requirements and “increase[d] disability and claim costs, including additional pensions, for L&I due to additional delays and limitations created by the new processes this bill requires.”

SSB 6552, Waiting Period for Time Loss

Finally, SSB 6552 was voted out of the Senate Labor Committee on Monday and is in the Rules Committee. Originally, it eliminated the three day waiting period from date of injury for receipt of time loss. As amended, it retains the 3-day waiting period but reduces the retroactive period (duration of time a worker must be disabled to waive the waiting period) from 14 days to 7 days.

This will simply cost more for everyone because it will result in more short duration time loss claims.

Waiting periods and retroactive periods are common in workers’ compensation; all 50 states have them. Washington is lenient already with a 3 day waiting/14 day retroactive setup, which conforms to both the Federal Employees' Compensation Act and Longshore and Harbor Workers Compensation Act and twenty-five other states. Indeed, eight states are at 21 days, two are at 28 days, two are even at 42 days. No jurisdiction is less than 14 days. 

Other cutoff news:

Two WSIA-backed measures proved too controversial to move from the Senate Labor Committee. SB 6373, authorizing self-insured allowance orders, could have moved but only with an onerous amendment limiting employers’ ability to specify allowed conditions on the order. SB 6372, expanding structured settlement access pursuant to the recommendations of the Upjohn Institute’s latest report, did not receive a vote.

Bills requiring mandatory safety training in the construction industry (HB 2564) and limiting employer rights with respect to pre-hire screening of marijuana users (HB 2740) also stalled at cutoff.