Workers' compensation insurance is a must-have for most employers in Washington

Why is workers’ compensation insurance important?

In a nutshell, workers’ compensation insurance is designed to protect both employers and their employees. For employees, workers’ compensation shields them from expensive medical care and rehabilitation expenses should they be injured on the job. But workers’ compensation insurance also protects employers from costly litigation and penalties.

Now that we know why having workers’ compensation coverage is beneficial to both businesses and employees, let’s talk about who needs to have a policy in place.

Which Washington State employers are required to have workers’ compensation coverage?

Any Washington business with at least one (1) employee is legally required to carry workers’ compensation insurance, even if the sole employee is part time. This includes real estate brokers, volunteers that receive any monetary value in exchange for work, remote workers, and even gig workers may be subject to coverage in Washington.

Are there any exceptions?

There are some types of businesses that are exempt from providing workers’ compensation coverage, although coverage can still be applied for voluntarily.

Now that we’ve explained which employers need to have coverage, let’s look at what a policy typically provides if an employee has a work-related incident.

What does workers’ compensation insurance cover?

Washington workers’ compensation insurance covers medical and related expenses for any employee injured while at work. Let’s take a look at some of the benefits offered.

Medical benefits

Medical benefits include emergency treatment as well as any follow-up treatment necessary. Medical benefits can also include prescription medication, travel expenses related to treatment, and any nursing services or devices needed.

Wage replacement

Wage replacement is available for employees who are unable to return to work. Wage replacement covers between 60 to 75% of the wages previously earned, with a three day waiting period after the initial injury. If an employee is still off work after 14 days, they are eligible to receive payment for the waiting period.

Permanent partial disability

Injured employees may be eligible for a permanent partial disability (PPD) award if they are still able to work but have suffered a permanent loss of function. All wage replacement and medical benefits end immediately after a worker receives their award.

Permanent total disability

If an injured worker is certified permanently and totally disabled, they are eligible for a monthly pension with the amount based on the type of injury received. A pension is also available for the immediate survivor of a deceased employee due to an on-the-job accident.

Vocational training

For injured employees that qualify, vocational training is available, with the option to follow a Labor & Industries (L&I) plan or create your own plan. Resources available include schools and training programs and the use of Washington’s Career Bridge. If an employee chooses to create their own vocational plan, the employee is eligible for a vocational award and training funds to use for a training program.

Survivor benefits

A surviving spouse or dependent of an employee who dies as a result of a workplace accident or occupational illness is eligible for a monthly survivor pension. In addition to a pension, burial benefits including funeral expenses are covered as well.

How can employers obtain workers’ compensation coverage?

Washington uses a monopolistic state fund, with all workers’ compensation insurance purchased from Washington State L&l, and all employers guaranteed coverage regardless of the employer’s industry or risk. There is no option for purchasing workers’ compensation through a private insurance company.

Anyone wishing to purchase workers’ compensation insurance must first set up an account with the state. Once that’s complete, you are assigned a case manager who will set up your policy and advise you of the policy rate and provide you with certification of coverage as well as workplace posters.

Employers do have the option to become self-insured if they can meet certain criteria set by the Washington State Legislature, including:

• Has been in business for at least three years prior to application
• Has a written accident prevention program in place at least six months prior to applying to become self-insured
• Has a net-worth of twenty five million dollars or revenue of fifty million dollars

There are other requirements as well to qualify for self-insurance certification.

What are the penalties for not having the proper coverage?

For employers who fail to carry the proper workers’ compensation coverage, they may be liable for a penalty up to $250 per day for each day that the appropriate coverage is not in place, with a maximum penalty of $50,000. More information on penalties is available from Washington’s state legislature.

What happens when an employee is injured on the job?

Any employee injured on the job should seek medical care immediately from the closest facility. At the time of the visit, the employee should inform the medical provider that they were injured on the job.  Workers are required to file a claim with L&I. If working for a self-insured business, the employee’s claim will need to be filed with their employer.

Once notification of the worker’s claim is received, the employer must file the Employer’s Report of Accident, which provides additional information to L&I regarding employee wage details, the last date the employee worked, and where the accident or injury happened.

Washington’s statute of limitations for filing a claim is one year from the date of injury. If the employee suffers from an occupational disease as a result of their work, the statute of limitations is two years from the day the disease was first diagnosed.

Can employees use their own physicians?

When initially injured, an employee can choose to seek medical care at the nearest treatment center. If additional medical care is necessary, the employee is required to use a medical provider in the L&I network. Any doctor can be chosen, even the injured worker’s personal physician as long as they are in the network. Second opinions are permitted and employees can change providers at any time, but must first seek approval.

More resources for Washington State employers

For more information, employers can contact the Washington State Department of Labor & Industries at 360-902-4817. Additional resources are available below.

• Employers’ Guide to Workers’ Compensation Insurance in Washington State
• How to get a workers’ compensation account
• Injured worker? What you need to know
• L&I Sign up