A workers’ compensation claim here in Washington State can follow one of two administration paths. The term “state-funded claim” means that the Department of Labor and Industries (L&I) administers the workers’ comp claim. We often refer to such a claim as an L&I claim. Conversely, we refer to a workman’s compensation claim as “self-insured” (or self-insured employer claim) when the managing entity is a third party administrator (TPA). In fact, there are many TPAs out there, including Sedgwick, Corvel, Gallagher Basset, Helmsman, and others. Both work injury claim types follow the same basic rules and have the same available benefits. However, there are some important differences that warrant a deeper discussion.
Differences between L&I claim and self-insured employer claim
The first difference I notice often between the two types of claims is transparency. Here, with a state-funded L&I claim, the claim file documents like orders, notes, letters, reports, and treatment records are accessible online. Anyone (with permission) can log onto Claims and Account Center and browse the records. In general, documents are available as soon as L&I employees scan them into the system. If you are a work injury claimant, you can view documents at the same time they become available to L&I.
The same level of transparency is not available with self-insured employer workers’ compensation claims. With third party administrators, the claim file isn’t available online. A person with a work injury claim can request a copy of the file or any updates from the TPA every 30 days. The TPA has 15 days to send the file or the update. Therefore, there may be cases where work injury claimants are unaware of things that may be happening in their claim file.
If a TPA hires an workers’ compensation attorney or legal representative, some claim file materials may be withheld under attorney-client privilege protections. Hence, this lack of transparency can make it difficult for people with a work injury to follow what’s happening in their claim.
Confusion between the claim administrator and the employer
Some people that suffer an injury on the job find it difficult to distinguish between their employer and the TPA. Surprisingly, I often speak with folks who do not understand that the actions of the TPA aren’t necessarily the actions of their employer. Some work injury folks ask: “Why is my employer fighting my claim so hard, I thought we had a good relationship?”.
In actuality, the employer may have little or no awareness of what the TPA is doing on the workers’ compensation claim. This confusion is less common in a state funded L&I claim because there is a clear distinction between the employer and L&I.
Challenges in self-insured employer workers’ comp claim
In general, there’s a perception that a self-insured employer claim is more challenging than an L&I claim. Personally, I’m not confident that this is entirely true. Yet, self-insured workman’s comp claims indeed have some inherent challenges.
In my opinion, claim challenges arise due to lack of transparency and accountability. Also, increasing attorney involvement in self-insured cases is another contributing factor. With L&I claims, claim administration rarely involves an attorney. However, it’s very common for a TPA to hire a workman’s comp attorney to assist with claim administration. Some attorneys are more aggressive in their representation than others.
The Industrial Insurance Act does not have much legislation holding a TPA accountable for their actions. Albeit, there are some regulations that allow L&I to impose penalties on a TPA for unreasonably delaying benefits. However, in the big scheme of things, these penalties are relatively minor. Additionally, it takes a lot of documentation before L&I actually imposes any penalties. Consequently, it can be a long and difficult process to hold a TPA accountable for workers’ compensation claim administration failures.
Summary and takeaways
In conclusion, workers’ comp claims in Washington’s State can be either state-funded claims or self-insured claims. The claim benefits available to people that were hurt at work are essentially the same. But, the claim administrator overseeing the benefits is different.
Since self-insured workers’ comp claims involve a TPA, they often also involve an attorney. Furthermore, because claim files are not available online, staying on top of the claim progress and actions can be more challenging than with L&I claims.
