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L&I Cost of Living Adjustment (COLA) and the Washington State Accident Fund

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The Department of Labor and Industries (L&I) recently announced the 2020-2021 benefits schedule. Every year, around July, L&I determines if a Cost of Living Adjustment (COLA) applies to workers’ compensation benefits. Sometimes COLAs are not applied. However, this year, there are adjustments to monetary benefits.

Cost of living adjustment under an L&I claim

In short, L&I benefits are going to increase by a little over 6% this year. This is a historically high increase. Last year, the cost of living change of 5.5% was also historically high. COLAs are based on the average annual wage of all workers in Washington State. In order for the increase to be over 6%, average annual wages of employees must also increase in a similar amount. For work injury claimants, this news could not come at a better time. If you would like to review more information about the COLA this year, please refer to the 2020-2021 Benefits Schedule.

However, we must also think ahead considering our current reality. Businesses, workers and employees have been severely impacted by the COVID-19 pandemic. Consequently, unemployment rates are very high. And, many businesses have been forced to close. Some of those closures are temporary. However, many are permanent. This is especially true in certain industries such as hospitality and retail. Both are industries that previously employed many workers. The Corona virus is going to negatively impact our economy for quite some time.

What is the L&I accident fund?

The Department of Labor and Industries administers the Accident Fund. Say that you had a workplace injury. Moreover, say that you are receiving payments and financial benefits under your workers’ compensation claim. Then, it’s important to know that the money is coming from the Accident Fund.

Previously, economic downturns had negative impact on the financial health of the Accident Fund. Specifically, during economic waves in the early and mid-2000s, Washington State businesses experienced L&I rate increases. In other words, employers had to pay higher worker’s injury insurance rates towards the fund. In 2003, the rate increase was an astonishing 28.8%.

Starting in 2007, we saw four straight years of L&I rate increases. Unfortunately, these rate increases were necessary. Businesses received significant rate rebates that left the Accident Fund nearly empty. In fact, there were $200MM in workers compensation rebates for employers in 1999 and 2000, and $315MM in rebates in 2007. It isn’t a coincidence that L&I rates had to increase after those employer rebates.

L&I workplace injury insurance rates in Washington State

The employer rebates depleted the Accident Fund. Therefore, L&I implemented an increase to the work injury insurance rate to repair it. Business and labor stakeholders on the Worker’s Compensation Advisory Committee (WCAC) decided to do something about it. Explicitly, the WCAC established targets to ensure that the reserves in the Washington State Accident Fund will be sufficient to withstand the next recession. Thanks to COVID-19, that next recession is already knocking on our door.

Currently, the Accident Fund is healthy enough to sustain the upcoming recession. Interestingly, recent forecasts estimate that the Washington State government faces $8.8B revenue shortfall through 2023. That kind of shortfall is going to require cuts. Because the Accident fund is healthy, the workers’ compensation system is going to be an easy target for tax cuts. Therefore, now more than ever, it’s important to focus and monitor the financial health of the Accident Fund.

Cost of living adjustment: Viewpoint of a workers’ compensation attorney

Our (currently) healthy workers’ compensation ecosystem provides a critical safety net for working families. That safety net prevents financial ruin when catastrophe strikes. For that reason, we must actively resist the kinds of Accident Fund depletion that we saw in 1999, 2000, and 2007.

As a society, we cannot afford to empty this workers’ compensation insurance fund and hope to save it with rate-increases later. For more information about this issue, please read this recent article. It was written by The Stand, which is a publication for workers in Washington State.

Can L&I Make Me Transfer to Another Doctor For My L&I Claim?

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In a work injury claim or an occupational disease claim, the attending provider (AP) refers to a person that has a license to practice medicine or a similar field. For example, attending physicians can practice general medicine, surgery, osteopathic medicine, or chiropractic medicine. They can also be a naturopathic physician, podiatrist, dentist, or optometrist. Interestingly, the attending provider can be an advanced registered nurse practitioner (ARNP). From an L&I claim standpoint, the attending provider actively treats people after a work injury under their workers’ compensation claim. And, they must be a member of the L&I Medical Provider Network (MPN) and adhere to certain L&I rules.

Can I choose my own doctor for my L&I claim?

Under the Medical Aid Rules of the Industrial Insurance Act, a person with a workers comp claim may freely choose or find their attending provider. Furthermore, WAC 296-20-065 outlines L&I’s policy for transferring to another attending provider. With certain exceptions, there’s no reason for a claim manager to deny the request to transfer to a different physician. However, if L&I denies the request, then they must provide the reason for the denial.

Transferring to another doctor or attending provider

As an attorney representing work injury claimants, I work hard to ensure my clients are happy with their attending provider. That means they can treat with a doctor that they choose and are comfortable with. However, as with everything else, nothing is set in stone. There are times when a work injury claimant must transfer to a different attending provider.

Specifically, WAC 296-20-065 allows the Department of Labor and Industries (L&I) or third-party administrator (TPA) to require an attending provider transfer. Explicitly, there are several situations that require transferring to another doctor:

1) If better physicians are available closer to the injured worker, and travel to the current doctor is impacting worker’s recovery.

2) When the current attending provider fails to follow L&I rules or guidelines.

3) If the work injury claimant is temporarily and totally disabled and is not making reasonable progress towards recovery and return to work.

4) The work injury claimant needs special treatment that the current attending physician is unable to render. Alternatively, the treatment may be outside the scope of the provider’s license to practice.

Important final remarks

To summarize, L&I or a third-party administrator can find that a transfer to another provider is necessary. When they do, if the workplace injury claimant fails to change his or her provider, or delays the process, then L&I may select the provider for them. Therefore, it’s very important for people with a workers’ compensation claim to get a good AP from the start. Make sure you are treating with a provider that has the appropriate qualifications and is easily accessible to you. Remember, that person must follow all the rules concerning your L&I claim. Finally, keep in mind that the job of the provider is to implement treatment plans and help you recover and get to maximum medical improvement.

Medical-Only L&I Claim and Workers’ Compensation Claim in Washington State

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Sometimes claims for workplace injury are called “medical only” claims. Often, work injury claimants do not understand what it means to have this kind of claim. Yet, it’s important to understand the difference between “medical only” workers’ compensation claim versus “compensable claim”. It is important because the type of claim impacts the benefits you might receive. Hence, if your L&I claim has the wrong type, then you might miss out on important benefits.

What is a “medical only” workers’ comp claim?

As the name suggests, when an L&I claim is medical-only, then L&I or the self-insured employer only pays for medical expenses. Therefore, you don’t receive other benefits such as time-loss compensation, loss of earning power, or permanent partial disability. You also can’t get total permanent disability or death benefits. When a workers’ compensation claim pays out these other benefits, it is called “compensable claims”.

From my perspective, “medical only” claims are appropriate when doctors can treat the workplace injury or occupational disease quickly. Practically, this type of L&I claim works when there’s no interruption to your employment or wage-earning ability. For example, a workplace accident claimant who sustains a cut at work may need urgent medical attention. The person is rushed to the hospital to clean and bandage or suture the wound. If all goes well, the injured worker may miss less than a day of work. The injury will heal, and it will have no limiting impact on the worker’s ability to do their job. Under these circumstances, a “medical only” workers’ comp claim is appropriate. The insurance covers the medical expenses for the work injury. From here, there’s no need for other benefits under the claim.

Employer tactics under a workers’ compensation claim

People that suffer an injury at work should know that L&I provides incentives to employers with no claims (or with “medical only” claims). Businesses that prevent workplace injury occurrences earn a “claim-free discount” from L&I. Here, the condition is to not have a “compensable claim” during a 3-year period. Employer discounts range anywhere from 10-40% off the base rate for their business. Consequently, some businesses and employers go to great lengths to ensure zero compensable claims on record.

Some employers reduce compensable workers’ comp claim volumes by increasing workplace safety. Others provide employees with accommodations and flexibility to not interrupt the worker’s employment. I applaud such employers because it’s a win for both the worker and the employer.

Unfortunately, some employers try to limit compensable claims unfairly, to the detriment of the worker. In these cases, employers can argue that injuries are less significant than they are. Another strategy is when the employer creates a job to keep the work injury claimant working, regardless of their medical condition. For example, some people have been paid their regular salary to watch safety videos while recovering from injuries. This isn’t necessarily a bad thing, unless the employer has ulterior motives. For example, when employees have a workers’ compensation claim, some employers work hard to find basis to fire the work-injury claimant for cause. When an employer fires a person with a workers’ comp claim for cause, they are not eligible to receive benefits like time-loss compensation benefits.

Summary and conclusion

To summarize, a medical-only workers’ compensation claim is appropriate after a simple injury at work. Remember, such workplace injury must not have long term impact on your physical abilities or future employment. However, if you suffered a more severe illness or injury, then the Industrial insurance Act (RCW 51) providers other claim benefits. Moreover, these other benefits are important when your work injury has real impact on your functioning and employability.

Workers Compensation - Washington