Tag Archives: RETRO program

Coronavirus

DLI News: COVID-19 FAQs from Employers

The Department of Labor & Industries (DLI) has responded to COVID-19 FAQs from employers. In a news statement, below, DLI outlines policy decisions made to provide direction and relief for state fund employers under the workers’ compensation system.

The referenced COVID-19 FAQs are, primarily, related to employers who participate in the Retrospective Rating, or RETRO, program. This is a complex system based on a simple premise. Retro employers pay premiums into the workers’ compensation fund each year, but are then audited to determine actual claim costs. If their costs are higher than premiums paid, then an additional payment for the difference must be made. Or, if the claim costs are lower than the premiums paid, they receive a refund of a portion of their premium payments.

This program is intended to incentivize safer workplaces. The claim costs from allowed Coronavirus cases could prove quite harmful to many employers. The policy updates from DLI address this concern.

DLI Notice of COVID-19 Policy Decisions

In response to questions from employers and their representatives, the Department of Labor & Industries has made certain policy decisions to provide some financial relief to state fund employers from the impact of allowed COVID-19 claims. These decisions are outlined in the “Frequently Asked Questions” (FAQ) below. We also want you to be aware of premium reporting requirements under certain circumstances such as when a business has been closed as a result of the pandemic, yet the employer is continuing to pay their workers. And we’ve clarified that injured workers whose temporary light duty ends are entitled to time-loss compensation. If you have any questions please contact your account manager or retrospective rating representative.

Common COVID-19 FAQs from Employers

Will coronavirus (COVID-19) claims impact an employer’s experience modification factor and claim-free discount (if applicable)?

No. All losses for allowed coronavirus claims, regardless of whether the virus is contracted, will not be included in the determination of an employer’s experience modification factor. An employer will not lose their claim free discount as a result of an allowed coronavirus claim.

What will the impact to retrospective rating calculations be for losses from coronavirus claims?

It’s important that the claims included in experience factor calculation, retrospective rating adjustments, and for rating purposes align. Therefore, the losses for allowed coronavirus claims will not be included in the retro adjustment calculations.

If an employer has a worker on temporary light duty and their business is closed due to the pandemic, is the worker eligible for time-loss benefits? Will these losses be included in the employer’s experience factor?

The worker is eligible for time-loss benefits unless the employer chooses to keep them on salary. The law is clear in situations where temporary or transitional light-duty work comes to an end, regardless of the reason it’s ending. The law recognizes that these workers are restricted from being able to perform their regular employment or jobs, other than the light-duty one.

Only losses for allowed coronavirus claims are being removed from the experience factor calculations.

Does an employer need to report hours when their business is closed during the pandemic, or when a worker is continuing to be paid or kept on salary but notactually working?

If an employer continues to pay a worker while their business is closed during a coronavirus quarantine, or to maintain the worker’s salary on an open claim, if the worker is not actually working the hours don’t need to be reported.

  • If you have hourly workers who are continuing to be paid and not working as a result of the pandemic, you are not required to report hours and premium for the time they are not working.
  • If you have salaried workers reporting actual hours worked (hourly method), continue to do so.
  • If you have salaried workers and report 480 hours per quarter (salary method), you may report the actual hours they worked.

Note: regardless of how you report, you are required to keep a record of these non-work hours in your payroll system. Please refer to WAC 296-17-35201 for recordkeeping and retention.

Contact Information for RETRO Employers

If you have further questions regarding reporting, contact your account manager at 360-902-4817.

Retrospective Rating Program 
WA State Department of Labor & Industries 
PO Box 44180 
Olympia, Washington US  98504-4180 
Retro@Lni.wa.gov  
360-902-4851  voice 
360-902-4258  fax 

Prior Posts on Related Topics
Legislation, Workers' Compensation Reform, Workplace Accidents

The RETRO Program Is More Dangerous Than It Looks

Should Washington workers be happy about the RETRO program?

In a post from last week we introduced the history of the Workers’ Compensation System and asked the question: Should taxpayer money continue to be used to support the government system that allows these cases to be brought?

A growing number of employers in Washington State are taking part in the RETRO Program, a system within the system, designed with the good intention of incentivizing safer workplaces. Employers that participate in this program pay into the system according to the risk classes of their employees, as usual, but the actual costs of their claims are tracked and compared to the amount of the premiums paid. When the amount paid in claim costs exceeds the premiums paid, the employer is assessed an extra fee. If the claim costs are less than the premiums paid, a refund of the difference is returned to the employer. On the face of it, this seems reasonable, unless we look back to my bridge analogy from last week’s post:

When a bridge is needed in Seattle, those in Yakima don’t want to pay for it, even though our entire highway system supports tourism and commerce throughout the state. So, we have an insufficient tolling system in place based on the concept that only those citizens that drive on the bridge should have to pay for it.

The burden of injury and disability claims is greater on an individual employer than if the responsibility for the costs is shared.

Instead of incentivizing a safe work place we are now incentivizing denials of claims, denial of authorization for medical procedures such as MRI scans, and strict limitations on conservative care such as physical therapy. This creates a dynamic where Claims Managers at the Department of Labor and Industries are pinned between the interests of injured workers seeking benefits and employers counting pennies.

Caught in the middle of the storm, the easy decision for a Claims Manager is to deny benefits and let the issues be sorted out through the appeals process. This leads to delays in treatment, financial hardship and unfair costs to the injured worker, who remains responsible for the cost of attorney fees in litigation, whether they win or lose, when the employers have the ability to deduct the cost of legal fees as a business expense no matter the outcome. The practical effect of this increasing determination to cut every possible cost is that small issues are now routinely raised before the Board of Industrial Insurance Appeals.

We are involved in cases before the Board where the fight is over a few hundred dollars of compensation, or authorization for a procedure or surgery. Do we really want an industrial appeals judge to decide whether a procedure is reasonable and necessary treatment? Especially when there are utilization review processes already in place to monitor the use of those resources and Claims Managers hired to administer the claims, asking workers to bear the burden of an appeal process to get their MRI scan or to keep $300 in time loss compensation paid during the few days between the doctor mailing a release to work to the Department and the Claims Manager reading the note, often when the worker had not been notified of their release, is unreasonable and it is certainly a waste of resources.

More is spent fighting each claim than would be expended simply providing the worker with the benefit. But, providing the benefit comes out of the “claims cost” column, reducing the possible rebate amount, instead of under the “legal fees” tax deduction column.

Another effect of this new dynamic is that physicians are fleeing workers’ compensation claims like rats from the sinking ship. Doctors and clinics that are already working under the administrative burden of a plethora of insurance systems – – federal, state and corporate-run – – all with differing requirements and payment schedules, now find their every recommendation questioned and scrutinized, with payment delayed or denied. If an appeal process is followed, the doctors are asked to take time out of their packed schedules to write reports or testify at hearing or by deposition to justify their opinions, actions and recommendations. Patients have limited access to care or become frustrated when their doctors refuse to participate in the processing of their claims.

For more on the RETRO program, check in for part 3 of this series later this week.