Workers Compensation in Washington State: Self-Insured vs. L&I

Workers' compensation is crucial to workplace safety in Washington State.

When an employee suffers a work-related injury or illness, the system reimburses them for their medical expenses, lost wages, and other benefits. Employers in Washington can either self-insure their workers' compensation claims or purchase insurance through the Washington State Department of Labor & Industries (L&I).

The workers' compensation attorneys at Lehmbecker Law are well-versed in the nuances of self-insured employer claims versus L&I claims. This article will explore the key differences between the two approaches, helping you make informed decisions about the most suitable option for your specific circumstances.

What’s the Difference Between Self-Insured Employer and L&I Workers' Compensation Claims?

Understanding the distinctions between self-insured employer claims and L&I workers' compensation claims is essential for both employers and employees in Washington State. This knowledge can help both business owners and employees make informed decisions about their workers' comp coverage and manage potential risks effectively.

The following table provides a helpful overview of the two options:

Self-Insured Employers Workers' Compensation

When an employer is self-insured, they assume financial liability for workers' compensation claims rather than purchasing insurance from a private carrier. This means they’re directly responsible for paying medical expenses, lost wages, and other benefits to injured workers.

Self-insured employers must:

• Pay claims: Covering medical expenses, lost wages, and other benefits for injured workers.
• Manage claims: Handling the claims process, including investigating accidents, reviewing medical bills, and determining eligibility for benefits.
• Maintain financial reserves: Setting aside funds to cover potential future claims.

Employers in this position take on more financial risk but aren’t required to purchase coverage from L&I and satisfy the associated guidelines.

L&I Workers' Compensation

The Washington State Department of Labor & Industries is a state agency that provides workers' compensation insurance. When an employer purchases L&I coverage, they’re essentially transferring the risk of compensation claims to the state.

L&I handles all aspects of the claims process, including:

• Investigating accidents: Gathering information about the circumstances of the injury.
• Providing medical care: Arranging for medical treatment and rehabilitation for injured workers.
• Paying benefits: Disbursing compensation for lost wages, medical expenses, and other benefits.

In many respects, this is the safer option for employers looking to satisfy their legal duty to provide workers’ compensation coverage for employee injury claims.

Key Differences

Some of the main differences between self-insured and L&I coverage include:

• Financial responsibility: Self-insured employers bear the financial burden of claims, while L&I assumes this responsibility for employers who purchase coverage.
• Claims management: Self-insured employers must manage the claims process themselves, while L&I handles all aspects of claims administration.
• Financial reserves: Self-insured employers must maintain sufficient financial reserves to cover potential claims, while L&I has a dedicated fund.
• Cost: Self-insured employers may face higher costs due to the need to maintain financial reserves and manage claims in-house.

The primary distinction between work injury claims lies in their administration. L&I claims are managed directly by the Department of Labor and Industries, while a third-party administrator oversees the administration of claims for self-insured employers.

It’s important to note that workers' comp insurance can vary in cost depending on factors like the employer's industry, accident history, and number of workers.

Benefits of Self-Insuring vs. Securing L&I Coverage

Both self-insured employers and those who buy insurance from L&I enjoy certain advantages. Here’s a closer look at the benefits of both options:

Self-Insured Employer Claims

Self-insuring can offer potential cost savings, especially for larger companies with a strong safety record.

By managing claims internally, employers gain more control over the process, including medical provider selection and claim settlement. This can also be a strategic risk-management tool, allowing business owners to better understand and manage their workers' compensation liabilities.

L&I Claims

All Washington State employers must provide workers' compensation coverage. While self-insuring can be advantageous in some instances, smaller businesses might find it more practical or affordable to purchase coverage from L&I. By doing so, they can transfer the financial risk of compensation claims to the state, providing a sense of security.

How to File a Workers’ Comp Claim in Washington State

The process of filing a workers' compensation claim in Washington varies depending on whether your employer is self-insured or covered through L&I.

Self-Insured Employers

If your employer is self-insured, you should report your injury or illness to your supervisor or human resources department as soon as possible. They’ll provide you with information on how to file a claim and may direct you to a designated claims adjuster.

L&I Claims

To file a claim with L&I, you'll need to complete a Report of Accident form. You can find this form on the L&I website or obtain a copy by contacting your employer. Once you’ve filled out the form, submit it to your employer, who will then forward it to L&I.

Filing a workers' compensation claim in Washington State requires some knowledge of your employer's insurance status. Whether your employer is self-insured or covered through L&I, promptly reporting your injury or illness is essential.

By following the specific guidelines and procedures outlined by your employer and L&I, you can increase the likelihood of a successful claim.

Are There Penalties for Unreasonable Delayed Benefit Payments?

Washington State law imposes penalties on employers or insurers who unreasonably delay workers' compensation benefits to injured workers. They can include interest on unpaid sums, attorney fees, and, in some cases, civil penalties for willful or negligent violations.

How to Report a Delayed Payment

Here’s what you should do if you believe your employer or insurer is unreasonably delaying your workers' compensation benefits:

• Contact your employer directly: Try to resolve the issue informally by communicating your concerns with your employer’s HR department.
• File a complaint with L&I: If your attempts to communicate are unsuccessful, you can file a complaint with L&I or the Office of the Insurance Commissioner.
• Hire an attorney: An experienced workers' comp attorney can help you understand your rights and push your claim forward.

Unreasonable delays in benefit payments can have a major impact on your financial well-being. Reporting the issue and working with a worker’s compensation lawyer, if necessary, can help you get the compensation you need.

Don’t Navigate the Claims Process Alone

The choice between self-insured and L&I workers' compensation in Washington State depends on various factors, including the size of the business, its financial capacity and risk tolerance, and specific industry requirements.

If your employer is self-insured, you'll typically file your claim directly with them. However, this can sometimes lead to challenges, such as delayed payments or disputes over benefits. By contrast, L&I relies on a neutral third-party administrator, which can provide additional protections and guarantee a fair process.

If you need help understanding the differences between self-insured and L&I coverage or pursuing benefits for your worker’s comp claim, we at Lehmbecker Law are ready to help. Reach out to us, and we’ll determine the best course of action and advocate for your rights and interests as you seek the benefits you deserve.