The bill creating a “good faith” standard for cities that self-insure for workers’ compensation bounced back and forth between the House and Senate as they worked to agree on a final version in the last days of session.
Readers will remember that HB 1521 creates a duty of “good faith” for self-insured employers
and their third-party administrators towards workers in self-insured workers’ compensation programs, with penalties for violating good faith.
HB 1521 passed out of the House on March 1 with a 69-27 vote. AWC was able to negotiate a Senate amendment to include language clarifying that it doesn’t create a private right of action. Additionally, the Senate narrowed its scope
to only apply to municipal self-insured employers. It passed the Senate on a 32-17 vote on April 10. On April 13, the House refused to accept the Senate’s amendments and asked the Senate to recede. The Senate receded from their earlier amendments
on April 20, but adopted new amendments and sent the bill back to the House on a 29-19 vote. The House accepted the final amendments and passed the bill on April 22 with a 84-14 vote.
The crux of the disagreement between the chambers was over the narrowing of the bill to exclude private employers. The final version of the bill now limits the new “good faith” standard to municipal self-insured employers and self-insured
private sector firefighter employers. It also provides some definition to “good faith” to require fair dealing and equal consideration of workers’ interest. Inadvertent or minor delays or errors are not considered violations of good
faith. The amendment reworks the penalties for violations, with repeat violators of good faith (three or more times over three years) being subject to loss of self-insurance certification by L&I and creates some ground rules around how such de-certifications
are enforced. Finally, the amendment continues to clarify that the bill does not create a private right of action, and that only L&I has jurisdiction to enforce the “good faith” standards.
There are 18 cities that self-insure for workers’ compensation.