(1) The second
injury fund assessment is based on anticipated second injury fund costs. The
fund is used to relieve employers' costs related to pensions that result from
the combined effects of the industrial injury and another prior injury,
preferred worker claims, and job modifications. The second injury fund
assessment is experience rated based on a self-insurer's actual usage of the
second injury fund in the previous three fiscal years. See
RCW
51.44.040 for more information about
experience rating. The department may estimate claims cost data when actual
data from an employer has yet to be provided.
The department determines a self-insurer's second injury fund
assessment rate annually for each fiscal year. The assessment is paid by active
and inactive self-insurers quarterly at the same time a self-insurer submits
its quarterly report.
(2)
Self-insurers' relief from and contributions to the second injury fund will be
recorded in the second injury assessment account. The self-insurers' second
injury fund must maintain a $200,000 minimum balance.
(3) The department uses the following process
to determine the second injury fund assessment.
Definitions:
"A" = Individual self-insurer's total second injury fund costs
(usage) for the previous three fiscal years.
"B" = All self-insurer's total second injury costs (usage) for
the previous three fiscal years.
"C" = Individual self-insurer's claim costs for the previous
three fiscal years.
"D" = Total self-insured claim costs for the previous three
fiscal years.
"E" = Individual self-insurer's experience factor.
"F" = Individual self-insurer's claim costs for the previous
fiscal year.
"G" = Total self-insured claim costs for the previous fiscal
year.
(a) The department calculates
the preliminary base rate necessary to ensure collection of
adequate funds. The preliminary base rate is the estimated usage of the second
injury costs for the coming fiscal year divided by the total estimated claims
costs. The preliminary base rate is assessed to self-insurers certified after
the fiscal year used for calculation.
(b) The department calculates the
preliminary adjusted rate, by adjusting the preliminary base rate
for over or under collections from prior periods. This rate is assessed to any
self-insurer certified during or prior to the fiscal year used for calculation,
and to any self-insurer who has voluntarily surrendered its self-insurance
certificate.
(c) The department
determines an
experience factor for each self-insurer.
(i) The department calculates the
self-insurer's
second injury fund usage share by dividing the
self-insurer's total second injury fund costs (usage) for the previous three
fiscal years by the total second injury fund costs (usage) for all
self-insurers in the previous three fiscal years.
Second injury fund usage share = A/B
(ii) The department calculates the
self-insurer's
claims cost usage share by dividing a
self-insurer's claim costs over the previous three fiscal years by the total
claim costs for all self-insurers in the previous three fiscal years.
Claims cost usage share = C/D
(iii) The department calculates the
self-insurer's
experience factor by adding the second injury fund
usage share to the claim cost usage share and dividing by 2, then dividing this
total by the claims cost usage share.
Self-insurer's experience factor
(E) = [((A/B) + (C/D))/2] / (C/D)
(d) The department calculates the
weighted average factor to determine what adjustments to the
preliminary base and adjusted rates may be necessary because of prior over or
under collection for the fund. The weighted average factor is the sum for all
self-insurer's of each self-insurer's
experience factor multiplied
by their self-insured claim cost for the previous fiscal year, divided by the
total self-insured claim costs for the previous fiscal year.
Weighted average factor = [(E x F) sum all self-insurers] /
G
(e) The department
determines the final base rate and the final adjusted
rate for the fiscal year by dividing the preliminary base rate and the
preliminary adjusted rate ((a) and (b) of this subsection) by the weighted
average factor.
(f) The department
determines the second injury fund assessment rate for each self-insurer by
multiplying the self-insurer's experience factor by either the final base rate
or the final adjusted rate.
(g) The
total assessment due each quarter is calculated by multiplying the
self-insurer's second injury fund assessment rate by the self-insurer's total
claims costs during that quarter.
