State-funded vs self-insured workers’ compensation claims

Workers compensation L&I claim

Background

In Washington State Workers’ compensation claims, it is important whether a claim is state-funded versus self-insured. Workers’ compensation cases are governed by the Industrial Insurance Act, which was created to provide benefits to workers and their dependents for disabilities or deaths caused by industrial injuries or occupational diseases. The Department of Labor and Industries (L&I) is the state agency that is responsible for administering the Industrial Insurance Act. Therefore, the Department is obligated to determine what benefits should be provided to an injured worker under the Industrial Insurance Act.

 

Once the Department decides about an injured worker’s entitlement to benefits under the law, the benefits are provided. Those benefits are given either from a fund that is administered by L&I from premiums collected from employers and employees statewide, or by the worker’s employer, if the employer is certified by the Department to be self-insured. We refer to claims that are administered by L&I as state-funded claims. Claims that are administered by an employer that is certified to be self-insured are typically referred to as self-insured claims.

 

Key differences

While the benefits provided under the two types of claims are virtually identical, many claims administration processes and procedures have differences. For example, state funded, and self-insured claims begin with different letters, the form for filing a claim is different if self-insured, and for most self-insured cases claim management is carried out by a third-party administrator. Common third-party administrators in Washington State include Sedgwick CMS and Liberty Mutual/Helmsman, in addition to local municipalities such as King County and Kitsap County.

 

Another difference between state funded and self-insured claims is the level of attorney involvement. In state funded cases, an Assistant Attorney General becomes involved in the case only when a determination made by L&I is disputed and appealed to the Board. However, in self-insured cases it is not uncommon for a third-party administrator to retain legal representation early in the life of the claim. In those cases, injured workers may find themselves regularly interacting with an attorney on claim related matters from treatment authorizations to claim updates.

 

Conclusion

Experienced workers’ comp attorneys representing injured workers are proficient in navigating both state funded and self-insured cases. Good workers compensation lawyers can effectively assist injured workers in navigating claims that are in the administrative phase and claims with a disputed issues that are being litigated before the Board of Industrial Insurance Appeals (BIIA) or in the Courts.

 

Additional resources: self-insured employer claims versus L&I claims in Washington State

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