Setting Accident Fund, Medical Aid Fund, and Stay at Work Base Rates

Each year base rates are calculated separately for the Accident Fund, Medical Aid Fund, and Stay at Work program in each risk classification. For each class, the analysis begins with 5 years of historical claim costs and reported exposures (usually hours worked) in both funds.

The data are actuarially adjusted and used to estimate the expected claims costs per unit of exposure for each classification during the upcoming rating year. These claim costs per exposure are further increased to account for administrative expenses, increased for possible retrospective premium refunds, and offset by anticipated investment income.

The resulting rates per exposure are balanced so that the overall rate change is equal to the overall change selected by the Director of L&I, and the rates are limited so that no class receives a rate change more than 25% above the overall rate change. These final rates per exposure are the class base rates.

Certain data, such as data from self-inured employers, is excluded from this calculation. Also classifications with insufficient data are combined with larger classes to calculate combined base rates.

The base rates are shown in:

Rates for Workers' Compensation.

RCW 51.16.035 (www.leg.wa.gov): Classifications — Premiums — Rules — Workers' compensation advisory committee recommendations.

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