Losing Your Claim-Free Discount

There are two ways an employer can lose his or her Claim-Free Discount:

• An employee is injured on the job and misses more than three days of work, resulting in the payment of wage-replacement benefits and/or a permanent partial disability award.
• You purchase an existing company that has a history of workplace injury or disease and costly claims. That company's experience will influence your rates until those claims are outside your experience period.

Under L&I's rating system, claims that only involve medical benefits do not affect an employer's Claim-Free Discount until the employer has a compensable claim where wage-replacement benefits, partial permanent disability awards, or death benefits are paid or estimated to be paid. For the three years that such a claim remains in the employer's experience period, these medical-only claim costs are included in calculating the employer's new premium rate. Because of that, one relatively inexpensive compensable claim can greatly impact an employer's rates.

So if one of your workers is injured, and the recovery is expected to be brief, it may be in your best interest to keep that worker on salary while he or she recovers. You also should consider offering any injured worker, who can do some work, a light-duty job to avoid lost wages.

Claims only stay on your record for three years. When these claims drop off your experience period, and if you have had no other compensable claims, you will again qualify for the Claim-Free Discount.

For a better understanding of how a claim might impact your rates, call your L&I Account Manager. His or her name and phone number is on your quarterly report, or you can call 360‑902‑4817.