Are You Getting Your L&I Refund?

Let’s face it everyone loves a rebate so every July, we have a refund party!

Last year, JCHBA distributed $41,777 in L&I premium refunds to our members. The checks ranged from $50 to $6,900.

For anyone identifying the reasons to belong to the JCHBA, the Return on Industrial Insurance program (ROII) is usually right on the top of the list.

The ROII program is a true gem. Washington’s Department of Labor and Industries allows organizations like the Building Industry Association of Washington (BIAW) to form their own group retrospective ratings programs, whereby member companies pool their L&I premium dollars.

Since the ROII program began in 1982, BIAW’s average refund has been 30 percent. For the last few years, it’d been about 25 percent.

BIAW’s program has more than 6,100 member companies, paying more than $100 million per year in L&I premiums. It has, by far, the largest premium base of any retro program in Washington state.

A company needs only one employee in a high-premium risk class for it to make fiscal sense to join the JCHBA purely for the ROII benefit. It’s a math problem, really. If you pay a premium of $5.32 an hour for pile driving or $4.94 to scamper on roofs, you’d only need one employee to offset the cost of JCHBA membership ($375 per year) and ROII’s annual fee ($150 or 1.5 percent of your annual L&I premium, whichever is greater). On the other hand, it would take a whole bunch of estimators (19 cents an hour) or property managers (91 cents) to make it pay.

To keep it simple, let’s say the construction trades average L&I premium is $2 per hour. For 2,080 hours, that’s $4,160. A 23 percent refund could mean $957 per employee. Refunds are spread over three years. (L&I’s doing, not the BIAW.) A company need not have an absolutely perfect record, just a positive loss ratio with L&I (premiums exceeded losses.)

Beginning in 2012, BIAW switched to ROII Select and the CAP program. ROII Select has the potential to yield returns of 45 to 60 percent (or more). The average refund is 57.4%!

An added perk of ROII is that the BIAW handles all of the pesky paperwork that goes along with L&I claims. That in itself makes it worth the nominal annual fee — even if you never saw a dime in ROII refunds.

BIAW’s claims specialists watchdog each injury claim and work with member companies and L&I to find account errors, return injured employees to work, assist in the design of light-duty programs and close claims quickly and efficiently. They have immediate electronic access to L&I’s claims database, increasing their ability to retrieve information and request action. Safety programs and legal counsel enhance their efforts.