WAC 296-17-89505   2007 Rate holiday dividend.  What is happening?

     As part of the medical aid fund rate holiday for the third and fourth quarters of 2007, the department will be refunding to eligible state fund employers a percentage of accident fund premiums they reported and paid for the hours worked from July 1 to December 31, 2007.

     Why is the department doing this?

     The department is doing this so that retro and nonretro employers pay for the same fair share of their expected losses after the net retro refunds and dividends are taken into consideration.

     Who is eligible?

     To be eligible, an employer must have reported and paid accident fund premiums by June 1, 2008, for the work done in at least one quarter of the two quarters covered by the rate holiday and must not have participated in the retrospective rating program during that quarter.

     Why are retro employers not eligible?

     Instead of this dividend, retro employers in aggregate will be receiving larger retrospective rating adjustments because the department will be calculating adjustments as though employers had paid medical aid premiums for the third and fourth quarters of 2007.

     How will the dividend work?

     The department will fix the dividend percentage using data available to the department as of June 1, 2008, and then announce this to the public. The department will then apply that percentage to the amount of accident fund premiums each eligible employer paid for the work done in each quarter they were eligible to calculate the dividend amount. The dividend amount will then be distributed by the department either by applying a credit or issuing a check. Employers owing the department money will receive a credit to their industrial insurance account; employers not owing the department money will be sent a check (what the state calls a warrant drawn on the state treasury).

     How will the department calculate the dividend percentage?

     The department will calculate the dividend percentage using the following formula, rounded to four decimal places:


1.0 - (1.0 - 19% x Standard Premium/Accident Fund Premium)/81%
     Standard Premium and the Accident Fund Premium are the sums of the standard premiums and accident fund premiums respectively for retrospective rating participants for hours worked during the period July 1, 2007, to December 31, 2007, using data evaluated on June 1, 2008.



[Statutory Authority: RCW 51.16.035, 51.32.073, 51.08.010, and 51.04.020(1). 07-24-046, § 296-17-89505, filed 12/1/07, effective 1/1/08.]