Rate Holiday

Partial 'rate holiday' ending December 31, 2007

Employers and workers covered by Washington State's workers' compensation system saved $315 million in premiums in 2007, thanks to the partial rate holiday in effect July 1 through December 31, 2007. During the rate holiday, L&I used higher-than-expected investment earnings to pay the Medical Aid Fund portion of the premium for employers and workers.

The rate holiday was temporary. Employers and workers will resume paying into the Medical Aid Fund for work performed in 2008.

What do employers need to know now?

• In January, when you pay your premium for the last quarter of 2007, do not pay the Medical Aid Fund portion.
• Do not deduct premiums from early January paychecks for work your employees performed in December.
• For work performed on or after January 1, 2008, you can again deduct 50% of the Medical Aid Fund premium from your employees' paychecks.
• L&I has prepared a payroll insert you can download, copy and give to your employees explaining why their deduction increases when the rate holiday ends.
  • Payroll insert (English) (91 KB PDF).
  • Payroll insert (Spanish) (93 KB PDF).
  •  Get Help Downloading Files (files open in a new window).

What do workers need to know now?

• The rate holiday was temporary. For work performed in 2008, your employer can again deduct 50% of the Medical Aid Fund portion of the workers' comp premium from your paychecks.
• The amount deducted in 2008 may be higher than what you paid before the rate holiday due to a general rate increase starting January 1, 2008.

What is the 'rate holiday dividend'?

Employers who did not participate in a Retrospective Rating program in the second half of 2007 will receive a dividend in August 2008. The total amount of the dividend will be approximately $31 million. How much an individual employer receives will be based on the Accident Fund premium he or she paid in the second half of 2007.

Rate Holiday Questions & Answers
All about the 2008 dividends and 2007 rate holiday.

Do you want to know more about Washington State's workers' comp system?

Washington's workers' compensation system is one of the largest in the country. A financial summary, detailed financial reports and other information on how the Department of Labor & Industries manages the system are available on this Web site.

2007 Year in Review (F200‑013‑000)
This brochure provides a financial summary of Washington State's workers' compensation system, July 1, 2006, through June 30, 2007. It also includes claim statistics and information about L&I's fraud prevention results. Brochures for 2004, 2005 and 2006 also are available.

• 2004 Year in Review (F200‑005‑000).
• 2005 Year in Review (F200‑009‑000).
• 2006 Year in Review (F200‑012‑000).

State Fund Financial Reports
Read the financial reports for a more detailed look at the state's workers' compensation system.

Contact your account manager with questions

Your account manager's phone number is on your quarterly report.

You can also call 360‑902‑4817 for general information or to be directed to your account manager.