About Retrospective Rating
Retrospective Rating (Retro) is a safety incentive program offered by L&I. In Retro, you can potentially earn a partial refund of your workers’ compensation premiums if you reduce workplace injuries and lower associated claim losses.
Any employer with an industrial insurance account in good standing may qualify to participate— either as a member of a Retro group or as an individual business. Other factors can affect eligibility as well.
Any time one of your employees is injured, it costs your company. The loss can be in production, hiring and training a replacement, rescheduling work, or the loss of a project or job. Plus, the injury can cause your workers’ compensation premium rates to go up.
In Retro, you have an opportunity to turn your good safety performance into a refund from L&I by preventing injuries and engaging in proactive claims management.
Retrospective rating is simply another way of calculating your premium, after the fact or “retroactively.”
A Retro coverage period lasts 12 months and can begin any calendar quarter. About 9 months after a coverage period ends, L&I looks back at your (or your group’s) actual experience and calculates a retrospective premium (retro premium) for that 12-month coverage year. If your retro premium for the coverage year is below what is expected, you can potentially earn a partial refund of the difference between the retro premium and the standard premium. This evaluation occurs three times for the coverage year, about 12 months apart.
Being in Retrospective Rating requires a commitment to improve safety and prevent injuries in the workplace. If your calculated retro premium is higher than the amount of standard premium you paid, it could result in your having to pay an additional amount (assessment). There is a pre-selected limit to this assessment, but it’s important that you recognize and understand this risk.
Starting April 18, 2019, L&I began using a predictive modeling system to estimate workers’ compensation claim costs. Called an “early case reserve,” this form of predictive modeling is an industry standard among insurance companies. It is designed to provide employers, and L&I, with earlier and more accurate projections for claims costs. With this improvement, employers and their representatives can see estimated reserve values in My L&I usually within 30 days from when a claim is received. The reserve is updated monthly.
Estimating future claim costs as early and accurately as possible will help employers and Retrospective Rating groups improve their ability to manage claims. The availability of this information supports better-informed decisions by employers about return-to-work options for injured workers. Better return-to-work outcomes mean lower claim costs for employers.
Provider Incentives Pilot Program
We want to inform you that the new provider incentives for best practices pilot program is currently underway and will continue through calendar year 2024 – this may have an impact for Retrospective Rating participants.
What does this mean for you?
We would like your feedback about these pilots and how the pilot incentives impact the whole workers’ compensation system. See below for information about the provider incentives pilots.
What will these incentives do?
We know that implementing occupational health best practices reduces worker disability, improves worker outcomes, and gets workers back to work as soon as medically possible. Encourage more providers to participate in best practice programs and encourage them to adopt more of the best practices. By piloting these new provider incentives we’re able to:
- Test them out,
- Track any unintended consequences,
- Evaluate their impact,
- Gather your feedback, and
- Refine them to prepare for state-wide rollout.
Where are these rates documented?
L&I will direct pilot providers to bill incentives to all L&I covered employers. These incentives are currently not part of the Medical Aid Rules and Fee Schedule (MARFS), but rather part of a special fee schedule.
When will the pilots roll out?
The Centers of Occupational Health & Education pilot began April 3, 2023.