Retrospective Rating—Earning Financial Rewards with Safety Initiatives

Now, more than ever, Washington businesses are ‘feeling the pinch.’ Revenue margins are slimming while expectations from both internal and external customers continue to grow. Washington employers can leverage their safe work practices to help reduce operational costs and potentially even recoup some money spent by participating in a Retrospective Rating (Retro) program.  

What is Retro?

Retro is a voluntary safety incentive program offered by the Washington Department of Labor & Industries (L&I). Participating employers can earn a partial refund on the workers’ compensation insurance premiums they pay to L&I by reducing workplace injuries and illnesses with effective safety and health programs and proactively managing claims that do occur. Both practices help keep lower operational costs. 

How Does Retro Work?

Unless self-insured, employers in Washington purchase workers’ compensation insurance from L&I. Every December, employers receive an annual rate notice summarizing their insurance rates, which take effect in January for the following year. These rates are determined by the employer's work type and insurance usage over a previous three-year period. 

Retro adds a secondary look at how much a participating employer pays to L&I for their workers’ compensation insurance premiums. Participants continue to pay their upfront premiums the same way all employers do. However, about nine months after a Retro coverage period ends, L&I reviews the participating employer’s actual performance, comparing how much premium they paid to the claims costs they accrued. Based on this review, L&I calculates a new retrospective premium for the coverage year. If the employer initially paid more upfront for their insurance than their claims costs during that period, they can potentially earn a refund on a portion of the premium they paid. Each Retro coverage year is evaluated three different times, meaning there are three opportunities to earn rebates.

It should be noted that Retro is a risk-reward program. Employers can earn a rebate on their insurance premiums by keeping their workers' compensation costs low but risk a potential assessment if costs exceed premiums. 

Who Can Participate in Retro?

At a minimum, employers must have an active L&I insurance account in good standing to qualify for the program. Employers also must decide how they want to enroll—as an individual employer or as a member of a group. Individual employers are evaluated solely on their performance, whereas group members share the burden by pooling their insurance premiums and claims costs. There is more risk involved for individual employers because when they have a year with high claims costs, as most employers experience from time to time, they typically must pay an assessment penalty. For this reason, over 99% of participants participate in a risk-sharing group program. 

Employers that choose group participation must be members of an employer association, such as Archbright. If the group performs well and keeps costs low, members receive a refund. The benefit of this type of program is that it allows participants to have an occasional poor-performing year and not receive an assessment. The downside is that because the group is absorbing the losses of a few poor-performing members, the rest of the group’s refunds are reduced. Because of this, choosing the right group to join is of utmost importance. When shopping for groups, employers should review the group’s past performance, participation requirements, and established group protections.

Additional Benefits

While receiving a rebate on workers’ compensation insurance premiums is certainly enough incentive for Retro participation, there are additional benefits:

• Reducing Insurance Rates. The program provides an avenue for employers to actively lower and maintain their upfront workers' compensation insurance rates through effective safety practices and proactive claims management. Many find that by implementing these protocols, they receive additional discounts on their already lowered upfront insurance. The rebates are really just the icing on the cake. Eligible Archbright members can learn more about controlling insurance rates by watching the mozzo workers’ compensation microlearning series. 
  
  
• Improving Workplace Safety. Retro encourages employers to prioritize workplace safety by developing and implementing robust safety protocols and practices that protect workers, which should be every employer’s mission. Members of Archbright’s Retro programs receive expert guidance and resources from trained industry professionals to reduce workplace accidents, injuries, and claims. Retro group members often experience additional benefits such as improved employee morale and better outcomes on safety inspections which can save costs on employee turnover and safety citations. 
  
  
• Accessing Educational Opportunities. Retro members also have access to many educational resources and training options. Many Retro associations organize forums, workshops, and webinars to enhance employers' understanding of safety practices, compliance requirements, and industry-specific risk management strategies.  

Archbright’s Retro Programs Stand Out

Although there are many reasons to join a Retro program, employers mainly participate for insurance rebates, and Archbright delivers. Members of our manufacturing group program recently received a whopping 32.9% refund. This equates to over 11 million dollars being returned to group members in 2023! In addition, Archbright’s wholesale, retail, and professional services industry group has received 34% returns on average since its inception in 2018. 
In addition to stellar performance, Archbright stands out amongst other Retro groups because of its membership model. 100% of refunds earned by the group are returned to the participants, and members earn rebates in the group based on merit. This means employers who demonstrate positive performance earn the refunds they deserve. 

Archbright also works on behalf of members to get even more money returned through Washington’s Stay-at-Work (SAW) incentive program. The program allows employers who offer light duty to injured workers to recoup some of the costs of keeping the injured employee working in a job that supports their recovery. Although any employer participating in the state’s insurance program can take advantage of the SAW program, many find the paperwork cumbersome, and millions of dollars are left unclaimed. Archbright handles this for its members and has assisted them in receiving over seven million dollars since the program started in 2011. 

Financial rewards are not the only thing that makes Archbright Retro membership shine. Members have access to a wide array of employment services and professional development resources to help keep their workplaces running smoothly, including support from industry experts in HR, Safety, employment law, and Diversity, Equity, and Inclusion (DEI). This is in addition to receiving a dedicated Loss Control and Claims Management team to help control workers’ compensation costs. Retro members are also provided access to mozzo, an online portal with a robust HR and Safety Resource Library, Video Training Library, a Job Description Builder, a personalized Safety Data Sheet Library, Advisor Chat, and more. 

Is Retro Right for You?

All workplaces can benefit from the cost savings, financial rewards, and improved safety fostered by Retro participation. When employers take a more proactive role in promoting a safer working environment, they create a win-win situation where employees reap the benefits of working in a safe environment, and the employers have more control over operational costs. To learn more about Archbright’s Retrospective Rating programs and whether one is the right fit for your organization, please email info@archbright.com.