House Bill H-0235.1 (House Bill 1059) amends existing industrial insurance statutes (RCW 51.14.080 and RCW 51.14.180) to expand and clarify the department’s authority over self-insured employers and their licensed third-party administrators. The bill lists specific grounds on which the director must withdraw a self-insurer’s certification (for example, insufficient deposit, failure to meet self-insurer requirements, inducement to misreport injuries, habitual noncompliance with director rules, improper employment practices related to nondisabling conditions, failure to pay an insolvency assessment, and being found to have violated the duty of good faith and fair dealing three times within three years). It allows the director to delay withdrawal while an employer has an enforceable, nonterminable contract with a licensed third-party administrator but prohibits renewing or extending such a contract. The bill defines a duty of good faith and fair dealing that applies to all self-insured employers and their third-party administrators across all aspects of the title, and it identifies coercing a worker to accept less than the compensation due or otherwise failing to act in good faith as violations. It requires the department to adopt rules describing additional applications of the duty and criteria for penalties, to investigate alleged violations on written complaint or on its own motion, and to allow an employer or administrator 10 working days to file a written response after notice. The department must issue an order within 30 calendar days of a complete complaint or its own motion; an order finding a violation must impose a penalty of one to 52 times the average weekly wage at the time of the order, with the penalty amount accruing for the benefit of the worker. For the three-violation withdrawal ground, the department must use the date of its order to measure the three-year period, and later appellate orders that affirm violations relate back to that date; inadvertent or minor errors or delays are not considered violations for this purpose. The bill adds a new section stating the act applies to all claims regardless of date of injury and takes effect January 1, 2026. The chunk provided does not define the terms “director,” “department,” “this title,” “average weekly wage,” or “complete complaint,” nor does it include the full text of the referenced RCW provisions (RCW 51.14.077 and RCW 51.52.050), so those definitions and procedures are not available here.

If enacted, self-insured employers and the licensed third-party administrators who handle their claims will face clearer and stricter enforcement: certifications can be revoked for things like not keeping required deposits, failing to meet self-insurance rules, inducing misreporting, repeated noncompliance, not paying insolvency assessments, or committing three findings of bad-faith dealing within three years. Employers will have to take complaints seriously and respond quickly (10 working days) because the department must issue a decision within 30 calendar days and can levy penalties that go to the injured worker equal to one to 52 times the average weekly wage; certification withdrawal can be delayed only while an unbreakable TPA contract remains in force, but such contracts cannot be renewed or extended. Workers are likely to gain stronger protection because bad-faith conduct (for example, coercing acceptance of less than what is due) is explicitly covered and the penalties benefit the worker, but the practical reach of the law depends on forthcoming department rules and definitions. Important details are unclear from the provided text — for example, which agency is the “department” or “director,” how “average weekly wage” and a “complete complaint” are calculated, and the exact criteria the department will use for penalties — so some compliance costs and enforcement risks for employers and TPAs will depend on later rulemaking.