Washington’s Rule-of-One is a BIG Cost Savings Loophole

by Liz Evans

Washington’s state fund insurance system caps the amount a company’s experience modification rate (EMR) can move up or down by 25%.  This stabilization cap allows employers to better anticipate and manage their workers’ compensation costs.


There is an exception to the rule allowing employers to bypass the 25% cap and reduce their EMR to a base rate of 1.000. This loophole, referred to as Rule-of-One provides for a huge cost savings in workers’ compensation insurance premiums with an over 33% discount.


If an employer has an EMR greater than 1.3333 and the following year the new rate is calculated below 1.000, the Rule-of-One exception kicks-in and their EMR decreases to 1.000.


Many Washington employers have benefitted from the Rule-of-One exception.  Being able to successfully achieve this enhanced discount requires a commitment to improving safety culture and proactive claims management grounded in a strong light duty program.