Insurance and Disability Benefits: Washington
Federal law and guidance on this subject should be reviewed together with this section.
Author: Gloria Ju
- Washington employers are not required to provide life insurance benefits. If life insurance benefits are provided, certain requirements must be met. See Group Life Insurance.
- If a Washington employer offers group life insurance, premiums for the policies may be paid from different sources. See Employer Contribution and Coverage Requirements.
- Employees are entitled to a minimum grace period for paying premiums, except the first. See Grace Period.
- Group life insurance policies may be converted to individual policies under some circumstances. See Conversion Rights.
- If an employee stops working due to a labor dispute, the employee may continue group coverage by fulfilling certain requirements. See Continuation Coverage During Labor Disputes.
- Insurers may reduce group coverage on individuals aged 65 years or older. See Liability Limitations.
- Washington passed a Family Leave Insurance Program, but the start date has been delayed. See Future Developments.
Group Life Insurance
In Washington, employers are not required to provide employees with life insurance benefits. If an employer chooses to provide life insurance as a benefit, certain requirements apply.
Employer Contribution and Coverage Requirements
A group life insurance policy must cover at least two employees on the date the policy is issued. +Rev. Code Wash. (ARCW) § 48.24.020(3).
An employer's group policy must cover all of the employer's employees, or all of any class or classes of employees determined by conditions pertaining to their employment. A policy may, but is not required to, define eligible employees to include:
- Employees of subsidiary corporations;
- Employees, individual proprietors and partners of affiliated corporations, proprietorships or partnerships that are under common control with the employer;
- The individual proprietor or partners if the employer is an individual proprietorship or partnership; and
- Retired employees.
The premiums may be paid from any of the following:
- The employer's funds or contributions;
- Funds contributed by the insured employees; or
If employer funds pay the entire premium, then the policy must insure all eligible employees, except those who cannot provide satisfactory evidence of individual insurability. +Rev. Code Wash. (ARCW) § 48.24.020(2).
Group coverage may be extended to an employee's spouse and dependent children, or any class or classes of dependents. +Rev. Code Wash. (ARCW) § 48.24.030(1). The term spouse includes individuals in state-registered domestic partnerships. +Rev. Code Wash. (ARCW) § 48.24.900.
Group life insurance policies must include a 31-day grace period for premium payments, except the first, during which the death benefit coverage will continue in force unless the policy-holder gives written, advance notice of discontinuance under the terms of the policy. +Rev. Code Wash. (ARCW) § 48.24.110.
Once an insured individual has maintained a life insurance policy for two years, an insurer may only contest the policy for nonpayment of premiums. When contesting the validity of the insurance, the insurer is prohibited from using statements made by the insured relating to his or her insurability, unless the statement is in writing and signed by the insured. +Rev. Code Wash. (ARCW) § 48.24.120.
Employees who lose eligibility for their employer's group life insurance policy must have the option to convert the policy to an individual life insurance policy. The employee will generally be entitled to conversion without evidence of insurability as long as the employee properly initiates the conversion.
An employee may lose eligibility due to termination of employment or termination of membership in the eligible class or classes. The employee may convert only the life insurance policy, not any disability or other supplementary benefits. The individual policy amount may not exceed the amount of the terminated group policy or be less than $1,000, unless the amount of the group policy was smaller. +Rev. Code Wash. (ARCW) § 48.24.180.
An employee who loses coverage because the group policy is terminated or amended is entitled to convert the group policy into an individual life insurance policy if the employee had the group policy for at least five years. The amount of the individual policy may not exceed the lesser of:
- The amount of the group policy less the amount of any life insurance for which the employee is or becomes eligible under any group policy within 31 days of the termination of the group policy; or
If a covered employee dies during the period the employee was entitled to convert to an individual policy and before the individual policy becomes effective, the amount of life insurance to which the employee would have been entitled to have issued to him or her is payable as a claim under the group policy. The claim is payable regardless of whether or not the employee applied for the individual policy or paid the first premium. +Rev. Code Wash. (ARCW) § 48.24.200.
These conversion rights are also available to an employee's spouse. +Rev. Code Wash. (ARCW) § 48.24.030(2).
Continuation Coverage During Labor Disputes
If an employee's compensation includes group life insurance, the premiums of which are paid in full or in part by the employer, and compensation is suspended or terminated due to a strike, lockout or other labor dispute, the employee may continue group coverage for up to six months if he or she pays the premiums due. When group coverage is no longer available, the employee has the right to convert to an individual policy.
When compensation is suspended or terminated, the employer must immediately mail a written notice to the employee that he or she may pay the premiums as they become due.
Group life insurance policies may contain a provision that the insurer is not liable, or is liable only in a reduced amount, for losses resulting from:
- War/acts of war or military service; or
- Aviation under conditions specified in the policy.
Group life insurance over $1,000 may be reduced to $1,000 (or any greater amount) for individuals who turn 65 years old (or any older age). +Rev. Code Wash. (ARCW) § 48.24.210(2).
Washington's legislature passed a Family Leave Insurance Program that would provide up to five weeks of paid family leave to parents who take time off from work to care for a newborn baby or a child recently placed for adoption. The maximum weekly benefit would be $250. Employers with 25 or more employees would also be required to reinstate employees who have worked at least 1,250 hours during the previous year.
The program's start date has been repeatedly delayed and will not be implemented until the legislature is able to appropriate funds and enact an implementation date for benefits. See FMLA: Washington > Future Developments.