(1) The state fund may offer to an employer an optional deductible plan for benefits payable under the Workers' Compensation Act.

(2) The board shall establish deductible plans for each fiscal year. The board shall determine the factors, multipliers, ratios or other formula components for the plan.

(3) Except as provided in (4) , to qualify for a plan an employer must meet the following conditions:

(a) be selected by the state fund pursuant to criteria established by the board, and be provided a written proposal for state fund optional deductible plan;

(b) the employer shall have an annual estimated earned premium that equals or exceeds the deductible level chosen or such annual estimated earned premium as established by the board;

(c) file an endorsement form provided by the state fund; and

(d) the endorsement is approved by the state fund for the plan chosen by the employer.

(4) The employer may be disqualified or terminated at any time from participation in a plan because of a poor payment history with the state fund; as a result of a credit investigation, or review of relevant financial information which demonstrates the employer is not sufficiently financially stable to be responsible for the payment of the reasonably anticipated deductible amounts. As a condition of approval or continuation in a plan, the state fund may require security including, but not limited to, surety bond, cash deposit or guarantee sufficient to meet the reasonably anticipated obligations of the employer for the policy year.

(5) The plan shall provide for penalty for early termination of the plan by an employer.