Worker's Compensation Advisory Council

    Meeting Minutes
    Madison, Wisconsin
    June 22, 2005

    Members present:  Ms. Bean, Mr. Beiriger, Mr. Brand, Mr. Buchen, Ms. Connor, Mr. Furley, Ms. Huntley-Cooper, Mr. Kent, Mr. Newby, Mr. Olson, Mr. Shaver, Ms. Vetter and Mr. Welnak

    Excused:Mr. Gordon


    Staff present: Mr. Conway, Mr. O’Malley, Mr. Krueger, and Mr. Shorey

    1. Call to Order/Introductions: Ms. Huntley-Cooper convened the Worker’s Compensation Advisory Council (WCAC) meeting in accordance with Wisconsin’s open meetings law. All in attendance at the meeting were requested to identify themselves and their business/professional organization.

    2. Minutes: Mr. Welnak moved adoption of the minutes of the June 8, 2005 meeting. Ms. Vetter seconded the motion. There were no corrections. The motion was unanimously approved.

    3. Navitus Pharmacy Proposal: A pharmacy proposal from Mr. Allan Zimmerman, president of Navitus, was removed from the agenda. Mr. Buchen stated that this topic was removed from the agenda for this meeting because of the amount of time the presentation would take. Mr. Buchen stated that proposals concerning Professional Employer Organizations (PEOs) would not be covered at the meeting. Mr. Buchen stated that these topics would not be covered at the meeting because of concerns about not having enough time to discuss other issues.

    4. Review of Proposals: Lee Shorey reported on the current status of the Work Injury Supplemental Benefit Fund (WISBF). At this time there is a balance close to $6,000,000 in the fund. Income into the WISBF was up about $200,000 for this fiscal year. Expenditures paid out of the WISBF will be up about $300,000. For the last fiscal year total expenditures were between $2,700,000 - $2,800,000. The trend is that the WISBF balance is not significantly up or down. Payments for barred claims from the WISBF are increasing. For this fiscal year payments for supplemental benefits will be up by about $25,000.

      Previously the balance in the WISBF had been up to about $8,000,000-$9,000,000. However, the law requires that the balance cannot exceed more than three (3) times the amount paid in the previous fiscal year. A few years ago the balance was down to about $4,000,000. This was after assessments (payments into the fund) were suspended for several years. Now there is about $6,000,000 in the fund. That is about a two (2) year balance. Going to a one (1) year balance may be risky.

      Reimbursements to insurance companies for supplemental benefits are made in the period from March to the end of June. If there is an increase in benefits in 2006, we will not see expenditures rise from this until almost July 2007.

      Payments for fatalities into the WISBF amount to $543,000. Payments into the fund for fatalities where there are no dependents amount to about $2,500,000. Payments into the fund for dismemberments amount to $244,000. Interest payments are about $116,000. Interest payments were a little higher this fiscal year.

      For the last year payments out of the WISBF last year include about $725,000 for supplemental benefits. About $600,000 was paid for benefits due from the Second Injury Fund. For barred claims about $670,000 was paid for hearing loss. About $300,000 was also paid for legal services and medical services for barred claims. Over $1,000,000 is paid for all barred claims. Payments for the Children's Fund are also made from the WISBF. The amount for this was about $370,000.

      Expenditures for the WISBF for this fiscal year will be $3,200,000-$3,300,000. We do not prepare a final report until about one (1) month after the end of the fiscal year. About $48,000 was paid for traumatic barred claim injuries.

      Mr. O’Malley discussed forfeitures under s. 102.35 (1), Wis. Stats., and that Article X, section 2, of the Wisconsin Constitution required forfeitures to be deposited in the school fund. Staff from the Worker’s Compensation Division contacted the Legislative Reference Bureau (LRB) for more information about forfeitures and the possibility of having the forfeiture payments made into the WISBF rather than the school fund. The LRB advised that the school fund payments were made to libraries and that money collected as forfeitures under s. 102.35 (1) could be rerouted to the WISBF. This would require an amendment to s. 102.35 (1) to require the payment of a “surcharge” instead of a forfeiture. There are about 26 other situations where forfeiture payments were rerouted for purposes other than the school fund. Statutory changes were made in s.814.75, Wis. Stats., to reroute forfeiture payments for these other purposes. Mr. Shorey indicated that this was another potential source of income to the WISBF and rerouting forfeiture payments in this manner would generate about $200,000 annually of additional revenue.

      Mr. Shorey discussed using settlement payments for additional income to the WISBF. These monetary settlement payments are now deposited into the Uninsured Employers Fund. The WCD has discretion about where the settlement payments are deposited. The WCD has collected about $350,000 over the last four (4) years. The amounts received in settlements varies. In some years the amount is high and low in other years. This is another potential source of income for the WISBF, but it cannot be counted on as a dependable source of revenue.

    5. Discussion/Debate on Submitted Proposals:  Mr. Buchen distributed a one (1) page summary of proposals where there were tentative compromises. He advised these were a subset of issues of what have been resolved.

      Mr. Shaver stated the Management position on the proposal to increase the maximum limit on the amount for the bad faith penalty. The maximum amount would be increased from $15,000 to $25, 000, but the 10% delay of payment penalty and 12% interest under s. 648.46, Wis. Stats., would be done away with.

      Mr. Furley discussed Labor Proposal No. 5 concerning final medical reports to clarify the language that is proposed. The language, “where surgery was performed” is to be added to the administrative code provision. Adding this language is to include cases where surgeries are performed as well as cases with more than three (3) weeks of temporary disability and any permanent disability as cases that require filing a final medical report from the treating practitioner.

      The Employee and Employer members met in separate closed sessions but did not complete deliberations. Mr. Newby and Mr. Buchen requested that another meeting be scheduled.

      For the PEO/Employee leasing proposal Mr. Newby and Mr. Buchen requested staff from the WCD draft language that addresses proof of coverage/cancellation-termination notice and experience rating.

    6. Review of Correspondence: Mr. Conway reviewed three (3) letters that were received since the last meeting. The first letter was from National Association of Professional Employer Organizations (NAPEO) with language for proposed statutory amendments concerning PEOs/Employee leasing. The second letter was from Myron A. Mehlman, Ph. D. concerning benzene induced chronic myelogenous leukemia. The third letter was from Attorney John Edmondson about insurance carriers not providing adequate reasons for denying claims and proposed changes to DWD 80.02 (1)(g) of the Wisconsin Administrative Code.

    7. Adjournment:  Discussion was concluded and the meeting was adjourned at approximately 6:20 PM. The next meeting has been scheduled for July 29, 2005 beginning at 10:00 a.m. at a location to be determined in Madison.