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Draft
Minutes
Permanent Total Disability Committee
January 23, 2007
 

Members present:  James Buchen, Ralph Herrmann, Jodie M. Connor, Neill De Clercq, Ron Kent, Scott Shaver, Allison Hanson, Abby Butler, Janell Knutson, Heather Thomas and John Conway

Staff present: Frances Huntley-Cooper and Kathy Froehlich

Public Attendees:  Patricia Grillot

The Committee reviewed and approved the minutes with the correction of the spelling for Ralph Herrmann.

The committee reviewed the following information:

• A listing of the number of PTD claimant deaths per year with payments under 1000 weeks
• A spreadsheet of the options and information from the previous committee
  
• Average age upon death – 68
• It was mentioned that although eliminating payment of death benefits for employees whose deaths were not a result of a work injury would reflect some savings to carriers and self-insured employers, it would also have an impact on the Work Injury Supplemental Benefit Fund as these benefits are paid to the Fund when there are no dependents.
• The percentage of PTD claims that are statutory is 21% (with dates of injury from 1999-present).
• Upon review of hearing loss cases from 1980 to 1994, 17 barred hearing loss claims were identified as being paid from the Fund after initial payment had been made by an insurance carrier or self-insured employer. Of these cases, 9 were previously compromised. The payments from the Fund covered only hearing aides and averaged approximately $3300 per case.
• Information received from Social Security reflected that the amount received by the SSDI recipient did not change when benefits were converted to Social Security Retirement. The benefit is just paid from a different fund.
• Jodie Connor has polled their offices in other states for information on escalations and duration of permanent total disability payments. It was pointed out that most states are similar to Wisconsin in that they do not have annual escalations and the duration of payments is for life.

Additional questions came from this information including whether other states have periodic increases and/or supplemental benefits and how other states define permanent total disability. Jodie will check into it.

The committee discussed requirements/criteria that might need to be considered in redefining vocational PTD. Issues included the requirement of a job search and possible relocation of an employee to obtain gainful employment.

Currently standards for vocational determinations are included in DWD 80.34. Among factors that are taken into account when determining non-statutory PTD: age, education, training, experience, efforts to obtain suitable employment.

John questioned whether this committee should consider tightening up the criteria for vocational disability. Is this or should this be part of the committee’s mission?

If the definition of PTD is changed, that may have an effect on indexing.

The committee did not come to agreement on a recommendation on PTD indexing. However, the committee restated its recommendation for a 3 year increase to the 1/1/1990 rate of $378.

The committee agreed to develop a couple of options to present to the WCAC.
 

Option 1:  Commit to 3 years in 2008 and possibly an additional 4 years in 2009. 

Option 2:  A more comprehensive plan than the first option which would address future increases in supplemental benefits and an agreed upon lag between dates of injury and current rates.

Labor representatives stated that it was a given that PTD benefits need to be increased and recommended an indexing system. If we just address increases incrementally then we’re back in a couple of years addressing this same inequity.

There was a suggestion to make another option of giving the WCAC the opportunity for periodic review.

The committee discussed the option of bringing all PTD claimants up to a 6-year lag.

A 3-year increase in 2008 was discussed. The suggestion that the Fund could handle this increase was challenged. Further discussion on this followed.

Abby provided the following –
 

Add 7 year         3.1 million
                        3.4 million over current authorized expenditures (including those
                                        Being paid in 2007 to be reimbursed in 2008)

Barred hearing loss cost             $ 1M/yr
Second Injury fund                    $ 700,000/yr
Eliminate death benefit               $ 1.1 M annually over next 15 yrs
(when death not a result of injury)

Currently, under s. 102.29, the Work Injury Supplemental Fund does not share in 3rd party settlement proceeds.

Other factors discussed:

• As the dates of injury get closer – the # of claimants and Amount of payments increase
• Amount paid out by Fund for barred hearing loss claims (including attorney fees) is approximately $ 1M annually
• Proposed possibility of eliminating barred hearing loss claims, 2nd injury claims and/or death benefit in cases where death is not a result of injury (Labor representative does not agree)
• 3 year increase would be effective in 2008 and would bring claims up to 1990 benefit level; 4 year increase would be effective in 2009 and would bring claims up to 1994 benefit level
• Labor representatives would like increase brought to a 6 year lag and will not agree to the elimination of death benefits in cases where death is not a result of injury. Also, labor representatives do not believe that changing the definition of PTD would be effective.

The committee members requested that the Department draft two proposals as discussed and submit them to the members for review. One proposal was to include increases to become effective in 2008 and 2009 and the second proposal was to be a modified version of Option 3 (with no indexing), as presented in the April 4, 2005 ‘Report of the Permanent Total Disability Rate Study Committee’.

The next meeting is scheduled for Thursday, March 8, 2007 from 10:00 a.m. to 3:00 p.m. at the Clarion.