Statutory Changes Effective January 1, 1998
Plain Language Summary
The following recommendations have the unanimous support of the labor and management members of the Council on Worker's Compensation
Worker's compensation insurance for AFDC-JOBS and FSET participants.
The bill clarifies that, for purposes of worker's compensation insurance
coverage, the status of participants in the food stamp employment and
training (FSET) program is the same as those in the AFDC-JOBS program.
Unless the work-site employer agrees to insure them, for worker's
compensation purposes only, they are employees of the public agencies
administering these programs. The bill also clarifies the state's
expenditure authority to purchase an "umbrella" worker's compensation
insurance policy (which local agencies pay for on a per-client basis)
and that the employee-clients may not sue the work-site employer for
work-related injuries covered under a worker's compensation insurance
policy. Finally, the AFDC-JOBS sunset date coincides with the
end of AFDC in March, 1998.
Comment: These technical changes merely codify current DWD and DOA administration of worker's compensation insurance related to these programs.
help agencies. Under
current law, temporary help agencies are liable for worker's compensation
benefit payments to employees that they loan or lease to another employer.
The bill clarifies that temporary help agencies are also liable for all
penalties, and that the temporary help agency may not seek reimbursement
for penalty payments from work-site employers.
Comment: The penalty question arose in several recent contested-cases. This clarification should eliminate needless litigation by specifying who is liable for penalties. Representatives of the temporary-help industry testified in support of this proposal.
contractors. For worker's
compensation (WC) purposes, an independent contractor is not considered
someone's employee if the independent contractor meets all nine statutory
conditions for establishing the existence of an independent business. One
of the WC conditions relates to federal law. This bill adds language
related to federal self-employment income tax returns which is borrowed
directly from the definition of an independent contractor under the
unemployment insurance (UI) program.
Comment: The change was recommended by accountants dealing with both the UI and WC programs. Because the UI and WC programs have different objectives, it is not possible to have an identical definition of independent contractors on every test. Still, in recent years, both programs have attempted to re-work their statutory definitions so that they are as close as possible. For this particular test, the UI definition is preferable to the current WC definition.
bill extends the initial sunset provision on this program for another two
years, from January 1, 1998, to January 1, 2000.
Comment: Two years ago, schools were authorized to insure work-study students who received no wages from a work-site employer with whom they had been placed. If schools insured the students for worker's compensation purposes, the work-site employer continued to be immunized from tort liability. The option has rarely been used. While there are no known problems, there is not enough experience to eliminate the sunset provision completely.
by corporate officers to opt out of coverage.
Currently, 2 officers of corporations with less than 10 stockholders may
chose not to be covered under the corporation's worker's compensation
insurance policy. This change clarifies that the election to opt out of
coverage may occur at any time during the policy period, but once they
elect to opt out, they may not reverse that election during the policy
Comment: This codifies the current interpretation of the law by the Office of the Commissioner of Insurance, the Wisconsin Compensation Rating Bureau and the Worker's Compensation Division. The ability to allow certain officers of small corporations to opt out at any time during the policy, allows the corporation to reduce its premium costs. However, once they chose to opt out, that choice should be irreversible during the remainder of the policy period to prevent someone from manipulating coverage, particularly with the date of injury for occupational disease claims.
- Increased benefits.
The maximum payments for temporary total disability (TTD) and permanent
partial disability (PPD) were increased by 2.8% in both 1998 and 1999.
Comment: These increases are the result of negotiations between the labor and management members of the Council on Worker's Compensation.
- Restore the
pre-1985 52-week formula for determining wages. The bill restores the
pre-1985 formula for determining an employee's worker's compensation wage
for purposes of making benefit payments. Using the prior 52 weeks rather
than 4 calendar quarters will not change the employee's benefits, but it
makes it clearer to employers and insurers how the employee's wage should
Comment: Determining an employee's wage for purposes of making worker's compensation benefit payments can be complicated. The 1985 formula change was an effort to simplify part of the wage calculation for employers by using calendar-quarter data which they used for unemployment insurance rather than weekly data. However, the anticipated simplification did not materialize. Under the UI system, wages are not calculated and reported until the close of the calendar period--making the additional calculation of current-quarterly wages necessary. Today's widespread use of business computers makes this a much less significant issue for employers than in the past.
- Copies of
respondent's medical reports. Insurance carriers or self-insured
employers who request that an employee submit to a medical examination
shall send the employee a copy of all reports of the examination that are
prepared by the medical examiner immediately upon receiving a copy of the
Comment: Under current law, the employee receives a copy only upon request and there is no statutory statement that timeliness is important.
- Dentists. With
one exception, the bill gives dentists the same status under the Worker's
Compensation Act as physicians, chiropractors, psychologists and
podiatrists. The current evidentiary exception continues: The opinions of
dentists are admissible as evidence of the diagnosis and necessity of
treatment, but not of the cause or extent of disability.
Comment: Attorneys representing insurance carriers complained that the law authorizes the use of a dentist's testimony as evidence of diagnosis and treatment, but the statutes are silent on the right of an insurance carrier to request that an injured worker submit to an adverse medical examination by a dentist selected by the insurance carrier. In at least one case, the injured worker intended to introduce evidence from his dentist, but refused to attend an adverse dental exam scheduled by the insurance carrier.
- Fee and necessity
of treatment disputes. The bill clarifies the authority of
administrative law judges (ALJs) in the Worker's Compensation Division to
determine by stipulation, compromise or an order issued after a hearing
whether or not a health-care provider's treatment was necessary or whether
the provider's fee was reasonable. If the ALJ determines that the disputed
treatment was not necessary or the fee was not reasonable, the health-care
provider may not bill the injured worker for any unpaid balance. Also, in
any case in which liability is conceded or otherwise resolved (including
cases in which hearings have been held), the bill authorizes ALJs and the
parties to use the alternative dispute resolution processes outlined in
section 102.16 of the Statutes to determine if the provider's treatment
was necessary or if the fee was reasonable. Also, where the department
issues an order using the alternative dispute resolution processes, the
bill specifies that the department can modify the order within 30 days.
Finally, the bill extends the sunset provision on the alternative dispute
resolution processes for another two years.
Comment: This clarifies issues arising from the Labor and Industry Review Commission's decision in Sommerfeldt v. Ace Hardware Ripon, December 13, 1995.
- Religious sects.
Under current law, religious sects such as the Amish (who conscientiously
object to accepting benefits from any public and private insurance,
including federal social security benefits) are authorized to provide an
alternative form of worker's compensation benefits, provided that they
prove their financial ability to do so. The proof of financial ability has
been a letter of credit from a financial institution with dollar amounts
varying depending upon the number of employees covered by the sect. The
bill retains the requirement that the sects accept liability for providing
the alternative benefits, but eliminates the requirement that the sect
prove its financial ability to do so.
Comment: Amish representatives who helped to negotiate the current law have persuasively argued that they did not fully understand the nature of the agreement. As implemented, they particularly object that the letter of credit is virtually indistinguishable from the insurance requirements to which they conscientiously objected in the first place. As the Amish explained it, since their sect was founded in 1632, they have an unblemished record of meeting the needs of injured members and their dependents for health care and an adequate standard of living, including members who are "shunned."
- An employee's choice of an out-of-state medical practitioner is limited. The bill
provides that, unless they agree to do so, an employer or insurance
carrier is not liable to pay for out-of-state medical treatment--even when
that treatment is the result of a referral from an in-state medical
practitioner. This provision expires January 1, 2000.
Comment. This reverses the Wisconsin Supreme Court's decision in UFE v. LIRC, holding that employers and insurers remain liable for out-of-state treatment on referrals to the same extent they would be liable if the treatment had been in-state. The Council on Worker's Compensation will study the subject of out-of-state treatment in more depth during the next two-years before recommending whether to remove or extend the sunset.
- Uninsured Employer
Fund (UEF). Currently, in addition to the penalties an employer pays
for being illegally uninsured, whenever the Department pays benefits to an
employee from the UEF, the Department requires the illegally uninsured
employer to reimburse the fund for those benefit payments. By law, there
is a 30-day deadline for the illegally uninsured employer to pay
penalties, but the current statute is silent on the time within which an
illegally uninsured employer must reimburse the UEF for benefit payments
made by the Department from the UEF to injured employees. The bill
establishes the same 30-day deadline for reimbursement payments that
currently exists for penalty payments.
Also, under current law, corporate officers and directors of illegally uninsured businesses are personally liable for unsatisfied warrants issued by the Department to collect penalties or reimbursement payments. The bill extends the same personal liability for unsatisfied UEF warrants to members or managers of limited liability companies.
Comment: Members or managers of limited liability companies have a relationship to limited liability companies that is similar to what officers and directors have to corporations.