Indicator 2: Promptness of First Indemnity Payments

Indicator Description:  

This indicator measures insurers’ compliance with DWD 80.02(3)(a) relating to the promptness of first indemnity payments.

Compliance Requirement:

DWD 80.02(3)(a) establishes a promptness standard of 80% or more for all first indemnity payments. In order to meet the standard first indemnity payments must be mailed to the injured employee within 14 days or less following the date of injury or the last day worked after the injury before the first day of compensable lost time.

With 80% as the benchmark, the standard allows for unavoidable delays resulting from litigation or claim investigations, as well as delays in notification of the injury from the employee to the employer or the employer to the insurer. The standard was developed and set at 80% with consideration of these and other reasons for delayed payments that were beyond the insurer's reasonable control.

Standard or Benchmark:

DWD 80.02(3)(a) sets the standard for prompt first indemnity payments as follows: 80% or more of first indemnity payments are to be made within 14 days of the date of injury or the last day worked.

Source of Indicator Data:  

Temporary total disability (TTD) payments are used to measure timeliness of first indemnity payments. Salary Continued payments are always considered as a prompt payment. First TTD payments made as a result of an order from a legal hearing or stipulation are included in the timeliness measurement. Payments made as a result of a compromise agreement, or a hearing loss claim, are not included in the assessment of timeliness of first indemnity payments. All other types of payments, including permanent partial disability (PPD) and temporary partial disability (TPD), are excluded from the timeliness measurement.

Computation Methodology:  

For most claims promptness of the first indemnity payment is measured by computing the number of days from the day following the date of injury or last day of work, whichever is later, to the day the first indemnity payment is made.

In cases in which the first period of lost time is 3 days or less, followed by a period of intervening work that is followed by another period of lost time, computation begins with the last day worked which triggered eligibility for payment for the first period of lost time. For example, an injury happened on December 1 but the worker was on the job December 3-6 and subsequently was not able to work from December 7-10; then, a first indemnity payment made by December 20 would be timely.

State of Wisconsin Average:


What This Indicator Measures:

This indicator measures promptness of Worker's Compensation first indemnity payments. The legal standard for insurers is to make 80% or more of first indemnity payments within 14 days of the date of injury or last day of work prior to the first compensable day of injury, whichever occurs later. This indicator summarizes data from about 180 insurers, accounting for over 90% of all claims. Data is updated quarterly.

Explanatory Comments for Current Indicator:

Industry performance is at 81% for the 1st quarter of 2018. 12 quarter performance is holding at 82%, 2% above the statutory standard of 80%. This overall performance can be attributed to constant monitoring, counseling and enforcement actions on the part of the WC Division. It is also the result of industry concern to both make timely first indemnity payments and engage in informational outreach to employers regarding when the former should be reporting injuries to the latter.

Indicator 2: Promptness of First Indemnity
Group A - Large Insurers (400 claims or more per year)
Group B - Medium Size Insurers (65-399 claims per year)
Group C - Small Size Insurers (equal to or greater than 65 claims every 3 years)

PLEASE NOTE: Quarterly summary reports are static. As such they are a snapshot of performance reflected by our database on the 14th day of every new quarter. As such, actual performance may be different due to changes to the claims for the given quarter after the reports are run.

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