Insurance Letter 529

Purpose

To communicate to insurance carriers and self-insured employers the new assessment rate and issue date information, and also to remind insurance carriers and self-insured employers that interest will accrue on all unpaid balances after 30 days. The Worker’s Compensation Administrative Assessment is issued annually.

Background

Section 102.75, Wis. Stats., authorizes the department to assess and collect the administrative costs for the Wisconsin Worker’s Compensation Act from worker’s compensation insurance carriers and self-insured employers. Each company's indemnity amount is determined by summing the amounts paid for each claim "first closed" in the previous calendar year. Indemnity includes payments for temporary total and partial disability, permanent total and partial disability, compromises, death benefits and funeral expenses, paid holidays, supplemental benefits, disfigurement, and vocational rehabilitation.

The Worker’s Compensation Administrative Assessment rate is calculated by dividing the current state fiscal year’s operating costs by the total indemnity payments from carriers and self-insured employers for claims "first closed" in the previous calendar year. The total indemnity paid for 2019 "first closed" claims was $247,710,151. The Worker’s Compensation Division’s (WCD) net operating revenue to be collected for State Fiscal Year (SFY) 2021 is $13,185,026. Based on the calculation ($13,185,026 divided by $247,710,151), the general assessment rate is 5.323%. The resulting rate is rounded up to avoid a budget shortfall.

Self-insured employers pay the 5.323% general assessment rate plus an additional 1.326% to cover administrative costs of operating the self-insured employers program for a total of 6.649%. The self-insured employer invoice also includes the $200 self-insured renewal fee for the period of July 1, 2020 through June 30, 2021.

Each company's assessment amount is determined by multiplying its 2019 "first closed" claims total indemnity payments by the rate indicated. Each company's claim detail listing is available at http://dwd.wisconsin.gov/wc/insurance/assess-program.htm; click on Assessment Reports. You will need your DWD/WISCONSIN Logon Account ID and password.

The overall budget funds three major components:

OWCH and LIRC are reimbursed out of the overall budget for services provided to the Department. The breakdown of SFY20 expenditures are as follows:

New this year, invoices may be requested via email. Please email your request to WCASSESSMENT@dwd.wisconsin.gov noting the preferred email address and all organizations you process payments for. Please do not include email attachments; attachments are automatically removed from email messages before they go into our general email boxes.

WC Administrative Service Providers SFY20 Expenses % of Total
DWD-WC Operations $8,742,09 64.11%
DHA-OWCH Services $4,378,072 32.11%
LIRC Services $515,820 3.78%
SFY20 Total $13,635,990 100%

Action Requested

Payment of your SFY2021 assessment invoice

Payment Submission Options

  1. Checks payable DWD-Bureau of Finance (See invoice for remittance address)
  2. ACH (electronic) payment instructions may be requested at the email address, below.

Inquiries

WCASSESSMENT@dwd.wisconsin.gov or Pati Brown at (608) 266-8764 or Lynn Weinberger at (608) 266-0331

Please do not include email attachments; attachments are automatically removed from email messages before they go into our general email boxes.

Enclosure

Invoice

Reference

WC Division website for claim detail listing