SB456: Bill Text

Local governmental units

Under current law, each county, city, town, village, school district, sewer district, drainage district, long-term care district, and other public or quasi-public corporation (municipality) is liable for worker's compensation when an employee in the service of the municipality, whether elected, appointed, or under a contract of hire, is injured while performing services growing out of and incidental to his or her employment.

This bill changes the term "municipality" to "local governmental unit" for purposes of the worker's compensation law and redefines that term to mean a political subdivision of this state; a special purpose district or taxing jurisdiction in this state; an instrumentality, corporation, combination, or subunit of any of the foregoing; or any other public or quasi-public corporation. Under current law, cities, villages, towns, and counties are political subdivisions of this state; special purpose districts include school districts, sewer districts, drainage districts, long-term care districts, and other districts created for special purposes; and taxing jurisdictions are entities, not including the state, that are authorized by law to levy property taxes.

Payment of benefits

Decreased compensation; employee negligence

Under current law, if an employee's injury is caused by the failure of the employee to use safety devices that are provided in accordance with any statute, rule, or order of the Department of Safety and Professional Services and that are adequately maintained, and the use of which is reasonably enforced by the employer, if injury results from the employee's failure to obey any reasonable rule adopted and reasonably enforced by the employer for the safety of the employee and of which the employee has notice, or if injury results from the intoxication of the employee by alcohol or use of a controlled substance, the amount of worker's compensation payable to the employee is reduced by 15 percent or by $15,000, whichever is less.

This bill provides that if an employee's injury is caused by such a failure to use safety devices, failure to obey a safety rule, or intoxication or by any other negligence attributable to the employee, the amount of worker's compensation payable to the employee is reduced in proportion to the amount of negligence attributable to the employee.

Reduction of benefits; other benefits payable

Social security old-age assistance. Current law provides that when an injured employee is receiving disability benefits under the federal Social Security Act, the amount of worker's compensation payable to the injured employee is reduced so that the total amount of worker's compensation benefits and social security disability benefits does not exceed 80 percent of the employee's average current earnings (social security offset). That reduction is allowed only as to social security disability benefit payments made beginning on July 1, 1980, that reduction may not take into account social security payments made to dependents of the employee, and that reduction may not be made on temporary disability benefits payable during a period in which the employee is receiving vocational rehabilitation services.

This bill, beginning on July 1, 2016, similarly applies the social security offset to an injured employee who is receiving old-age assistance benefits under the federal Social Security Act. The bill, however, provides that no reduction in worker's compensation benefits may be made if it is shown that, notwithstanding the receipt of such old-age assistance, the injured employee is available for work.

Worker's compensation laws of other states. The bill also permits an employer or insurer to reduce the amount of benefits payable to an injured employee under the worker's compensation law of this state by the amount of benefits paid or payable to the injured employee under the worker's compensation law of any other state for the same injury. That reduction is allowed only as to payments made under the worker's compensation law of another state made after the effective date of the bill, that reduction may not take into account payments made under the worker's compensation law of another state to dependents of the employee, and that reduction may not be made on temporary disability benefits payable during a period in which the employee is receiving vocational rehabilitation services.

Supplemental benefits

Under current law, an injured employee who is receiving the maximum weekly benefit in effect at the time of the injury for permanent total disability or continuous temporary total disability resulting from an injury that occurred before January 1, 2001, is entitled to receive supplemental benefits in an amount that, when added to the employee's regular benefits, equals $582. Those supplemental benefits are payable in the first instance by the employer or insurer, but the employer or insurer then is entitled to reimbursement for those supplemental benefits paid from the worker's compensation operations fund.

This bill makes an employee who is injured prior to January 1, 2003, eligible for those supplemental benefits beginning on the effective date of the bill and increases the maximum supplemental benefit amount for a week of disability occurring after the effective date of the bill to an amount that, when added to the employee's regular benefits, equals $615.

Statute of limitations; traumatic injuries

Under current law, subject to certain exceptions, an application for a hearing on a claim for worker's compensation that is not filed with DWD within 12 years from the date of injury or death or from the date that worker's compensation was last paid, whichever is later, is barred by the statute of limitations.

This bill reduces the statute of limitations for filing an application for a hearing on a worker's compensation claim for a traumatic injury to two years from the date of injury or death or from the date that worker's compensation was last paid, whichever is later.

Temporary disability

Exception for employee terminated for misconduct or substantial fault. Under current law, temporary disability benefits are payable during an employee's healing period, even thought the employee could return to a restricted type of work, unless: 1) suitable employment within the limitations of the employee is furnished by the employer or by some other employer; 2) the employee has been convicted of a crime, is incarcerated, and is not available to return to a restricted type of work during that period; 3) the employee is suspended or terminated from employment due to the employee's alleged commission of a crime, the circumstances of which substantially relate to the employment, and the employee is charged with the commission of that crime; or 4) the employee is suspended or terminated from employment due to the employee's violation of the employer's drug policy, if prior to the date of injury that policy was established in writing and regularly enforced by the employer.

This bill provides that an employer is not liable for temporary disability benefits during an employee's healing period when the employee is suspended or terminated from employment due to misconduct, as defined in the unemployment insurance law, or substantial fault, as defined in the unemployment insurance law, by the employee connected with the employee's work.

The unemployment insurance law defines "misconduct" as action or conduct evincing such willful or wanton disregard of an employer's interests as is found in: 1) deliberate violation or disregard of standards of behavior that an employer has a right to expect of his or her employees; or 2) carelessness or negligence of such degree or recurrence as to manifest culpability, wrongful intent, or evil design in disregard of the employer's interests or to show an intentional and substantial disregard of an employer's interests or of an employee's duties and obligations to his or her employer.

The unemployment insurance law defines "substantial fault" as acts or omissions of an employee over which the employee exercised reasonable control that violate reasonable requirements of the employee's employer, but not including minor infractions, inadvertent errors, or failure to perform work due to insufficient skill, ability, or equipment.

Renewed period of temporary disability; amount of compensation payable. Under current law, subject to certain exceptions, the amount of worker's compensation payable to an injured employee is determined in accordance with the rate of worker's compensation payable that is in effect as of the date of the injury. One of of those exceptions, however, provides that when an injured employee has a renewed period of temporary disability commencing more than two years after the date of injury and has returned to work for at least ten days preceding the renewed period of disability, worker's compensation payments for the new period of disability are at the rate in effect at the commencement of the new period of disability.

This bill eliminates that exception. As such, under the bill, when an injured employee has a renewed period of temporary disability commencing more than two years after the date of injury and has returned to work for at least ten days preceding the renewed period of disability, worker's compensation payments for the new period of disability are at the rate that is in effect as of the date of the injury.

Vocational rehabilitation. Under current law, an injured employee is entitled to receive compensation for temporary disability while the employee is receiving vocational rehabilitation services under the federal Rehabilitation Act of 1973. If, however, the injury causes only partial disability, the employee's weekly indemnity is the proportion of the weekly indemnity rate for total disability that the actual wage loss of the injured employee bears to the injured employee's average weekly wage at the time of injury, except that compensation for temporary disability on account of receiving vocational rehabilitation services shall not be reduced on account of any wages earned for the first 24 hours worked by an employee during a week in which the employee is receiving those services and only hours worked in excess of 24 during that week shall be offset against the employee's average weekly wage in calculating compensation for temporary disability. That exception, however, does not apply after April 30, 2014. This bill extends that exception to April 30, 2018.

Prescription drug treatment

Under current law, an employer or insurer is liable for providing medicines as may be reasonably required to cure and relieve an injured employee from the effects of an injury sustained while performing services growing out of and incidental to employment. Current law, however, limits the liability of an employer or insurer for the cost of a prescription drug dispensed for outpatient use by an injured employee to the average wholesale price of the prescription drug as quoted in the Drug Topics Red Book (average wholesale price).

This bill provides that if a prescription drug dispensed for outpatient use by an injured employee is a repackaged prescription drug, the liability of the employer or insurer for the cost of the repackaged prescription drug is limited to the average wholesale price of the prescription drug set by the original manufacturer of the prescription drug, except that if the National Drug Code number of the prescription drug as packaged by the original manufacturer cannot be determined from the billing statement submitted to the employer or insurer, that liability is limited to the average wholesale price of the lowest-priced drug product equivalent. The bill also provides that an employer or insurer is not liable for the cost of a repackaged prescription drug dispensed more than seven days after an employee's date of injury. Those limitations of liability, however, do not apply to a repackaged prescription drug dispensed from a retail, mail-order, or institutional pharmacy.

Permanent partial disability

Under current law, DWD has promulgated rules establishing minimum permanent partial disability ratings for certain amputation levels, losses of motion, sensory losses, or surgical procedures resulting from injuries for which permanent partial disability is claimed.

This bill requires those rules to provide that those minimum ratings for a surgical procedure do not apply if it is shown that after the procedure the injured employee suffers from no actual impairment as a result of his or her injury.

Hearings and procedures

Notice of injury

Under current law, if an injured employee does not file an application for worker's compensation with DWD within two years after the date of injury or the date the employee knew or ought to have known of his or her disability and its relationship to employment, the injured employee's right to worker's compensation for the injury is barred, unless within that two-year period the employer knew or should have known of the injury.

This bill reduces that two-year period to one year.

Health care records in electronic format

Under current law, a physician, chiropractor, psychologist, podiatrist, dentist, physician assistant, advance practice nurse prescriber, hospital, or health service provider, upon request by an injured employee, employer, insurer, DWD, or DHA, must provide that person with any written material that is reasonably related to an injury for which the employee claims worker's compensation, upon payment of the actual cost of providing those materials, not to exceed the greater of 45 cents per page or $7.50 per request, plus the actual costs of postage.

This bill permits that material to be provided in electronic format upon payment of $26 per request.

Final practitioner's report

Under current law, if an injured employee has a period of temporary disability of more than three weeks or a permanent disability, has undergone surgery to treat an injury, other than surgery to correct a hernia, or sustains an eye injury requiring medical treatment on three or more occasions off the employer's premises, the employer or insurer must submit to DWD a final treating practitioner's report. Current law, however, prohibits DWD from requiring submission of that report when the employer or insurer denies the employee's claim for compensation and the employee does not contest that denial. This bill limits that prohibition to cases in which the employer or insurer denies the employee's claim for compensation in its entirety.

Prospective vocational rehabilitation training orders

Under current law, any party in interest may submit to DWD any controversy concerning worker's compensation and DHA, after hearing, must issue an order determining the rights of the parties regarding the controversy. Current law also permits DHA to issue interlocutory, i.e., nonfinal, findings, orders, and awards, which may be enforced in the same manner as final awards. Current law specifically permits DHA to include in an interlocutory or final award or order an order directing the employer or insurer to pay for any future treatment that may be necessary to cure and relieve an injured employee from the effects of the employee's injury.

This bill permits DHA to include in an interlocutory or final award or order an order directing the employer or insurer to pay for a future course of instruction or other rehabilitation training services provided under a rehabilitation training program.

Review of permanent partial disability awards

Under current law, a DHA hearing examiner's decision awarding or denying worker's compensation generally is final and may not be reopened after the time for reconsideration or appeal of the decision has passed. Current law, however, permits DHA, in cases of occupational disease, to review from time to time its findings, order, or award, and make new findings or a new order or award, based on the facts regarding disability as they may then appear.

This bill, in cases in which DHA makes a final award of worker's compensation based on a finding that the injured employee has incurred a permanent partial disability, requires DHA to order the injured employee to submit to a reexamination by a practitioner once every three years after the date of the award or order upon the written request of the employer or insurer. After such a reexamination, a party to the worker's compensation proceeding may file an application requesting DHA to review its findings on the issue of the level of the employee's disability. After that review, DHA may make new findings on that issue and order a new award based on the level of the employee's disability as it may then appear.

Administrative review of a worker's compensation decision

Under current law, a party to a worker's compensation proceeding may petition the Labor and Industry Review Commission (LIRC) for review of a DHA hearing examiner's decision awarding or denying worker's compensation (petition for review) if DHA, DWD, or LIRC receives the petition for review within 21 days after DHA or DWD mailed a copy of the examiner's findings and order to the petitioner's last-known address. Currently, LIRC must dismiss a petition for review that is not timely filed unless the petitioner shows probable good cause that the reason for failure to timely file the petition was beyond the petitioner's control. This bill requires a party to file a petition for review with LIRC, not DHA or DWD. The bill also requires LIRC to dismiss a petition for review that is not filed within those 21 days unless the petitioner shows that the petition was filed late for a reason that was beyond the petitioner's control.

Under current law, within 28 days after a decision of LIRC is mailed to the last-known address of each party to a worker's compensation proceeding, LIRC may, on its own motion, set aside the decision for further consideration. This bill permits LIRC to set aside a decision within 28 days after the date of the decision, not the date of its mailing.

Judicial review of a worker's compensation decision

Under current law, a party that is aggrieved by an order or award made by LIRC may commence an action against LIRC in circuit court for judicial review of the order or award (action for judicial review). Current law requires the adverse party to also be made a defendant in an action for judicial review. Recently, a concurring opinion in Xcel Energy Services, Inc. v. LIRC, 2013 WI 64, "unequivocally and firmly" recommended that the Council on Worker's Compensation propose legislative revisions to clarify who must be included as a party in an action for judicial review. Id. at p. 71. That concurring opinion further proposed that LIRC consider adopting the practice of providing information with its order or award instructing the parties as to who is to be named as an adverse party in an action for judicial review. Id. at p. 73.

This bill requires LIRC to identify in an order or award the persons that must be made parties to an action for judicial review. The bill also requires the summons and complaint in the action to name those persons as defendants. In addition, the bill permits the circuit court to join as a party to the action any other person determined necessary for the proper resolution of the action, unless joinder of the person would unduly delay the resolution of the action.

Program administration

Health service fee disputes

Under current law, if a health service provider, injured employee, insurer, or employer submits to DWD a dispute over the reasonableness of a health service fee charged for services provided to the injured employee, DWD must determine the reasonableness of the disputed fee by comparing the disputed fee to the mean fee for the procedure for which the disputed fee was charged, as shown by data from a database certified by DWD.

This bill provides that if an employer or insurer and a health care provider have agreed by contract to a fee for a health service procedure, DWD must determine that the disputed fee is reasonable and order that the disputed fee be paid, if the disputed fee is at or below the agreed-to fee in effect on the day on which the procedure was provided, and must determine that the disputed fee is unreasonable and order that the agreed-to fee be paid, if the disputed fee is above the agreed-to fee in effect on the day on which the procedure was provided.

Choice of practitioner

Current law requires the employer of an injured employee to offer the injured employee his or her choice of any practitioner licensed to practice in this state for treatment of the injury. Current law also permits an injured employee to have the choice of any qualified practitioner not licensed in this state, by mutual agreement between the injured employee and the employer.

This bill: 1) requires the employer of an injured employee who is covered under a health benefit plan provided by the employer to offer the injured employee his or her choice of any practitioner licensed to practice in this or any other state for treatment of the injury as provided under the health benefit plan; and 2) requires the employer of an injured employee who is not covered under a health benefit plan provided by the employer to offer the injured employee the employer's choice of any practitioner licensed to practice in this state or any other state for treatment of the injury in accordance with the employee's treatment plan. The bill specifies that in the case of an injured employee who is not covered under a health benefit plan provided by the employer, the employer may choose a particular practitioner to treat the injured employee, but may not choose the type of treatment to be provided or the type of practitioner to provide that treatment.

Investigation and prosecution of fraudulent activity

Under current law, if an insurer or self-insured employer has evidence that a worker's compensation claim is false or fraudulent and if the insurer or self-insurer is satisfied that reporting the claim will not impede its ability to defend the claim, the insurer or self-insured employer must report the claim to DWD. DWD may then require the insurer or self-insured employer to investigate the claim and report the results of the investigation to DWD. If, based on the investigation, DWD has a reasonable basis to believe that criminal insurance fraud has occurred, DWD must refer the matter to the district attorney for prosecution.

This bill permits DWD to request the Department of Justice (DOJ) to assist DWD in an investigation of a false or fraudulent worker's compensation claim of any other suspected fraudulent activity on the part of an employer, employee, insurer, health care provider, or other person related to worker's compensation. If, based on the investigation, DWD has a reasonable basis to believe that theft, forgery, fraud, or any other criminal violation has occurred, DWD must refer the matter to the district attorney or DOJ for prosecution.

Self-insured employers

Election by governmental employer to self-insure. Under current law, every employer that is subject to the worker's compensation law must carry worker's compensation insurance from an insurer that is authorized to do business in this state (duty to insure), except that DWD may exempt an employer from the duty to insure if the employer shows that it can self-insure its worker's compensation liability and if the employer agrees to report all compensable injuries and to comply with the worker's compensation law and the rules of DWD. DWD rules, however, permit the state or a local governmental unit to self-insure without further order of DWD.

This bill codifies those DWD rules into the statutes. Specifically, the bill permits the state or a local governmental unit that has independent taxing authority (governmental employer) to elect to self-insure its worker's compensation liability without further order of DWD if the governmental employer agrees to report all compensable injuries and to comply with the worker's compensation law and the rules of DWD. Under the bill, a local governmental unit that elects to self-insure its liability for the payment of worker's compensation must notify DWD of that election in writing before commencing to self-insure that liability, must notify DWD of its intent to continue to self-insure that liability every three years after that initial notice, and must notify DWD of its intent to withdraw that election not less than 30 days before the effective date of that withdrawal.

Revocation of governmental employer election to self-insure. Current law permits DWD, after seeking the advice of the Self-Insurer's Council, to revoke an exemption from the duty to insure if DWD finds that the employer's financial condition is inadequate to pay its employees' claims for compensation, that the employer has received an excessive number of claims for compensation, or that the employer has failed to discharge faithfully its obligations according to the agreement contained in the application for exemption.

This bill permits DWD to revoke an election by a governmental employer to self-insure its liability for worker's compensation, without seeking the advice of the Self-Insurer's Council, if DWD finds that the governmental employer's financial condition is inadequate to pay its employees' claims for compensation, that the governmental employer has received an excessive number of claims for compensation, or that the governmental employer has failed to discharge faithfully its obligations under the worker's compensation law and the rules of DWD. Under the bill, once such an election is revoked, the governmental employer whose election is revoked may not elect to self-insure its liability for the payment of worker's compensation unless at least three calendar years have elapsed since the revocation and DWD finds that the governmental employer's financial condition is adequate to pay its employees' claims for compensation, that the governmental employer has not received an excessive number of claims for compensation, and that the governmental employer has faithfully discharged its obligations under the worker's compensation law and the rules of DWD.

Self-insured employer assessments. Current law establishes a self-insured employers liability fund, consisting of assessments paid into the fund by self-insured employers, that is used to pay the worker's compensation liability of current or former self-insured employers that cannot pay that liability. Under current law, on issuance of an order exempting an employer from the duty to insure, the exempt employer must pay into the fund an amount that is equal to the amount assessed upon each other exempt employer (initial assessment). Subsequent assessments, however, are prorated on the basis of the gross payroll for this state of the exempt employer, as reported to DWD for the previous calendar year for purposes of unemployment insurance.

This bill requires an initial assessment, as well as subsequent assessments, for the self-insurer's fund to be prorated on the basis of the gross payroll for this state of the exempt employer, as reported to DWD for the previous calendar year for purposes of unemployment insurance.

The bill also removes governmental employers from the coverage of the self-insurer's fund. Specifically, the bill prohibits DWD from: 1) requiring a governmental employer that elects to self-insure its liability for the payment of worker's compensation to pay into the self-insurer's fund; and 2) making payments from that fund for the liability under the worker's compensation law of such an employer, whether currently or formerly exempt from the duty to insure.

Study of light-duty programs

Under current law, temporary disability benefits are payable for loss of earnings during a period when an injured employee could return to a restricted type of work during the employee's healing period, unless suitable employment that is within the physical and mental limitations of the employee is furnished to the employee by the employee's employer or by some other employer. Currently, if the employee's employer or some other employer makes a good faith offer of suitable employment that is within the physical and mental limitations of the employee and if the employee refuses without reasonable cause to accept the offer, the employee is considered to have returned to work as of the date of the offer at the earnings the employee would have received but for the refusal.

This bill requires the secretary of workforce development to create a committee to study ways and means of encouraging employers to provide, and injured employees to participate in, light-duty programs under which injured employees who can return to restricted types of work during their healing periods are furnished with suitable employment that is within the physical and mental limitations of those employees. The study must include an examination of the types of physical and mental limitations that do not preclude a return to work during the healing period and the types of work that are suitable for injured employees who have those limitations. The committee must include representatives of employers, employees, worker's compensation insurers authorized to do business in this state, and DWD. Upon completion of the study, the committee must report its findings, conclusions, and recommendations to DWD and the Council on Worker's Compensation, after which the committee ceases to exist.

For further information see the state and local fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

SB456,1 Section 1. 20.445 (1) (ra) of the statutes, as affected by 2015 Wisconsin Act 55, is amended to read:

SB456,13,5 20.445 (1) (ra) Worker's compensation operations fund; administration. From the worker's compensation operations fund, the amounts in the schedule for the administration of the worker's compensation program by the department, for assistance to the department of justice in investigating and prosecuting fraudulent activity related to worker's compensation, for transfer to the uninsured employers fund under s. 102.81 (1) (c), and for transfer to the appropriation accounts under par. (rp) and s. 20.427 (1) (ra). All moneys received under ss. 102.28 (2) (b) and 102.75 shall be credited to this appropriation account. From this appropriation, an amount not to exceed $5,000 may be expended each fiscal year for payment of expenses for travel and research by the council on worker's compensation, an amount not to exceed $500,000 may be transferred in each fiscal year to the uninsured employers fund under s. 102.81 (1) (c), the amount in the schedule under par. (rp) shall be transferred to the appropriation account under par. (rp), and the amount in the schedule under s. 20.427 (1) (ra) shall be transferred to the appropriation account under s. 20.427 (1) (ra).

SB456,2 Section 2. 101.654 (2) (b) of the statutes is amended to read:

SB456,13,11 101.654 (2) (b) If the applicant is required under s. 102.28 (2) (a) to have in force a policy of worker's compensation insurance or if the applicant is self-insured in accordance with s. 102.28 (2) (b) or (bm), that the applicant has in force a policy of worker's compensation insurance issued by an insurer authorized to do business in this state or is self-insured in accordance with s. 102.28 (2) (b) or (bm).

SB456,3 Section 3. 102.01 (2) (d) of the statutes is amended to read:

SB456,13,18 102.01 (2) (d) "Municipality" includes a county, city, town, village, school district, sewer district, drainage district and long-term care district and "Local governmental unit" means a political subdivision of this state; a special purpose district or taxing jurisdiction, as defined in s. 70.114 (1) (f), in this state; an instrumentality, corporation, combination, or subunit of any of the foregoing; or any other public or quasi-public corporations corporation.

SB456,4 Section 4. 102.03 (1) (c) 3. of the statutes is amended to read:

SB456,14,5 102.03 (1) (c) 3. An employee is not performing service growing out of and incidental to his or her employment while going to or from employment in a private or group or employer-sponsored car pool, van pool, commuter bus service, or other ride-sharing program in which the employee participates voluntarily and the sole purpose of which is the mass transportation of employees to and from employment. An employee is not performing service growing out of and incidental to employment while engaging in a program, event, or activity designed to improve the physical well-being of the employee, whether or not the program, event, or activity is located on the employer's premises, if participation in the program, event, or activity is voluntary and, the employee receives no compensation for participation, and the program, event, or activity is outside the scope of the employee's employment.

SB456,5 Section 5. 102.03 (4) of the statutes is amended to read:

SB456,14,13 102.03 (4) The right to compensation and the amount of the compensation shall in all cases be determined in accordance with the provisions of law in effect as of the date of the injury except as to employees whose rate of compensation is changed as provided in ss. 102.43 (7) or s. 102.44 (1) or (5) or, before May 1, 2014 2018, as provided in s. 102.43 (5) (c) and employees who are eligible to receive private rehabilitative counseling and rehabilitative training under s. 102.61 (1m) and except as provided in s. 102.555 (12) (b).

SB456,6 Section 6. 102.03 (6) of the statutes is created to read:

SB456,14,19 102.03 (6) If an employee who suffers an injury outside the territorial limits of this state files a claim for compensation under the laws of another jurisdiction and that claim is denied on the merits by a final decision of that jurisdiction, the employee may not make a claim for compensation under the laws of this state for the same injury.