2015 - 2016 LEGISLATURE
December 18, 2015 - Introduced by Senators Stroebel and Kapenga, cosponsored
by Representatives Spiros, Knodl, Steffen, Murphy, Hutton, Duchow and
Kleefisch. Referred to Committee on Insurance, Housing, and Trade.
SB456,2,3
1An Act to renumber and amend 102.125, 102.18 (1) (b), 102.23 (1) (a), 102.28
2(2) (c), 102.28 (7) (b) and 102.42 (2) (a);
to amend 20.445 (1) (ra), 101.654 (2)
3(b), 102.01 (2) (d), 102.03 (1) (c) 3., 102.03 (4), 102.04 (1) (a), 102.04 (1) (b) 1.,
4102.04 (2m), 102.07 (1) (a), 102.07 (1) (b), 102.07 (3), 102.07 (7) (a), 102.07 (10),
5102.12, 102.125 (title), 102.13 (2) (b), 102.13 (2) (c), 102.16 (2) (d), 102.17 (1) (a)
63., 102.17 (4), 102.18 (3), 102.18 (4) (b), 102.21, 102.23 (1) (c), 102.23 (1) (cm),
7102.28 (2) (a), 102.28 (2) (b) (title), 102.28 (2) (c) (title), 102.28 (2) (d), 102.28 (7)
8(a), 102.29 (1) (b) 2., 102.31 (2) (b) 2., 102.315 (2), 102.42 (3), 102.425 (3) (b),
9102.425 (4) (a), 102.425 (4) (b), 102.425 (4m) (b), 102.43 (5) (c), 102.43 (7) (c) 1.,
10102.43 (7) (c) 2., 102.44 (1) (ag), 102.44 (1) (am), 102.44 (1) (b), 102.44 (3), 102.44
11(5) (intro.), 102.44 (5) (a), 102.44 (5) (c), 102.44 (5) (e), 102.58, 102.75 (1), 102.75
12(4), 102.81 (1) (a), 108.10 (4) and 165.60; and
to create 102.03 (6), 102.125 (2),
13102.127, 102.16 (2) (dm), 102.18 (7), 102.28 (2) (bm), 102.28 (2) (c) 2., 102.28 (7)
14(bm), 102.42 (2) (a) 2., 102.425 (3) (am), 102.43 (9) (e), 102.44 (4m), 102.44 (5)
1(h) and 102.44 (5m) of the statutes;
relating to: various changes to the worker's
2compensation law, granting rule-making authority, and making an
3appropriation.
Analysis by the Legislative Reference Bureau
This bill makes various changes to the worker's compensation law, as
administered by the Department of Workforce Development (DWD) and the Division
of Hearings and Appeal in the Department of Administration (DHA).
General coverage
Employers subject to worker's compensation law
Under current law, every person who usually employs three or more employees
for services performed in this state is subject to the worker's compensation law. This
bill provides that every person who at any time employs three or more employees for
services performed in this state is subject to the worker's compensation law and
specifies that a person becomes subject to that law on the day on which the person
employs three or more employees for services performed in this state.
Employee misrepresentation of physical condition
Under current law, an employee who is injured while performing services
growing out of and incidental to his or her employment may recover worker's
compensation for the injury.
This bill bars recovery of worker's compensation by an injured employee if: 1)
the employee knowingly and willfully made a false representation as to his or her
physical condition in an employment application; 2) the employer relied on the false
representation and that reliance was a substantial factor in the employer's decision
to hire the employee; and 3) there was a causal connection between the false
representation and the injury.
Worker's compensation denied by another state
Under current law, an employee who, while working outside the territorial
limits of this state, suffers an injury on account of which the employee would have
been entitled to worker's compensation under the laws of this state had the injury
occurred in this state is entitled to worker's compensation under the laws of this state
if: 1) the employee's employment is principally localized in this state; 2) the employee
is working under a contract of hire made in this state in employment that is not
principally localized in any state; 3) the employee is working under a contract made
in this state in employment principally localized in another state whose worker's
compensation law is not applicable to the employee's employer; 4) the employee is
working under a contract of hire made in this state in employment outside the United
States; or 5) the employee is a Wisconsin law enforcement officer acting under a
mutual aid agreement with a law enforcement agency of an adjacent state.
This bill provides that 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.
Employee wellness programs, events, or activities
Current law specifies that an employer is not liable for worker's compensation
when an employee sustains an injury while engaging in a program, event, or activity
designed to improve the employee's physical well-being, if participation in the
program, event, or activity is voluntary and uncompensated.
This bill, in addition, requires the program, event, or activity to be outside the
scope of the employee's employment duties.
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.