SB456: Bill Text

LRB-3672/1

GMM:kjf

2015 - 2016 LEGISLATURE

2015 Senate BILL 456

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 An Act to renumber and amend 102.125, 102.18 (1) (b), 102.23 (1) (a), 102.28 (2) (c), 102.28 (7) (b) and 102.42 (2) (a); to amend 20.445 (1) (ra), 101.654 (2) (b), 102.01 (2) (d), 102.03 (1) (c) 3., 102.03 (4), 102.04 (1) (a), 102.04 (1) (b) 1., 102.04 (2m), 102.07 (1) (a), 102.07 (1) (b), 102.07 (3), 102.07 (7) (a), 102.07 (10), 102.12, 102.125 (title), 102.13 (2) (b), 102.13 (2) (c), 102.16 (2) (d), 102.17 (1) (a) 3., 102.17 (4), 102.18 (3), 102.18 (4) (b), 102.21, 102.23 (1) (c), 102.23 (1) (cm), 102.28 (2) (a), 102.28 (2) (b) (title), 102.28 (2) (c) (title), 102.28 (2) (d), 102.28 (7) (a), 102.29 (1) (b) 2., 102.31 (2) (b) 2., 102.315 (2), 102.42 (3), 102.425 (3) (b), 102.425 (4) (a), 102.425 (4) (b), 102.425 (4m) (b), 102.43 (5) (c), 102.43 (7) (c) 1., 102.43 (7) (c) 2., 102.44 (1) (ag), 102.44 (1) (am), 102.44 (1) (b), 102.44 (3), 102.44 (5) (intro.), 102.44 (5) (a), 102.44 (5) (c), 102.44 (5) (e), 102.58, 102.75 (1), 102.75 (4), 102.81 (1) (a), 108.10 (4) and 165.60; and to create 102.03 (6), 102.125 (2), 102.127, 102.16 (2) (dm), 102.18 (7), 102.28 (2) (bm), 102.28 (2) (c) 2., 102.28 (7) (bm), 102.42 (2) (a) 2., 102.425 (3) (am), 102.43 (9) (e), 102.44 (4m), 102.44 (5) (h) and 102.44 (5m) of the statutes; relating to: various changes to the worker's compensation law, granting rule-making authority, and making an appropriation.

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.