There are no proposed or existing federal statutes or rules related to the proposed rule.
Summary of comments on the statement of scope and description of how the comments were taken into account in drafting the rule
A preliminary hearing on the Statement of Scope for the proposed rule, SS 113-23, and on Statements of Scope for other worker's compensation rules, SS 114-23 and SS 115-23, was held on January 16, 2024. Ms. Rachel Ver Velde, Director of Workforce, Education & Employment Policy for Wisconsin Manufacturers and Commerce, appeared at the hearing. Ms. Ver Velde currently serves as a member of the Worker's Compensation Advisory Council representing employers. At the hearing she expressed a concern that the Department should have discussed the Statements of Scope with the Worker's Compensation Advisory Council for input before they are finalized. There were no comments received in writing prior to or following the preliminary hearing.
Agency response: The rules proposed in SS 113-23, SS 114-23 and SS 115-23 pertaining to the Wisconsin worker's compensation system were periodically discussed at the Worker's Compensation Advisory Council meetings. At meetings of the Worker's Compensation Advisory Council on June 8, 2021, and February 23, 2023, Department staff provided an update about the status of proposed rules including this rule. The Department will present proposed rules to the Worker's Compensation Advisory Council for review, input, and approval before they are finalized. Comparison with rules in adjacent states
Illinois. Assessment for unpaid claims of insolvent self-insured employers. The Illinois Self-Insurers Security Fund is responsible to pay the full amount due for worker's compensation obligations owed by insolvent private self-insured employers. Illinois statutory law requires self-insured employers to pay assessments to the Self-Insurers Security Fund up to a maximum of 1.2 percent annually based on the amount of compensation payments not including medical expenses. 820 ILCS 305/4a-7. Public entities that are self-insured are not required to pay the assessment. The Illinois rule that applies to the administration of claims against the Self-Insurers Security Fund, 50 Ill. Admin. Code s. 9100.80, is similar to s. DWD 80.40 and covers the process to be followed for finding that a self-insured employer is unable to pay benefits and for the initial and further assessments for the fund. This rule does not apply to self-insured public entities. Self-insurance for the state and local governmental units that have independent taxing authority. The Illinois Workers' Compensation Commission is the agency that administers the approval of employers to be self-insured for worker's compensation liability. The Illinois rule that covers the requirements for private entities to become self-insured for worker's compensation liability, 50 Ill. Admin. Code 9100.40, provides for a similar application process to that used in Wisconsin, but the Illinois rule establishes a more regulated and complex process, especially for submitting financial statements and criteria for evaluating an employer's financial strength for determining the amount of security to be provided in the form of excess insurance and surety bonds. The Illinois rule does not apply to the State of Illinois, political subdivisions, units of local government, school districts, public authorities, or quasi-governmental bodies. Illinois statutory law authorizes local public entities to self-insure for worker's compensation liability provided they comply with other statutory requirements and file a report with the Illinois Workers' Compensation Commission indicating an election to self-insure. 745 ILCS 10/9-103. Approval from the Illinois Workers' Compensation Commission is not required for local public entities to become self-insured. There are no administrative rules in Illinois covering self-insurance by the state, political subdivisions, school districts, public authorities, or quasi-governmental bodies.
Registration with agency regulating financial institutions. No similar rules.
Reasonableness of fee disputes. Reasonableness of fee disputes for treatment provided to injured employees are determined by a worker's compensation medical fee schedule. In Illinois, there is no reasonableness of fee dispute resolution process comparable to s. 102.16 (2), Stats., and s. DWD 80.72. There are no similar rules. Iowa. Assessment for unpaid claims of insolvent self-insured employers. There is no fund that pays the worker's compensation obligations of insolvent private self-insured employers in Iowa. There are no similar rules.
Self-insurance for the state and local governmental units that have independent taxing authority. The Iowa Insurance Division is the agency with regulatory authority over the approval of self-insurance by employers for worker's compensation liability. The administrative rules that cover the self-insurance authorization process for individual private employers are set forth at 191 IAC ch. 57. One of those rules, s. 191 IAC 57.1 (4), provides that the State of Iowa is not required to obtain authorization for self-insurance, but other political subdivisions in the state are required to comply with the rules, except for the requirement to obtain an annual surety bond. The rules provide for a more regulated process compared to Wisconsin for political subdivisions to become and remain self-insured for worker's compensation liability. Examples of the additional regulation for political subdivisions include the requirements to file an initial application and annual renewal applications, to obtain excess insurance, and to submit a financial statement on an annual basis on a prescribed form from the Commissioner of the Iowa Insurance Division. Registration with agency regulating financial institutions. No similar rules.
Reasonableness of fee disputes. In Iowa there is no reasonableness of fee dispute resolution process comparable to s. 102.16 (2), Stats., and s. DWD 80.72. There are no similar rules.
Michigan. Assessment for unpaid claims of insolvent self-insured employers. The Michigan Self-Insurer's Security Fund provides worker's compensation benefits to employees of self-insured employers who become insolvent. Assessments for the fund are paid by private self-insured employers. Assessments are statutorily capped at three percent per calendar year. Mich. Comp. Laws s. 418.551 (4). Public employers who are self-insured for worker's compensation in Michigan are not covered by this fund. There are no administrative rules in Michigan for the creation of the Self-Insurer's Security Fund, but there are rules that apply to administration. Mich. Admin. Code R. 408.43q provides that financial guarantees posted with the agency may be used to pay claims when the fund is triggered. This rule is similar to Wisconsin's rules. Mich. Admin. Code R. 408.43k provides that both specific and aggregate excess liability insurance policies continue to be responsible for payment when retention levels have been met. This rule differs from Wisconsin's rules because excess liability insurance policies in Wisconsin have no further responsibility for payment when retention levels have been met. Self-insurance for the state and local governmental units that have independent taxing authority. In Michigan, the self-insurance program is administered by the Workers' Disability Compensation Agency. Mich. Admin. Code R. 408.43 to 408.43t are the administrative rules that cover the self-insurance approval process for private employers and political subdivisions. The Michigan rules provide for a more regulated process for political subdivisions to be approved for self-insurance compared to Wisconsin's rules. Examples include the requirements under the Michigan rules that political subdivisions obtain excess insurance and file renewal applications with the agency to continue to be self-insured for worker's compensation liability.
Registration with agency regulating financial institutions. No similar rules.
Reasonableness of fee disputes. Reasonableness of fee disputes for treatment provided to injured employees are determined by a worker's compensation medical fee schedule. In Michigan there is no reasonableness of fee dispute resolution process comparable to s. 102.16 (2), Stats., and s. DWD 80.72. There are no similar rules. Minnesota. Assessment for unpaid claims of insolvent self-insured employers. The Minnesota Self-Insurers' Security Fund is a non-profit corporation that is authorized by Minnesota Statutes, ch. 79A. The purpose of the Self-Insurers' Security Fund is to guarantee that when a private self-insured employer becomes insolvent or bankrupt, injured employees will continue to have their worker's compensation benefits paid. All private employers who are self-insured for worker's compensation liability in Minnesota are members of this fund. Minnesota Statutes, section 79A.12, subd. 2, provides the Self-Insurers' Security Fund may assess each of the members a pro rata share of the funding necessary to carry out its obligations, and that the total annual assessments in any calendar year shall not exceed ten percent of paid indemnity losses made by the self-insured employer during the preceding calendar year. The State of Minnesota and its political subdivisions are not included in this fund. There are no administrative rules that apply to the operation of this fund.
Self-insurance for the state and local governmental units that have independent taxing authority. The Minnesota Department of Commerce administers the worker's compensation self-insurance program. Minnesota Statutes, s. 79A.01, subd. 6, provides the State of Minnesota and its political subdivisions are not included in the definition of a private employer. Minnesota Rules, parts 2780.1100 to 2780.1800, cover the approval process for private employers to become self-insured for worker's compensation liability. The Minnesota rules provide for a similar application process including requirements for filing of financial reports, agreeing to pay benefits, providing additional security from cash or bonds, and maintaining excess insurance. The Minnesota rules differ from the Wisconsin rules to require private self-insured employers to have and maintain a specific net worth amount. The Minnesota rules do not apply to the state and its political subdivisions.
Registration with agency regulating financial institutions. No similar rules.
Reasonableness of fee disputes. Reasonableness of fee disputes for treatment provided to injured employees are determined by a worker's compensation medical fee schedule. In Minnesota, there is no reasonableness of fee dispute resolution process comparable to s. 102.16 (2), Stats., and s. DWD 80.72. There are no similar rules. Summary of factual data and analytical methodologies
Proposed rule changes were developed after consultation with the Self-Insurers Council and the Worker's Compensation Advisory Council. Development of this proposed rule did not involve the gathering, analysis, or use of data. Therefore, s. 227.14 (2m), Stats., does not apply to this rulemaking. Analysis and supporting documents used to determine effect on small business or in preparation of the economic impact analysis
The proposed rule does not have an economic impact on small business as defined in s. 227.114 (1), Stats., and no analysis is needed. The purpose of the proposed rule changes is to update the rules to conform to previously enacted statutory changes. Effect on small business
The proposed rule does not have an effect on small business.
Agency contact person
James T. O'Malley, Director, Bureau of Legal Services
Department of Workforce Development
Worker's Compensation Division
P.O. Box 7901
Madison, WI 73707-7901
Telephone: (608) 267-6704
Place where comments are to be submitted and deadline for submission
Comments may be submitted to the contact person shown above. Information as to the place, date, and time of the public hearing, as well as the deadline for submitting comments, will be published in the Wisconsin Administrative Register.
Text of Proposed Rule
Section 1. DWD 80.40 (intro.) is amended to read:
DWD 80.40 (intro.) If an employer currently or formerly exempted from the duty to insure by written order of the department under s. 102.28 (7) (2) (b), Stats., is unable to pay any award and if judgement is rendered in accordance with s. 102.20, Stats., against such that employer and is returned unsatisfied in whole or in part, the department shall determine payment into the fund established by s. 102.28 (8), Stats., as follows: Section 2. DWD 80.40 (1) is amended to read:
DWD 80.40 (1) The department shall prepare an estimate of the payments that should be made by the insolvent exempt employer due for a the period of up to the date of the order from the department and for one year following the date of the order. If the department elects to retain an insurance carrier or insurance service organization under s. 102.28 (7) (c), Stats., the department will prepare an estimate of the charges that will be made by such carrier or organization to process, investigate and pay such claims for the same one year period. The sum of these 2 amounts shall be divided by the total number of employers exempted under s. 102.28 (2) (b), Stats prorated on the basis of the gross payroll for this state of each exempt employer as reported to the department for the previous calendar year for unemployment insurance purposes under ch. 108, Stats., or, if an exempt employer is not covered under ch. 108, on the basis of the comparable gross payroll for the exempt employer as determined by the department. Section 3. DWD 80.40 (4) is amended to read:
DWD 80.40 (4) At least annually For any further assessment following the original initial order the department shall estimate the amount due and payable during the following year and the charges expected from any insurance carrier or claims insurance service organization for such year and assess and order payment by each such exempt employer its pro rata share determined as provided by s. 102.28 (7) (b), Stats. Section 4. DWD 80.40 (6) is amended as to read:
DWD 80.40 (6) All money due and payable to injured employees which remain unpaid shall be considered money payable during the following year in for making future estimates.
Section 5. DWD 80.40 (8) is created to read:
DWD 80.40 (8) The department may not require the state or any local governmental unit that has independent taxing authority that elected to be self-insured under s. 102.28 (2) (bm), Stats., to make any payments into the fund established under s. 102.28 (8), Stats., or for that fund to make any payments for the liability of the state or any local governmental unit that has independent taxing authority under ch. 102, Stats. Section 6. DWD 80.60 (1) (g) is amended to read:
DWD 80.60 (1) (g) "Self-insurance" means exemption from the duty to insure, as provided in s. 102.28 (2) (b) and (bm), Stats. Section 7. DWD 80.60 (3) (title) is amended to read:
DWD 80.60 (3) (title) Requirements for the state and its political subdivisions local governmental units that have independent taxing authority.
Section 8. DWD 80.60 (3) (a) is amended to read:
