AB565: Bill Text

LRB-4018/1

GMM:jlg&kaf:jf

1997 - 1998 LEGISLATURE

1997 Assembly BILL 565

October 17, 1997 - Introduced by Representatives Vrakas and Vander Loop, cosponsored by Senators Plache and Zien. Referred to Committee on Labor and Employment.

AB565,1,11 An Act to amend 20.445 (3) (jb), 102.07 (8) (b) 2., 102.07 (12m), 102.076 (1), 102.077 (3), 102.11 (1) (intro.), 102.11 (1) (d), 102.13 (1) (a), 102.13 (1) (b) (intro.), 102.13 (1) (b) 1., 102.13 (1) (b) 3., 102.13 (1) (b) 4., 102.13 (1) (d) 1., 102.13 (1) (d) 2., 102.13 (1) (d) 3., 102.13 (1) (d) 4., 102.13 (2) (a), 102.13 (2) (b), 102.13 (3), 102.16 (2) (a), 102.16 (2) (b), 102.16 (2) (d), 102.16 (2) (f), 102.16 (2m) (a), 102.16 (2m) (b), 102.16 (2m) (e), 102.16 (3), 102.17 (1) (e), 102.17 (1) (g), 102.28 (3) (a) (intro.), 102.28 (3) (a) 4., 102.28 (3) (b) 4., 102.28 (3) (c), 102.28 (3) (d), 102.29 (3), 102.29 (8), 102.29 (9), 102.42 (2) (a), 102.42 (6), 102.82 (1) and 102.83 (8); to repeal and recreate 102.42 (2) (a); and to create 49.124 (1m) (d), 102.04 (2m), 102.16 (1m), 102.18 (1) (bg) and 102.29 (8r) of the statutes; relating to: various changes to the worker's compensation law.

Analysis by the Legislative Reference Bureau

This bill makes various changes relating to worker's compensation, as administered by the department of workforce development (DWD), as follows:

General coverage

Current law defines a "temporary help agency" as an employer who places its employes with or leases its employes to another employer who controls the employe's work activities and compensates the temporary help agency for the employe's services, regardless of the duration of the services. Under current law, no employe of a temporary help agency who makes a claim for worker's compensation against the temporary help agency may make a claim or maintain an action in tort against any employer who compensates the temporary help agency for the employe's services.

This bill specifies that for purposes of worker's compensation a temporary help agency is the employer of an employe whom the temporary help agency has placed with or leased to another employer that compensates the temporary help agency for the employe's services, that a temporary help agency is liable for all worker's compensation payable to that employe and that a temporary help agency may not seek or receive reimbursement from another employer for any payments made as a result of that liability.

Under current law, in general, every person who usually employs 3 or more employes and every person who usually employs less than 3 employes, but who has paid wages of $500 or more in any calendar quarter for services performed in this state is subject to the worker's compensation law. Current law, however, permits not more than 2 officers of a corporation having not more than 10 stockholders to elect not to be subject to the worker's compensation law. Currently, the election is made by an endorsement on the policy of worker's compensation insurance issued to the corporation naming each officer who has so elected and is effective for the period of the policy. This bill permits an officer of such a corporation that has been issued a policy of worker's compensation insurance to elect not to be subject to the worker's compensation law and not to be covered under the policy at any time during the period of the policy. The bill also provides that such an election may not be reversed during the period of the policy.

Under current law, subject to certain exceptions, every employer must pay worker's compensation to an employe who sustains an injury while performing services growing out of an incidental to his or her employment. Current law, however, permits DWD to exempt an employer from the duty to pay worker's compensation to certain employes who belong to a religious sect whose tenets or teachings oppose accepting the benefits of any public or private insurance that pays benefits in the event of death, disability, old age or retirement or that makes payments towards the cost of medical care, for example, the Amish. Under current law, an employer applying for this exemption must submit certain information to DWD including proof of the financial ability of the religious sect to provide financial and medical assistance to an injured employe who belongs to the religious sect.

This bill eliminates the requirement that a religious sect establish proof of its financial ability to provide that assistance.

Current law defines certain persons as "employes" for purposes of coverage under the worker's compensation law. Currently, an independent contractor is, for purposes of the worker's compensation law, an employe of any employer that is subject to the worker's compensation law for whom the independent contractor is performing services in the course of the employer's trade, business, profession or occupation at the time of the injury, except that an independent contract is not an employe of an employer for whom the independent contractor performs work or services if the independent contractor meets certain conditions. One of those conditions is that the independent contractor holds or has applied for a federal employer identification number. This bill changes that condition so that an independent contractor is not an employe if the independent contractor holds or has applied for an employer identification number with the federal internal revenue service or has filed business or self-employment income tax returns with the federal internal revenue service based on the independent contractor's work or services in the previous year.

Currently, a student of a public school or a private school, while he or she is engaged in performing services as part of a school work training, work experience or work study program, who is not on the payroll of an employer that is providing the work training or work experience or who is not otherwise receiving compensation on which a worker's compensation carrier could assess premiums on that employer, is an employe of a school district or private school that elects to name the student as an employe for purposes of worker's compensation coverage. Also, under current law, a student who is named as an employe of a school district or private school for purposes of worker's compensation coverage and who makes a claim for worker's compensation against his or her school district or private school may not also make a claim for worker's compensation or maintain an action in tort against the employer that provided the work training or work experience from which the claim arose. Currently, these provisions do not apply to injuries occurring after December 31, 1997. This bill extends that expiration date to December 31, 1999.

Similarly, under current law, a participant in a work experience component of a job opportunities and basic skills (JOBS) program under the aid to families with dependent children (AFDC) program who, under the JOBS program, is considered to be an employe of the agency administering the JOBS program or who, under the JOBS program, is provided worker's compensation coverage by the person administering the community work experience component of the JOBS program, and who makes a claim for worker's compensation against that agency or person may not also make a claim for worker's compensation or maintain an action in tort against the employer that provided the work experience from which the claim arose. Currently, this provision does not apply to injuries occurring after December 31, 1997. This bill extends that expiration date to February 28, 1998, as the AFDC program no longer applies in this state beginning on March 1, 1998.

The bill also extends similar coverage to a participant in the food stamp employment and training (FSET) program. Specifically, under the bill, a participant in a FSET program administered by DWD or a Wisconsin works agency is an employe of DWD for the Wisconsin works agency for purposes of worker's compensation coverage, except to the extent that the person for whom the participant is performing work provides that coverage. Also under the bill, a participant in a FSET program who is provided worker's compensation coverage by DWD or a Wisconsin works agency and who makes a claim for worker's compensation may not also make a claim for worker's compensation or maintain an action in tort against the employer who provided the employment and training from which the claim arose.

Examinations and treatment

Under current law, whenever an employe claims worker's compensation, the employe must, on the request of his or her employer or the employer's worker's compensation carrier, submit to reasonable examinations by physicians, chiropractors, psychologists or podiatrists (practitioners) provided and paid for by the employer or insurer. Currently, an employe is entitled to have a practitioner provided by himself or herself present at the examination and to request and receive a copy of all reports of the examination. Also, under current law, any practitioner who is present at an employe's examination may be required to testify as to the results of the examination and any practitioner who attends a worker's compensation claimant for any condition or complaint that is reasonably related to the condition for which the claimant claims compensation may be required to testify before DWD. In addition, under current law, any practitioner who attends a worker's compensation claimant for any condition or complaint that is reasonably related to the condition for which the claimant claims compensation may, notwithstanding the confidentiality of medical and mental health records, furnish information and reports relative to the claim to the employe, employer, worker's compensation insurer or DWD and, notwithstanding that confidentiality, shall, within a reasonable time after written request and upon payment of the actual cost of preparation and postage, provide that person with any information or written material that is reasonably related to the claim. Moreover, under current law, if 2 or more practitioners disagree as to the extent of an injured employe's temporary disability, the end of the employer's healing period, the employe's ability to return to work or the necessity for further treatment or for a particular type of treatment, DWD may appoint another practitioner to examine the employe and render an opinion. Finally, under current law, if the testimony presented at a hearing indicates a dispute or creates a doubt as to the extent or cause of an employe's disability or death, DWD may direct that the injured employe be examined or that an autopsy be performed, or that an opinion be obtained, by an impartial, competent practitioner.

This bill includes dentists among the practitioners to which the provisions of current law relating to examination and treatment of an injured employe apply. The bill also eliminates the requirement that an employe must request a copy of the report of his or her examination in order to receive it and instead entitles the employe to receive a copy of such a report immediately upon receipt of the report by the employer or worker's compensation insurer.

Under current law, subject to certain exceptions, when an employer has notice of an employe's injury and its relationship to the employe's employment, the employer must offer to the employe his or her choice of any practitioner licensed to practice in this state and practicing in this state for treatment of the injury. Currently, an employe may choose a practitioner not licensed in this state only with the agreement of the employer or worker's compensation insurer. Recently, the Supreme Court, in UFE, Inc. v. LIRC, 201 Wis. 2d 274 (1986), held, however, that an employer or worker's compensation insurer is liable for treatment provided by an out-of-state practitioner if the treatment is provided on the referral of an in-state practitioner and not by choice of the injured employe.

This bill reverses the UFE holding. Under the bill, until January 1, 2000, an employer or worker's compensation insurer is not liable for treatment provided by an out-of-state practitioner on referral from an in-state practitioner unless the employer or insurer agrees to be liable for that treatment. The bill also requires an employer to offer to an injured employe his or her choice of any dentist licensed to practice and practicing in this state for treatment of the employe's injury.

Hearings and procedures

Current law provides a procedure, separate from the procedure provided for resolving a disputed claim for worker's compensation, under which DWD has jurisdiction to resolve a dispute between a health service provider and an insurer or self-insured employer over the reasonableness of any health service fee charged by the health service provider for services provided to an injured employe who claims worker's compensation benefits or over the necessity of any treatment provided to an injured employe who claims worker's compensation benefits. Under that procedure, DWD must deny payment of a fee that DWD determines to be unreasonable or payment for any treatment that DWD determines to be unnecessary and the health service provider and insurer or self-insurer that are parties to the dispute are bound by that determination unless the determination is set aside on judicial review. Under the procedure, an insurer or self-insurer that disputes the reasonableness of a fee charged by a health service provider or the necessity of any treatment provided by a health service provider must provide reasonable notice to the health service provider that the fee or the necessity of the treatment is in dispute and, after receiving that notice, the health service provider may not collect the fee from, or bring a collection action against, the employe who received the services or treatment that is the subject of the dispute.

This bill permits DWD to resolve a fee dispute or a necessity of treatment dispute not only under the specific procedure provided for resolving those types of disputes, but also under the general procedure under which DWD resolves a disputed claim for worker's compensation. Specifically, if after a hearing on a disputed claim for worker's compensation, DWD finds that an insurer or self-insured employer is liable for any health services or treatment provided to an injured employe by a health service provider, but that the reasonableness of the fee for those services or the necessity of that treatment is in dispute, DWD may include in its order a determination as to the reasonableness of the fee or the necessity of the treatment or DWD may notify, or direct the insurer or self-insured employer to notify, the health service provider under the fee dispute or necessity of treatment dispute procedure that the reasonableness of the fee or the necessity of the treatment is in dispute. Similarly, if an insurer or self-insured employer concedes under a compromise agreement or stipulation that the insurer or self-insured employer is liable for any health services or treatment provided to an injured employe by a health service provider, but disputes the reasonableness of the fee for those services or the necessity of that treatment, DWD may include in its order confirming the compromise agreement or stipulation a determination as to the reasonableness of the fee or the necessity of the treatment or DWD may notify, or direct the insurer or self-insured employer to notify, the health service provider under the fee dispute or necessity of treatment dispute procedure that the reasonableness of the fee or the necessity of the treatment is in dispute. Under the bill, DWD must deny payment of a fee that DWD determines after a hearing or on confirming a compromise agreement or stipulation to be unreasonable or payment for any treatment that DWD determines after a hearing or on confirming a compromise agreement or stipulation to be unnecessary and the health service provider and insurer or self-insured employer are bound by that determination unless the determination is set aside, reversed or modified by DWD or by the labor and industry review commission (LIRC) or is set aside on judicial review. Under the bill, after receiving notice from DWD or from an insurer or self-insured employer that the reasonableness of a fee or the necessity of any treatment is in dispute, the health service provider may not collect the fee from, or bring a collection action against, the employe who received the services or treatment that is the subject of the dispute.

Under current law, DWD retains jurisdiction for 21 days after the date on which a copy of a hearing examiner's order is mailed to the parties to a disputed claim for worker's compensation to set aside, reverse or modify that order. Similarly, under current law, LIRC retains jurisdiction for 28 days after the date on which a decision of LIRC is mailed to the parties to a disputed claim for worker's compensation to set aside the decision for further consideration. This bill permits DWD to retain jurisdiction for 30 days after a determination of DWD under the fee dispute or necessity of treatment dispute procedure is made to set aside, reverse or modify that determination.

Uninsured employers

Under current law, if an employer is not insured or self-insured as required by the worker's compensation law, the employer is liable to DWD for certain payments which are deposited in the uninsured employers fund and used by DWD to pay benefits to the injured employes of uninsured employers. Currently, if DWD pays benefits to an injured employe of an uninsured employer, the uninsured employer must reimburse DWD in the amount of benefits paid, less any amounts that the employe repays to DWD from any compensation recovered by the employe from the employer or a 3rd party. This bill requires an uninsured employer to reimburse DWD for any benefits paid to an employe of the uninsured employer within 30 days after the date on which DWD notifies the uninsured employer that the reimbursement is owed. Under the bill, interest on amounts not paid when due accrues at the rate of 1% per month.

Under current law, if an uninsured employer fails to pay an amount owed to DWD and no appeal or other proceeding for review is pending and the time for taking an appeal has expired, DWD may issue a warrant to the clerk of circuit court of any county in the state and the clerk of circuit court must docket the warrant, which gives the warrant the effect of a final judgment. Currently, if an uninsured employer that is a corporation is unable to pay the amounts specified in a warrant, an officer or director of the corporation may be found personally liable for that payment. This bill extends to the members and managers of an uninsured employer that is a limited liability company and that is unable to pay the amount specified in a warrant issued by DWD personal liability for that payment.

Compensation amounts

The bill sets the average weekly earnings and maximum compensation rates for permanent partial disability for injuries occurring on or after January 1, 1998, and on or after January 1, 1999, but before January 1, 2000. For injuries occurring during calendar year 1998, the average weekly earnings are not more than $268.50, resulting in a maximum compensation rate of $179. For injuries occurring during calendar year 1999, the average weekly earnings are not more than $276, resulting in a maximum compensation rate of $184.

The bill also sets the average weekly earnings and maximum compensation rates for temporary disability, permanent total disability and death benefits for injuries occurring on or after January 1, 1998, and on or after January 1, 1999. For injuries occurring during calendar year 1998, the average weekly earnings are not more than $784.50, resulting in a maximum compensation rate of $523. For injuries occurring on or after January 1, 1999, the average weekly earnings are not more than $807, resulting in a maximum compensation rate of $538.

Under current law, within those limits, the average weekly earnings of an injured employe may not be less than the actual average weekly earnings of the injured employe for the 4 calendar quarters before the employe's injury within which the employe has been employed in the business, in the kind of employment and for the employer for whom the employe worked when injured. This bill changes the period in which an injured employe's average weekly earnings are calculated to the 52 calendar weeks before the employe's injury.

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:

AB565, s. 1 Section 1. 20.445 (3) (jb) of the statutes is amended to read:

AB565,8,2 20.445 (3) (jb) Fees for administrative services. All moneys received from fees charged for providing state mailings, special computer services, training programs, worker's compensation coverage for persons participating in employment and training programs under ch. 49, printed materials and publications relating to economic support, for the purpose of providing state mailings, special computer services, training programs, worker's compensation coverage for persons participating in employment and training programs under ch. 49, printed materials and publications relating to economic support.

AB565, s. 2 Section 2. 49.124 (1m) (d) of the statutes is created to read:

AB565,8,12 49.124 (1m) (d) A participant in an employment and training program under this section administered by the department is an employe of the department for purposes of worker's compensation coverage, except to the extent that the person for whom the participant is performing work provides worker's compensation coverage. A participant in an employment and training program under this section administered by a Wisconsin works agency is an employe of the Wisconsin works agency for purposes of worker's compensation coverage, except to the extent that the person for whom the participant is performing work provides worker's compensation coverage.

AB565, s. 3 Section 3. 102.04 (2m) of the statutes is created to read:

AB565,8,21 102.04 (2m) A temporary help agency is the employer of an employe whom the temporary help agency has placed with or leased to another employer that compensates the temporary help agency for the employe's services. A temporary help agency is liable under s. 102.03 for all compensation payable under this chapter to that employe, including any payments required under s. 102.16 (3), 102.18 (1) (b) or (bp), 102.22 (1), 102.35 (3), 102.57 or 102.60. Except as permitted under s. 102.29, a temporary help agency may not seek or receive reimbursement from another employer for any payments made as a result of that liability.

AB565, s. 4 Section 4. 102.07 (8) (b) 2. of the statutes is amended to read:

AB565,9,2 102.07 (8) (b) 2. Holds or has applied for a federal employer identification number with the federal internal revenue service or has filed business or self-employment income tax returns with the federal internal revenue service based on that work or service in the previous year.

AB565, s. 5 Section 5. 102.07 (12m) of the statutes is amended to read:

AB565,9,11 102.07 (12m) A student of a public school, as described in s. 115.01 (1), or a private school, as defined in s. 115.001 (3r), while he or she is engaged in performing services as part of a school work training, work experience or work study program, and who is not on the payroll of an employer that is providing the work training or work experience or who is not otherwise receiving compensation on which a worker's compensation carrier could assess premiums on that employer, is an employe of a school district or private school that elects under s. 102.077 to name the student as its employe. This subsection does not apply after December 31, 1997 1999.

AB565, s. 6 Section 6. 102.076 (1) of the statutes is amended to read:

AB565,9,22 102.076 (1) Not more than 2 officers of a corporation having not more than 10 stockholders may elect not to be subject to this chapter. If the corporation has been issued a policy of worker's compensation insurance, an officer of the corporation may elect not to be subject to this chapter and not to be covered under the policy at any time during the period of the policy. Except as provided in sub. (2), the election shall be made by an endorsement, on the policy of worker's compensation insurance issued to that corporation, naming each officer who has so elected. The election is effective for the period of the policy and may not be reversed during the period of the policy. An officer who so elects is an employe for the purpose of determining whether the corporation is an employer under s. 102.04 (1) (b).

AB565, s. 7 Section 7. 102.077 (3) of the statutes is amended to read: