By Misha Lee, IIAW Government Affairs

Governor Tony Evers officially signed the 2025-27 biennial state budget bill (2025 WI Act 15) into law on Thursday, July 3rd only hours after the Republican controlled Legislature sent him the bill for his signature. The comprehensive $111.1 billion plan represents a 12 percent increase in spending and includes several provisions directly impacting the IIAW membership and insurance industry. 

The budget's passage came swiftly after the state’s fiscal year ended on June 30. With new legislative maps creating tighter margins in the Senate (Republicans holding an 18-15 majority), securing bipartisan support for the budget was a significant challenge. Ultimately, a deal was struck on July 1st after intense, on-and-off negotiations over six weeks, with the Senate Democratic leader playing a crucial role in the final discussions with Republican legislative leaders.

Here’s a breakdown of key insurance related provisions included in the budget bill: 

Insurance Fraud Paralegal Position

The Office of the Commissioner of Insurance (OCI) will receive a new paralegal-advanced position to bolster its fraud investigation activities. This addition complements a full-time attorney position approved in the previous budget, reinforcing the state's commitment to fighting insurance fraud. 

New Driver Education Grants Program

A significant win for the industry, the budget establishes a new, ongoing driver’s education grants program. The Wisconsin Department of Transportation (DOT) will receive $6 million annually from OCI for this initiative. This funding, previously lapsed to the state’s general fund, reflects the insurance industry's dedication to improving driver education resources for young drivers. 

Sales and Use Tax Exemption for Information Products

A crucial provision exempts certain information products from state sales and use tax. This applies to reports, statistics, records, and other data used exclusively by certified insurance companies or licensed insurance intermediaries for quoting, underwriting, risk assessment, rate setting, or claims adjustment. This exemption covers items purchased by insurers or affiliates, transferred in tangible or digital form, and charged transactionally or via subscription. This measure is estimated to save the insurance industry approximately $8 million in 2025-26 and $10.9 million in 2026-27, rectifying what the industry viewed as incorrect tax collection by the Wisconsin Department of Revenue (DOR). 

Worker’s Compensation Hospital Service Fee Schedule

The budget introduces a new fee schedule specifically for hospital services related to Worker’s Compensation claims. This schedule applies if the service is from an eligible hospital, qualifies for Medical Assistance program reimbursement, and is paid within the specified period. The Wisconsin Department of Workforce Development (DWD) Worker’s Compensation Division will oversee the implementation of this complex provision, a key priority for Wisconsin Manufacturers and Commerce (WMC). 

Beyond these insurance-specific items, the broader budget agreement also addresses a range of other state priorities, including: 

Tax Cuts: $1.5 billion in income tax cuts, primarily benefiting the middle class, by expanding the second lowest income tax bracket, making the first $24,000 of retirement income tax-free for those 67 and older, and eliminating the 5% sales tax on electricity. 

Child Care Investment: Over $330 million dedicated to the child care industry, including the state’s first-ever state-funded child care program using general purpose revenue. 

K-12 Education: Nearly $1.4 billion increase in spendable revenue for K-12 schools, raising the special education reimbursement rate to 42% in the first year and 45% in the second year. 

Universities of Wisconsin (UW System): An increase of over $256 million for the UW System. 

Transportation Funding: An additional $200 million for transportation through various fee increases. 

Medicaid and Hospitals: $1.4 billion to cover Medicaid costs and an increase in the hospital assessment from 1.8% to 6%, generating over $1 billion in additional annual funds for hospitals. The state will retain 30% of matching federal funds for Wisconsin’s Medicaid trust fund. 

The budget brings both opportunities and operational adjustments for insurance professionals across the state. Staying informed about these changes is crucial for navigating the evolving regulatory and economic landscape.