By: MIsha Lee | IIAW Lobbyist

This article was originally published in the May 2022 Wisconsin Independent Agent. 

Governor Tony Evers signed 2021 Wisconsin Act 260 into law this past month. The Act updates our state statutes to establish that before an annuity is sold, it is considered to be in the best interest of the consumer. The legislation passed both houses unanimously and was heavily supported by various Life Insurance interest groups.

Under the law that formally goes into effect on November 16, 2022, before a financial professional recommends an annuity to a consumer, they must first disclose their role in the transaction and any material conflict of interest. Financial professionals are also required to document their recommendation and justification in written form to ensure that they made the recommendation to address the consumer’s needs and objectives. The law is intended to provide additional consumer protections and awareness by creating a higher standard for selling annuities.

The original legislation was introduced by State Senator Rob Stafsholt (R-New Richmond) and State Representative Kevin Petersen (R-Waupaca), both of whom are members of the standing Insurance committees and strong advocates for the insurance industry.

Also in April, the Governor signed 2021 Wisconsin Act 232 which was recommended this session by the Worker's Compensation Advisory Council (WCAC) as part of the traditional Workers’ Compensation Agreed Upon Bill negotiated over many months by Labor and Management with strong insurance industry input. Three insurer representatives from West Bend Mutual, Sentry Insurance and Liberty Mutual currently serve as non-voting members of the council. It’s the first WC Agreed Bill that’s been enacted in several legislative sessions and that received less legislative scrutiny this time around than from prior session bills.

WI Act 232 makes various changes to the workers’ compensation law, including:

• Increases the maximum weekly compensation rate for

   permanent partial disability from $362 to $415 for

   injuries occurring before January 1, 2023, and to $430

   for injuries occurring on or after that date.

• Part-time employment and wage expansion - The

   Act replaces the provision in current law regarding

   employees who are members of a regularly-scheduled

   class of part-time employees with a provision that

   applies to employees who work less than full time.

   Under this provision, an injured employee's average

   weekly wage is calculated as the greater of 1) The

   hourly rate at the time of injury multiplied by the

   average number of hours worked per week for the 52

   calendar weeks before his or her injury or 2) The actual

   average weekly earnings of the employee for the 52

   calendar weeks before his or her injury.

• Observers in examinations - The Act allows an

   employee to have an observer, chosen and provided

   by the employee, present during a medical

   examination that is requested by an employer or

   insurer following a claim for worker's compensation.

• The Act provides that any 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.

The Legislature has now adjourned its regular floor session pursuant to Senate Joint Resolution 1 (SJR1) and legislators have returned to their respective districts to campaign for reelection in their newly drawn districts. The fall partisan primary will be held on Tuesday, August 9 and the fall general election is on Tuesday, November 8.

By: Bernard Rosauer, President of Wisconsin Compensation Rating Bureau

By this time many of us have attended national webinars, read national periodicals containing articles regarding Covid-19 and the exposure it may bring to the workers’ compensation industry.

Logic 101 teaches us a basic flaw in logic is the hasty generalization. The problem with consuming national information and applying it to one state is obvious. In addition, early to market national predictions based on inadequate data often wastes time and  miss the mark… by a lot. 

In some cases, particularly in specific states where laws are changed or enacted quickly , generalizations regarding the specific state are reasonable and necessary. Otherwise, unless each state is looked at with a critical eye and a gathering of state specific data, reports with a wide span are less useful if not misleading when applied to one state.

Here’s Wisconsin specific information you can rely on.

Wisconsin Specific Workers Compensation Impact of Covid-19

Wisconsin Compensation Rating Bureaus transition from office to home.

Your Bureau’s transition was seamless. There was no change in service availability and work was processed on time despite the many Covid-19 related phone calls that added to our workload.  

As president of the organization, I am proud of the entire staff, the flexibility and extra hours worked to ensure availability, and timely decision-making for

members, employers, agents and all other stakeholders. Our Rating Committee, Governing Board and all employees really did step up and I acknowledge all of them and their communal effort.

Claims Received

The WCRB does not collect real time data regarding claims.  Still, we believe it is important to understand, at least anecdotally, what volume and types of Covid-19 claims are being presented by first responders, healthcare workers and other workers deemed essential.  A hasty generalization made by using countrywide statistics could have led us in the wrong direction.  With national reports predicting up to a 50% decrease in overall claims activity (because of the unemployment plunge) through April 2020, Wisconsin has seen a decrease of approximately 25% in new claims opened.

WCRB is also tracking claims received in the first responder worker categories  defined by the statutory changes in Wisconsin Workers Compensation Act that allow presumptive but rebuttable claims be honored by a defined list of first responders and healthcare workers. This will help support estimates for rating purposes at a later date.   

At a high level and at this period of time, these Covid-19 exposures are not of such a great volume that an overall impact on rate impact will be great. Of those reported the vast majority, approximately 95%, had treatment consisting of diagnosis then staying home and waiting for the illness to pass.

‘Furloughed but Paid” Workers

With reports of employers paying workers out of goodwill while those workers were furloughed, something needed to be done to remove the payroll for ‘Furloughed but Paid’ workers from eventually being used in rating the risk.

Wisconsin became the first state in the country to construct a filing with rules that granted employers relief knowing that they would not be charged a rate for their goodwill.  The Bureau developed unit statistical code 0012 which was approved by Wisconsin’s OCI in less than a week (that sounds easier than it was.)  NCCI and other rating bureaus subsequently changed their filings to include 0012 or another code that enabled employers to place payroll for workers who are not working and not apply a rate toward that payroll.

Covid-19 and Worker’s Compensation in Wisconsin Updates and FAQ’s

For a full list of FAQ’s regarding Covid-19 in Wisconsin, visit www.WCRB.org and look for the ‘Click Here’ link for Covid-19 Updates and FAQ’s.  

Here are some of the MOST frequently asked questions:

Who is considered a paid furloughed employee for WI worker’s compensation insurance purposes? 

By definition, a paid furloughed employee is one who is still being paid where they have been given a temporary layoff, an involuntary leave or another modification of normal working hours for a specified duration. This is for payments made by the employer during the paid furloughed time under the Governmental Emergency Order regardless of when it was earned.

(It is important to understand that Paid Furloughed Workers code 0012 can only be used when absolutely no work is being performed for the employer. In addition, it imperative that the employer keep clear and irrefutable records when reporting employees as paid while on furlough.)

What if Code 0012 is used fraudulently by an employer to falsely lower WC premiums?

Code 0012 can ONLY be used if an emergency order is issued by a governmental official. Code 0012 is defined as: Paid Furloughed Workers During A Governmental Emergency Order Impacting Employment. If a governmental emergency order is not in effect, code 0012 cannot be used. During a declared government emergency order, improper use of this code or the use of false or misleading documentation in support of

reallocation of payroll to this code is a violation of the law and may subject the employer/owners to fines, penalties and/or imprisonment for fraud.

If a paid furloughed employee continues to be paid by their employer, is their payroll excluded from the employer’s worker’s compensation insurance 

premium? 

If an employer continues to pay furloughed employees their normal wages and the employer keeps separate, accurate and verifiable records, the payroll will not be included for the basis of premium.

How is the payroll to be split when an employee works part of a day and is furloughed part of the day?

If the employee is performing work duties for any portion of the day, no division of payroll is acceptable.

Will COVID-19 claims be included in my future experience rating modifications?

Wisconsin procedures will be consistent with those previously applied to other Extraordinary Loss Event catastrophe codes. Valid claims coded with catastrophe code 12 and reported to Wisconsin will be excluded from experience rating calculations for any employer(s) incurring one or more such claims.