By: Chelsie D. Springstead

The Wisconsin Worker’s Compensation Advisory Council was created to advise the Department and Legislature on policy matters concerning the development and administration of Wisconsin’s worker’s compensation system. The Advisory Council is comprised of an equal number of voting members from labor and management, along with non-voting representatives from the insurance industry, a representative from the Department and liaisons from the medical community. In 2014, for the first time in the history of the Advisory Council, the agreed-upon bill that it submitted to the Legislature did not pass.

On July 12, 2015, Governor Walker enacted the 2015 Budget Bill which included the transfer of 18 worker’s compensation administrative law judges from the Department of Workforce Development to the Department of Administration. This was the first change to the worker’s compensation field that has occurred without the Advisory Council’s input. Since that time there have been many rumors regarding the intent of various groups to circumvent the Advisory Council and introduce bills directly to the Legislature that would significantly change the landscape of Wisconsin’s worker’s compensation system.

The Advisory Council recently met last Wednesday, October 21, 2015, and authored a draft bill that has been negotiated and agreed upon by both labor and management to be introduced in the 2015-2016 session. Per notes taken at the most recent meeting, below are some of the main items that are set to be listed in the final agreed-upon bill that is scheduled to be drafted and submitted to the Legislature later this year. As you will see, the changes proposed appear to favor employers and insurance carriers.

• Reduce the statute of limitations for traumatic injuries from 12 years to 6 years (the SOL for occupational injuries remains unchanged)
• Allow apportionment of permanent partial disability – require employees to disclose all previous permanent disabilities or impairments to the alleged injured body parts so that liability for employees’ conditions can be apportioned between the prior impairments and the injuries resulting from the alleged work event. Employers/carriers would then only be held liable for the portion of the condition directly caused by the work event or occupational exposure.
• Update the permanent partial disability minimum ratings to reflect medical advancements (i.e. lower minimum ratings for joint repairs and total joint replacements)
• Eliminate wage escalation so temporary disability benefits are paid based upon actual earnings at time of injury rather than an escalated rate
• Eliminate benefits to workers who violate an employer’s drug and alcohol policy if the use of the drugs/alcohol are shown to be the cause of the injury
• Allow the employer/carrier to deny benefits if a worker is brought back to work on light duty and they subsequently are fired for good cause
• Increase the maximum permanent partial disability benefits by $20 in 2016 to $342 and $20 in 2017 to $362 weekly
• Allow prospective orders for vocational retraining
• Fund a position at the Department of Justice to fight worker’s compensation fraud

In addition to the Advisory Council’s agreed-upon bill, Representatives Spiros (R-Marshfield) and Knodl (R-Germantown) and Senator Stroebel (R-Saukville) circulated a reform proposal last week which includes many provisions that are even more employer-friendly than those in the agreed-upon bill. Highlighted below are some of the most significant changes included in this recent bill:

• Bar recovery of work comp benefits to an employee who knowingly falsifies their physical condition on an employment application if the employer relies upon this false information to hire the employee and there is a causal connection between the injury and the false information
• Allow for reduction of benefits if an injury is caused by negligence attributed to the employee
• Allow for an offset of benefits by old-age social security income, not just social security disability income
• Reduce the statute of limitations for traumatic injuries to 2 years instead of 12 years
• Allow for the denial of benefits during a healing period if an employee is brought back to work light duty and they are subsequently suspended or terminated for misconduct or substantial fault, as defined by unemployment insurance law
• Eliminate the escalation of wages during a renewed period of disability and, instead, use the date of injury wage to calculate benefits owed
• Eliminate minimum permanent partial disability ratings when it is shown that no actual impairment resulted from the procedure or injury
• Allow prospective retraining orders
• Require employees who the Department have found suffered permanent partial disability to resubmit to a medical re-examination every three years at which time the Department will re-evaluate the case and issue a new order as to permanent partial disability based upon the updated medical opinion
• Require employers with health benefit plans to provide employees covered by the plan their choice of practitioner within the plan
• Allow employers to direct care for employees not covered by an employer health benefit plan

This bill is set to be introduced to the Legislature jointly by Rep. Spiros and Sen. Stroebel on October 29, 2015, to be voted on yet this year.

At this time, it is yet to be seen whether either bill will be adopted by the Legislature in its entirety or in part. The Lindner & Marsack Worker’s Compensation Defense Team continues to follow these issues closely and will provide additional updates as they become available. Should you have any questions or want additional information regarding these bills and the effect of the potential changes on the worker’s compensation system, please contact any member of the Lindner & Marsack Worker’s Compensation Defense Practice.

By: Chelsie D. Springstead

Governor Walker initially submitted a budget bill on February 3, 2015, which, among other things, proposed removing the Worker’s Compensation Division from the Department of Workforce Development (DWD) and moving administrative law judges and the judicial functions to the Department of Administration – Office of Hearings and Appeals (DOA) and the remaining staff and day-to-day functions to the Office of Commissioner of Insurance (OCI).   In late May 2015, the Joint Finance Committee revised the bill to include the reassignment of the judges and the judicial functions to the DOA but rejected the proposal to move the staff and remaining functions to the OCI, proposing instead to keep them at the DWD. Additionally, the revised bill called for the work comp judges to spend 90% of their time at DOA adjudicating work comp cases, leaving the remaining 10% of their time for them to preside over other matters handled by DOA.

On July 12, 2015, Governor Walker enacted the 2015 Budget Bill which included the transfer of eighteen worker’s compensation administrative law judges and all adjudicatory functions to the DOA. The budget also stated that no less than six judges and two support staff positions should remain at the DWD to handle the day-to-day functions. As suggested by the Joint Finance Committee, the remaining staff and day-to-day functions (including claims management and insurance regulation) will remain at the DWD. However, Governor Walker used his line item veto to strike the sentence proposed by the Committee which called for 90% of the judges’ time to be spent on work comp cases, stating as an explanation that the DOA should have control over what cases the judges in their department preside over. These changes are set to take place on January 1, 2016.

It is currently unclear whether the six judges that will remain at the DWD will be able to preside over settlement conferences or whether that function will be transferred to the DOA. It is also unclear whether the eighteen judges that are being transferred to the DOA will be the only judges to handle worker’s compensation hearings, or whether other judges that are currently at the DOA will be cross-trained to handle worker’s compensation cases as well. This could mean an influx of new judges presiding over worker’s compensation hearings.  A committee is currently forming to aid the DOA and DWD in such decisions and to help make the transfer of the judges as seamless as possible. We will continue to supply you with up-to-date information as this process progresses.

While the recent budget bill is considered to have effected position changes only with no real substantive changes made to our existing worker’s compensation system, there are other proposed legislative bills currently being circulated which call for significant changes to the Act including altering the statute of limitations, eliminating minimum permanency ratings, enacting a medical fee schedule and allowing civil action against employers for abusive work environments. While none of these proposed bills have been submitted to the Legislature for review at this juncture, we will continue to monitor all proposals and will provide ongoing updates once/if any are presented to the Legislature.

Please feel free to contact Chelsie Springstead by email at cspringstead@lindner-marsack.com, or any member of the Lindner & Marsack Worker’s Compensation Defense Practice with any questions.

4th Annual Worker’s Compensation Spring Symposium

Register Now!

The Lindner & Marsack worker’s compensation team has been recognized by U.S. News and World Reports as one of the nation’s preeminent worker’s compensation defense practices. You now have the opportunity to join our first tier ranked team for a half-day morning worker’s compensation seminar we are conducting on March 12, 2015, at the Country Springs Hotel in Pewaukee, Wisconsin.

Our fourth annual symposium will discuss several hot topics in worker’s compensation including the top worker’s compensation trends in 2015 and 2016, the future landscape of the Wisconsin worker’s compensation system, a journey through a typical physical IME and more.  Click here for more information: 2015 Spring Symposium Final Invitation

Whether you are an insurance adjuster, safety manager or human resources professional, don’t miss this opportunity to learn about the latest developments in worker’s compensation that could affect your bottom line.

Be sure to register soon for this FREE event by emailing Chelsie Springstead at cspringstead@lindner-marsack.com.