Labor representatives and attorneys say they are concerned about a report that Gov. Scott Walker’s two-year budget plan will call for “drastic” changes in Wisconsin’s well-regarded system for compensating injured workers.
An unsigned memo authored by a person with knowledge of the potential changes to the worker’s compensation program states that the Walker administration plans to upend the current one-stop-shop for injured workers, employers and insurance companies by dividing responsibilities among agencies — changes the author said will “clearly have a negative impact on our stakeholders.”
The memo, dated Jan. 15, was sent to “WC Stakeholders” and is filled with shorthand and acronyms aimed at people knowledgeable about the system. The State Journal obtained the memo last week, and it was circulated among the media by Sen. Jon Erpenbach, D-Madison, on Monday. The author declined to be identified publicly for fear of retribution.
Among the changes the memo outlines would be allowing companies and injured workers to reach their own settlements.
Currently, such deals must be approved by one of the department’s administrative law judges. In addition, the memo states that judges would no longer be available to answer questions from the public, injured workers, employers and insurance companies and instead focus only on rendering decisions in contested cases.
Fitchburg attorney David Weir, who has been representing injured workers in Wisconsin for 30 years, said the changes, if implemented, could “really impact the stakeholders — the employers, the employees and insurance companies.”
Weir said he is especially worried that injured workers unaware of their legal rights could be taken advantage of and that people with questions about how to navigate the complicated system would no longer have a knowledgeable official to answer them.
“I don’t see anything good coming out of it,” Weir said.
Another aspect of the plan would reportedly remove the Worker’s Compensation Division from the Department of Workforce Development and split its duties between two agencies, the Office of the Commissioner of Insurance and the Department of Administration, according to the memo.
DWD spokesman John Dipko referred questions about any changes in worker’s compensation to the governor’s office. Walker spokeswoman Laurel Patrick declined comment.
“The budget process is ongoing,” Patrick said in an email. “In the coming weeks, Governor Walker will be making announcements as the budget is finalized.”
Walker is scheduled to unveil his budget proposal Feb. 3.
The cost of administering Wisconsin’s program is paid for by worker’s compensation insurers and self-insured employers who pay a yearly fee proportional to what they paid out in worker’s compensation benefits in the previous year. Taxpayers do not pay for the system, and any reorganization would not add or subtract from the 2015-17 budget’s bottom line.
Compensation is paid to injured workers regardless of who’s at fault, but in return, those workers cannot sue the employer for additional damages — such as pain and suffering — that go beyond the law’s limited benefits. Employers’ insurance premiums are generally based on size of payroll, risk of injury and past injury claims.
The two Republican lawmakers who sit on the Worker’s Compensation Advisory Council — Rep. Andre Jacque of De Pere and Sen. Steve Nass of Whitewater — said they had not been briefed on any changes to the system. The co-chairs of the council, one representing labor and the other representing employers, also said they had not been consulted on any possible changes to the system.
The Worker’s Compensation Advisory Council was set up to advise DWD and the Legislature on changes to the system and has traditionally drafted bills agreed to by both management and labor on the council. But management co-chairman Jeffrey Beiriger said that role “is not written in stone,” and lawmakers can propose any ideas they want.
“One of the most important and enduring principles of the Council is maintaining the overall stability of the worker’s compensation system without regard to partisan changes in the legislative or executive branches of government,” according to the council’s webpage.
Labor co-chairwoman Stephanie Bloomingdale, secretary-treasurer of Wisconsin AFL-CIO, said a top DWD official told members Jan. 13 that he was not aware of any proposed changes to the structure of the department.
“We of course would look at any changes made to the worker’s compensation system seriously ... and how that would impact injured workers in the state,” Bloomingdale said.
Council member Melinda Seiler, claims director for West Bend Mutual Insurance, declined to comment on the changes outlined in the memo, saying she has not heard anything official.
“I think the system is working now. Overall, it’s working,” Seiler said.
Beiriger, president of Association Management Services Inc. in Menasha, said he was reserving judgment until a solid proposal comes forward.
“As a council member, I don’t know if they (changes) are good or bad,” Beiriger said. “I need to see them.”
A 2013 study by the nonpartisan Worker’s Compensation Research Institute compared 16 states that handle 60 percent of all worker injury claims filed nationwide. It concluded that “compared to other states we looked at, Wisconsin’s costs were among the lowest,” said the study’s author, Sharon Belton.
Although medical costs in Wisconsin are higher than many other states, workers are back on the job faster. The result is that the median cost of a claim, including medical expenses and lost wages, was $7,118 in Wisconsin compared to the median among the study states of $8,973, said Belton.