NAVIGATING THE LEGAL ASPECTS OF THE WI WORKER’S COMP

CHANGESMay 10, 2016

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WHO’S ON THE LINE?

Mark BraultCompliance Advisor/Benefits Attorney, HNI

Ben MenzelRelationship Manager/Legal Advisor, HNI

Britta WagnerClaims Specialist, HNI

mbrault@hni.com bmenzel@hni.com bwagner@hni.com

WISCONSIN WORKER’S COMP STATS

• Wisconsin Worker’s Comp rates average $5.10 for every $100 of payroll – the lowest among neighboring states.

• In 2013, there were 33,000 reported Worker’s Comp claims with 5,300 of those claims litigated.

Total Wisconsin work-related injuries in 2014

WORKER’S COMP BY INDUSTRY

OUT WITH THE OLD

• Worker’s Compensation Laws enacted in 1911

• “The Grand Bargain” -System was not perfect, but most would agree it worked• No employee claims against employer • Employees receive benefits• Reduced risk of litigation/more certainty

IN WITH THE NEW

• Significant changes effective March 2, 2016

• Employer-friendly

• For the first time in over a century, under certain circumstances employers can limit benefits to employees if causation can be proven

• 24 different changes that affected the WC laws

WHO IS AFFECTED?

• Applies immediately to any individual or organization that has three or more employees performing work in this state.

• If you have fewer that 3 employees but at least $500 of payroll in any calendar quarter, employer becomes subject to WC on the 10th day of the month the next succeeding quarter.

• These new law changes apply to all employers who are subject to WC.

WORKER’S COMP CHANGES THAT IMPACT YOU

1. Changes to the Statute of Limitations

2. Permanent Disability Apportionment

3. Violation of Employer’s Alcohol and Drug Policy

4. Discharge or Suspension for Misconduct or Substantial Fault

STATUTE OF LIMITATIONS

• Since 1980, SOL for traumatic injury has been 12 years from the date of injury or the date of the last payment of indemnity benefits.

• New law reduces to SOL to 6 years.

• SOL regarding occupation disease remains 12 years from date of injury, but how permanent partial disability is assessed by medical experts has been changed - both how it is done and who may do it.

PERMANENT DISABILITY APPORTIONMENT

• Now the employer is only liable for the percentage of permanent disability that was caused by the accidental injury.

• Battle of experts.

• Judges now have the authority to include in any award an order requiring the employer or insurer to pay for a future course of instruction provided under the rehabilitation statutes.

• Will lead to more employer screening for pre-existing conditions which is permitted under ADA post job offer.

VIOLATION OF DRUG AND ALCOHOL POLICY

• Prior law required a 15% reduction of benefits paid if employee was intoxicated or under influence of drugs.

• Now a violation of policy results in no compensation or death benefits paid if violation was “causal” to the employee’s injury.

• Medical expenses are still paid.

VIOLATION OF DRUG AND ALCOHOL POLICY

• In order to use this new law, companies must revise their drug and alcohol policies to include this violation language or implement a drug and alcohol policy if none exists.

• New policy changes must be conveyed to employees.

• Companies must do drug testing and those procedures need to be in the drug and alcohol policy.

VIOLATION OF DRUG AND ALCOHOL POLICY

• Make sure you do incident/accident drug testing or your reasonable suspicion policy includes work place injuries & accidents as drug testing possibilities.

• The testing facility must be capable and prepared to render a “causal” effect opinion.

• Employer has the burden of proving causality - a battle of medical and toxicological experts looms.

DISCHARGE FOR MISCONDUCT

• Apportioning fault between the parties.

• Prior law paid out temporary disability benefits to all employees except in rare situations.

• Now temporary total disability is denied to a worker who returns to work and is subsequently terminated for misconduct or substantial fault.

• Employer has the burden of proving misconduct or substantial fault.

OTHER AREAS THAT WILL CHANGE AND BE TESTED

1. Attendance Policies

2. Claim Reporting and Concluding

3. Increasing costs

ATTENDANCE POLICIES

• Your attendance policy will be tested.

• Identify your business’ interpretation of attendance and tardiness.

• Define what constitutes excusable for absenteeism.

• Define what is considered fair notice for tardiness.

CLAIM REPORTING AND CONCLUDING

• Claimants are now required to disclose pre-existing conditions related to that injury.

• The state may revise the First Report of Injury form and WCK-16B form.

INCREASING COSTS

• Maximum WC rate increases from $322 per week to $342 per week in 2016 and to $362 in 2017. Rates apply in year of injury, not when permanent partial disability is paid.

• Factors of increasing costs include:• Need for more testing

• Need of expert opinions to corroborate benefit denial

• Claim litigation

UNINTENDED CONSEQUENCES?

• Employer-friendly changes

• “The Grand Bargain” has been chipped away

• Causation could extend litigation • Effect on reserve practices• Effect on rates

• More changes coming?

SAMPLE POLICY LANGUAGE

• If an employee violates the Company’s drug and/or alcohol policy and such use and violation causes or was a contributing factor to the employee’s injury, temporary disability, permanent disability or death, then neither the employee nor the employee’s dependents may receive any benefits or compensation under the state worker’s compensation law. This does not pertain to the cost of any medical treatment which still remains the responsibility of the Company.

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THANK YOU