Wis. Admin. Code Department of Workforce Development DWD 80.62 - Uninsured employers fund
(1) PURPOSE. The
purpose of this section is to clarify the department's procedures for handling
claims for compensation to injured workers under s.
102.81(1),
Stats. This section also defines the financial standards and actuarial
principles which the department will use to monitor the adequacy of the cash
balance in the fund to pay both known claims and claims incurred but not
reported under s.
102.81(1),
Stats.
(2) DEFINITIONS. In this
section:
(a) "Agent" means a third-party
administrator or other person selected by the department to assist in the
administration of the uninsured employers fund program.
(b) "Case reserve" means the best estimate
documented in the claim-loss file of all liability to pay compensation on a
claim under s.
102.81(1),
Stats.
(c) "Claim" means an injury
suffered by an employee of an uninsured employer for which the uninsured
employer is liable under s.
102.03,
Stats., and which is reported to the department on a form approved by the
department for reporting work-related injuries.
(d) "Fund" means the uninsured employers fund
in s.
102.80,
Stats.
(e) "Incurred but not
reported reserve" or "IBNR reserve" means the best actuarial estimate of
liability to pay compensation under s.
102.81(1),
Stats., for injuries which occurred on or prior to the current accounting date,
for which there is no claim yet reported to the department.
(f) "Insolvent" means inadequate to fund all
claims under s.
102.81(1),
Stats.
(g) "Solvent" means adequate
to pay all claims under s.
102.81(1),
Stats.
(h) "Ultimate reserve" means
the best actuarial estimate of aggregate case reserves from all claims, the
expected future development of claims that have been reported, and IBNR
reserve.
(i) "Uninsured employer"
means an employer who is subject to ch. 102, Stats., under s.
102.04(1),
Stats., and who has not complied with the duty to insure or to obtain an
exemption from the duty to insure under s.
102.28(2) or (3), Stats.
(3) REPORTING A CLAIM.
(a) In addition to the notice to an employer
required under s.
102.12,
Stats., an employee shall report a claim for compensation under s.
102.81,
Stats., to the department on a form provided by the department within a
reasonable time after the employee has reason to believe that an uninsured
employer may be liable for the injury.
Note: To obtain a form to report a claim for compensation, contact the Department of Workforce Development, Worker's Compensation Division, 201 East Washington Avenue, P.O. Box 7901, Madison, Wisconsin 53707 or call (608) 266-1340.
(b) After receiving a claim under par. (a),
the department shall determine whether the employer is an uninsured employer by
reviewing its own records and the records maintained by the Wisconsin
compensation rating bureau. Within 14 days after receiving a claim under par.
(a), the department shall send the employer written notice that a claim has
been reported and that the department has made an initial determination that
the employer is, or is not, an uninsured employer with respect to the claimed
injury. The department shall send a copy of the notice to the employee who
filed the claim. If the department later modifies its initial determination
regarding the employer's insurance status with respect to a claim reported
under this section, it shall promptly notify the employer and the employee of
the reason for the modification and the likely impact of this change on the
claim, if any. The employer shall notify its insurance carrier of any
modification if the department determines that the employer is an insured
employer.
(c) If the department
determines that the employer is an uninsured employer it shall promptly seek
reimbursement as provided in s.
102.82(1),
Stats., and additional payments to the fund as provided in s.
102.82(2),
Stats. The department may also initiate penalty proceedings under s.
102.85,
Stats. If the department determines that the employer is not an uninsured
employer it shall notify the parties and close the claim. Nothing in this
section shall prevent the department from taking other appropriate action on a
claim including penalties and interest due under ss.
102.16(3),
102.18(1) (b) and (bp),
102.22(1),
102.35(3),
102.57 and
102.60,
Stats.
(4) PAYING A
CLAIM. Within 14 days after a claim is reported to the department, the
department or its agent shall mail the first indemnity payment to the injured
employee, deny the claim or explain to the employee who filed a claim the
reason that the claim is still under review. The department or its agent shall
report to the employee regarding the status of the claim at least once every 30
days from the date of the first notification that the claim is under review
until the first indemnity payment is made or the claim is denied.
(5) EMPLOYEE COOPERATION.
(a) An employee who makes a claim shall
cooperate with the department or its agent in the investigation or payment of a
claim.
(b) The department or its
agent may deny compensation on a claim if an employee fails to provide
reasonable assistance to the department or its agent, including recorded
interviews, questionnaire responses, medical and other releases, copies of
relevant payroll checks, check stubs, bank records, wage statements, tax
returns or other similar documentation to identify the employer who may be
liable for the injury under s.
102.03,
Stats. The department or its agent may also require the employee to document
any medical treatment, vocational rehabilitation services or other bills or
expenses related to a claim. To verify information submitted in support of a
claim for compensation the department or its agent may share information
related to a claim with other governmental agencies, including those
responsible for tax collection, unemployment insurance, medical assistance,
vocational rehabilitation, family support or general relief. Any information
obtained from a patient health care record or that may constitute a patient
health care record will be shared only to the extent authorized by ss.
146.81 to
146.84,
Stats.
(c) If an employee fails to
cooperate as required by par. (b), the department may suspend action upon an
application filed under s.
102.17(1),
Stats., or may issue an order to dismiss the application with or without
prejudice.
(6) EMPLOYER
COOPERATION. An employer who is alleged to be uninsured shall cooperate with
the department or its agent in the investigation of a claim by providing any
records related to payroll, personnel, taxes, ownership of the business or its
assets or other documents which the department or its agent request from the
employer to determine the employer's liability under s.
102.03,
Stats. If an employer fails to provide information requested under this
subsection, the department may presume the employer is an uninsured
employer.
(7) DEPARTMENT AGENTS.
(a) The department may select one or more
agents to assist the department in its administration of the uninsured
employers program, including agents selected for any of the following:
1. To receive, review, record, investigate,
pay or deny a claim.
2. To
represent the legal interests of the uninsured employers fund and to make
appearances on behalf of the uninsured employers fund in proceedings under ss.
102.16 to
102.29,
Stats.
3. To seek reimbursement
from employers under s.
102.82(1),
Stats., for payments made from the fund to or on behalf of employees or their
dependents and for claims administration expenses.
4. To seek additional payments to the fund
under s.
102.82(2),
Stats.
5. To prepare reports,
audits or other summary information related to the program.
6. To collect overpayments from employees or
their dependents or from those to whom overpayments were made on behalf of
employees or their dependents where benefits were improperly paid.
(b) Except as provided in this
section, the department or its agent shall have the same rights and
responsibilities in administering claims under ch. 102, Stats., as an insurer
authorized to do business in this state. The department or its agent is not
liable for penalties and interest due under ss.
102.16(3),
102.18(1) (b) and (bp),
102.22(1),
102.35(3),
102.57 and
102.60,
Stats.
(9) DETERMINING
THE SOLVENCY OF THE FUND.
(a) The department
shall monitor the fund's net balance of assets and liabilities to determine if
the fund is solvent using the following accounting principles:
1. In determining the fund's assets, the
department shall not include recoveries under s.
102.29(1),
Stats., unless they are in process of payment and due within 30 days, or
vouchers in the process of payment which are not fully credited to the fund's
account.
2. In determining the
fund's liabilities, the department shall estimate the ultimate reserves without
discounting, and shall not include reinsurance recoveries that are less than 60
days overdue.
(b) If the
secretary determines that ultimate liabilities to the fund on known and IBNR
claims exceed 85% of the cash balance in the fund, the secretary shall consult
with the council on worker's compensation. If the secretary determines that the
fund's ultimate liabilities exceed the fund's ultimate assets, or that there is
a reasonable likelihood that the fund's liabilities will exceed the fund's
assets within 3 months, the secretary shall file the certificate of insolvency
in s.
102.80(3) (ag), Stats.
(10) TEMPORARY REDUCTION OR DELAY OF PAYMENTS
FROM THE FUND.
(a) If the secretary files a
certificate under s.
102.80(3) (ag), Stats., the department shall continue
to pay compensation under s.
102.81(1),
Stats., on claims reported to the department prior to the date specified in
that certificate after which no new claims under s.
102.81(1),
Stats., will be accepted or paid.
(b) If the cash balance in the fund is not
sufficient to pay all compensation or other liabilities due in a timely manner,
the department may temporarily reduce or delay payments on claims to employees,
dependents of employees, health care providers, vocational rehabilitation
specialists and others to whom the fund is liable. To manage the fund's cash
flow, the department may adopt a uniform, pro-rata reduction schedule or it may
establish different payment schedules for different types of liabilities. The
department may amend its payment schedule as necessary.
(c) The department shall provide written
notice to each person who does not receive timely compensation from the fund
which explains the reduced or delayed payment schedule adopted by the
department to resolve the cash-flow problem.
Notes
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