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Brief History of Wisconsin’s Worker’s Compensation and Explanation of some of
its Special Funds
Wisconsin Population, WC Division Size and Budget
Wisconsin Workforce, Number of WC Policies, Net Direct Earned Premiums and
Premium Rate
WC Claim and Indemnity Information
WC Claim Cost and Outcome Information
Special WC Funds Information
With approximately one staff member for every 50,000 people in the state, the WC Division is an efficient organization doing more with less, and with a budget that works out to approximately $2.33 per person in the state. However, although it is commonly assumed that the WC Division is funded by taxpayer money, this is not the case. The WC Division is actually funded by assessments levied against insurance carriers and self-insured employers writing worker’s compensation policies in the state, it is not funded by taxpayer money.
In 2004 93.5% of Wisconsin’s estimated workforce was covered by a worker’s compensation policy. This incredible achievement is due to an aggressive investigative effort by the staff of the WC Division’s Bureau of Insurance Programs to bring employers into compliance with the law. The relationship between net direct earned WC premiums and premium rate show that by comparison rates are low in Wisconsin, and yet Wisconsin has a thriving environment for insurance carriers writing worker’s compensation policies in the state. This is a win-win situation for employers and insurers.
The number of claims reported to the Wisconsin Worker’s Compensation Division has actually gone down by an average of just over 2,700 per year, while the number of claims marked denials, no lost time or non-compensable has bounced up and down from year to year. The number of litigated worker’s compensation claims has gone up and down from year to year as well.
It is a common misconception that average worker’s compensation claim costs are high in Wisconsin compared to other states. This is perhaps driven by the fact that prices for medical services, which affect the medical costs of a claim, are undoubtedly very high in Wisconsin. However, the facts tell a different story. Despite the high prices of medical services in Wisconsin, factors such as the utilization of medical services, the utilization of specialty medical services and the number of visits involved, the percent of claims with permanent partial disability, etc., all combine to give Wisconsin an average claim cost that is in the lowest 15.5% bracket out of 45 non-monopolistic fund states. Not only is the average claim cost in Wisconsin quite low, but injured workers are very satisfied with their outcomes. In a study entitled Comparing Outcomes for Injured Workers in Seven Large States, Wisconsin scored the best on eight out of the nine metrics employed (Workers Compensation Research Institute, 2007 Annual Report, p. 24). Finally, in a forthcoming study, Comparing Outcomes for Injured Workers in Nine Large States, the worker’s compensation value proposition in Wisconsin is win-win for both workers and employers. That is, the system is one where “workers gain higher benefits or better medical care at lower cost to employers; or employers receive lower costs without any material adverse effect on workers’ outcomes.” (Workers Compensation Research Institute, 2007 Annual Report, p. 3).
Wisconsin has a number of active, healthy special funds related to worker’s compensation, funds which provide benefits for injured workers when they might otherwise not receive them.
Information was obtained from the following sources:
Wisconsin Worker's Compensation Division; U.S. Department of Labor’s October, 2005 study “State Workers’ Compensation Administration Profiles Study”; U.S. Chamber of Commerce’s 2007 Analysis of Workers’ Compensation Laws; Wisconsin Compensation Rating Bureau; Workers Compensation Research Institute reports; 2006 Annual Statistical Bulletin of the National Council on Compensation Insurance.