Indicator 2: Promptness of First Indemnity Payments

Indicator Description

This indicator measures insurers' compliance with DWD 80.02(3)(a) relating to the promptness of first indemnity payments.

Compliance Requirement

DWD 80.02(3)(a) establishes a promptness standard of 80% or more for all first indemnity payments. In order to meet the standard first indemnity payments must be mailed to the injured employee within 14 days or less following the date of injury or the last day worked after the injury before the first day of compensable lost time.

With 80% as the benchmark, the standard allows for unavoidable delays resulting from litigation or claim investigations, as well as delays in notification of the injury from the employee to the employer or the employer to the insurer. The standard was developed and set at 80% with consideration of these and other reasons for delayed payments that were beyond the insurer's reasonable control.

Standard or Benchmark

DWD 80.02(3)(a) sets the standard for prompt first indemnity payments as follows: 80% or more of first indemnity payments are to be made within 14 days of the date of injury or the last day worked.

Source of Indicator Data

Temporary total disability (TTD) payments are used to measure timeliness of first indemnity payments. Salary Continued payments are always considered as a prompt payment. First TTD payments made as a result of an order from a legal hearing or stipulation are included in the timeliness measurement. Payments made as a result of a compromise agreement, or a hearing loss claim, are not included in the assessment of timeliness of first indemnity payments. All other types of payments, including permanent partial disability (PPD) and temporary partial disability (TPD), are excluded from the timeliness measurement.

Computation Methodology

For most claims promptness of the first indemnity payment is measured by computing the number of days from the day following the date of injury or last day of work, whichever is later, to the day the first indemnity payment is made.

In cases in which the first period of lost time is 3 days or less, followed by a period of intervening work that is followed by another period of lost time, computation begins with the last day worked which triggered eligibility for payment for the first period of lost time. For example, an injury happened on December 1 but the worker was on the job December 3-6 and subsequently was not able to work from December 7-10; then, a first indemnity payment made by December 20 would be timely.

State of Wisconsin Average

What This Indicator Measures

This indicator measures promptness of Worker's Compensation first indemnity payments. The legal standard for insurers is to make 80% or more of first indemnity payments within 14 days of the date of injury or last day of work prior to the first compensable day of injury, whichever occurs later. This indicator summarizes data from about 180 insurers, accounting for over 90% of all claims. Data is updated quarterly.

Explanatory Comments for Current Indicator

Industry performance is at 79% for the 3rd quarter of 2024. 12 quarter performance is at 79%. The WC Division will begin contacting insurance carriers and self-insured employers regarding their performance with respect to this important metric.

Indicator 2: Promptness of First Indemnity

• Group A - Large Insurers (400 or more paid claims in the previous calendar year)
• Group B - Medium Size Insurers (less than 400 but at least 65 paid claims in the previous calendar year)
• Group C - Small Size Insurers (less than 65 paid claims in the previous year, but at least 65 claims in the previous three-year period)

PLEASE NOTE: Quarterly summary reports are static. As such they are a snapshot of performance reflected by our database on the 14^th day of every new quarter. As such, actual performance may be different due to changes to the claims for the given quarter after the reports are run.