2. Worker's Compensation
3. Insurance Letters
4. 538

Insurance Letter 538

Purpose

To communicate to insurance carriers and self-insured employers the new assessment rate. This includes information regarding deadlines and reminds insurance carriers and self-insured employers that interest will accrue on all unpaid balances after 30 days. The Worker’s Compensation Administrative Assessment is issued annually.

Background

Section 102.75, Wis. Stats., authorizes the department to assess and collect the administrative costs for the Wisconsin Worker’s Compensation Act from worker’s compensation insurance carriers and self-insured employers. Each company's indemnity amount is determined by summing the amounts paid for each claim "first closed" in the previous calendar year. Indemnity includes payments for temporary total and partial disability, permanent total and partial disability, compromises, death benefits and funeral expenses, paid holidays, supplemental benefits, disfigurement, and vocational rehabilitation.

The Worker’s Compensation Administrative Assessment rate is calculated by dividing the current state fiscal year’s operating costs by the total indemnity payments from carriers and self-insured employers for claims "first closed" in the previous calendar year. The total indemnity paid for 2021 "first closed" claims was $313,465,586. The Worker’s Compensation Division’s (WCD) net operating revenue to be collected for State Fiscal Year (SFY) 2023 is $13,408,891.61. Based on the calculation ($13,408,891.61 divided by $313,465,586), the general assessment rate is 4.278%. The general assessment rate was calculated using three decimal places rounded up to provide an accurate rate.

Self-insured employers pay the 4.278% general assessment rate plus an additional 1.245% to cover administrative costs of operating the self-insured employers program for a total of 5.523%. The self-insured employer invoice also includes the $200 self-insured renewal fee for the period of July 1, 2022 through June 30, 2023.

Each company's assessment amount is determined by multiplying its 2021 "first closed" claims' total indemnity payments by the rate indicated. Each company's claim detail listing is available online; click on Assessment Reports. You will need your DWD/WISCONSIN Logon Account ID and password.

In addition to funding standard operating expenses, this year's General Assessment includes $500,000 pursuant to Statute 102.81(1)(c), which requires the Department to transfer funds to the Uninsured Employer's Fund (UEF) for any UEF claims in excess of $1,000,000. Section 102.81 (1) (c), was created by 2015 Wis. Act 55, effective Jan. 1, 2016. This is the first year in which a UEF claim was determined to meet the criteria under the law. The law caps the total transfer at $500,000 in a calendar year.

The overall operating budget funds three major components:

• The Department of Workforce Development (DWD) - WC Operations
• The Department of Administration, Division of Hearings and Appeals, Office of Worker's Compensation Hearings (OWCH)
• The Labor & Industry Review Commission (LIRC)

In addition to funding operating expenses, this year's assessment includes OWCH and LIRC being reimbursed out of the overall budget for services provided to the Department. The breakdown of SFY22 expenditures are as follows:

Action Requested

Payment of SFY2023 assessment invoice.

Inquiries

WCASSESSMENT@dwd.wisconsin.gov or Pati Brown at (608) 405-4598 or Lynn Weinberger at (608) 405-4600. Please do not include email attachments; attachments sent to general email boxes are automatically deleted.

Enclosure

Invoice *

* Invoices may be requested via email. Please request by emailing WCASSESSMENT@dwd.wisconsin.gov and providing your preferred email address and the names of all organizations for whom you process payments. Please do not include email attachments; attachments sent to general email boxes are automatically deleted.

Reference

See WC Division website for claim detail listing.