2. Worker's Compensation
3. Insurance Letters
4. 540

Insurance Letter 540

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 indemnity 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 2022 "first closed" claims was $271,677,073. The Worker’s Compensation Division’s (WCD) net operating revenue to be collected for State Fiscal Year (SFY) 2024 is $15,068,384.85. Based on the calculation ($15,068,384.85 divided by $271,677,073), the general assessment rate is 5.547%. The general assessment rate is calculated using three decimal places rounded up to avoid a shortfall. FY24 operating expenses include a 27th pay period.

Self-insured employers pay the 5.547% general assessment rate plus an additional 1.552% to cover administrative costs of operating the self-insured employers program for a total of 7.099%. Self-insured employer invoices also include the $200 self-insured renewal fee for employers enrolled in the program during the period of July 1, 2023, through June 30, 2024.

Each organization's assessment amount is determined by multiplying its 2022 "first closed" claims' total indemnity payments by the rate indicated.

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

OWCH and LIRC are reimbursed out of the overall budget for services provided to the Department. The breakdown of SFY23 expenditures is as follows:

Action Requested

Payment of invoice in full is due within 30 days from date of invoice.

Interest will accrue on all unpaid balances after 30 days.

Inquiries

Send to: WC Assessments Please do not include email attachments; attachments sent to any WC general email box are automatically deleted.

You may reach us by phone: Pati Brown at (608) 405-4598 or Lynn Weinberger at (608) 405-4600.

Enclosure

Invoice *

* Invoices may be requested via email. Please request by emailing WC Assessments 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

Claim detail listing is available on the Administrative Accessments page; click on Assessment Reports. You will need your DWD/WISCONSIN Logon Account ID and password. Infor