Workers' Comp: COVID-19 and Workers' Compensation in Wisconsin

By this time many of us have attended national webinars, read national periodicals containing articles regarding Covid-19 and the exposure it may bring to the workers’ compensation industry.

Logic 101 teaches us a basic flaw in logic is the hasty generalization. The problem with consuming national information and applying it to one state is obvious. In addition, early to market national predictions based on inadequate data often wastes time and miss the mark… by a lot.

In some cases, particularly in specific states where laws are changed or enacted quickly , generalizations regarding the specific state are reasonable and necessary. Otherwise, unless each state is looked at with a critical eye and a gathering of state specific data, reports with a wide span are less useful if not misleading when applied to one state.

Here’s Wisconsin specific information you can rely on.

Wisconsin Specific Workers Compensation Impact of Covid-19

Your Bureau’s transition was seamless. There was no change in service availability and work was processed on time despite the many Covid-19 related phone calls that added to our workload.

As president of the organization, I am proud of the entire staff, the flexibility and extra hours worked to ensure availability, and timely decision-making for members, employers, agents and all other stakeholders. Our Rating Committee, Governing Board and all employees really did step up and I acknowledge all of them and their communal effort.

Claims Received

The WCRB does not collect real time data regarding claims. Still, we believe it is important to understand, at least anecdotally, what volume and types of Covid-19 claims are being presented by first responders, healthcare workers and other workers deemed essential. A hasty generalization made by using countrywide statistics could have led us in the wrong direction. With national reports predicting up to a 50% decrease in overall claims activity (because of the unemployment plunge) through April 2020, Wisconsin has seen a decrease of approximately 25% in new claims opened.

WCRB is also tracking claims received in the first responder worker categories defined by the statutory changes in Wisconsin Workers Compensation Act that allow presumptive but rebuttable claims be honored by a defined list of first responders and healthcare workers. This will help support estimates for rating purposes at a later date.

At a high level and at this period of time, these Covid-19 exposures are not of such a great volume that an overall impact on rate impact will be great. Of those reported the vast majority, approximately 95%, had treatment consisting of diagnosis then staying home and waiting for the illness to pass.

‘Furloughed but Paid” Workers

With reports of employers paying workers out of goodwill while those workers were furloughed, something needed to be done to remove the payroll for ‘Furloughed but Paid’ workers from eventually being used in rating the risk.

Wisconsin became the first state in the country to construct a filing with rules that granted employers relief knowing that they would not be charged a rate for their goodwill. The Bureau developed unit statistical code 0012 which was approved by Wisconsin’s OCI in less than a week (that sounds easier than it was.) NCCI and other rating bureaus subsequently changed their filings to include 0012 or another code that enabled employers to place payroll for workers who are not working and not apply a rate toward that payroll.

Covid-19 and Worker’s Compensation in Wisconsin Updates and FAQ’s

For a full list of FAQ’s regarding Covid-19 in Wisconsin, visit www.WCRB.org and look for the ‘Click Here’ link for Covid-19 Updates and FAQ’s.

Here are some of the MOST frequently asked questions:

Who is considered a paid furloughed employee for WI worker’s compensation insurance purposes?

By definition, a paid furloughed employee is one who is still being paid where they have been given a temporary layoff, an involuntary leave or another modification of normal working hours for a specified duration. This is for payments made by the employer during the paid furloughed time under the Governmental Emergency Order regardless of when it was earned. In addition, it imperative that the employer keep clear and irrefutable records when reporting employees as paid while on furlough.)

What if Code 0012 is used fraudulently by an employer to falsely lower WC premiums?

Code 0012 can ONLY be used if an emergency order is issued by a governmental official. Code 0012 is defined as: Paid Furloughed Workers During A Governmental Emergency Order Impacting Employment. If a governmental emergency order is not in effect, code 0012 cannot be used. During a declared government emergency order, improper use of this code or the use of false or misleading documentation in support of reallocation of payroll to this code is a violation of the law and may subject the employer/owners to fines, penalties and/or imprisonment for fraud.

If a paid furloughed employee continues to be paid by their employer, is their payroll excluded from the employer’s worker’s compensation insurance premium?

If an employer continues to pay furloughed employees their normal wages and the employer keeps separate, accurate and verifiable records, the payroll will not be included for the basis of premium.

How is the payroll to be split when an employee works part of a day and is furloughed part of the day?

If the employee is performing work duties for any portion of the day, no division of payroll is acceptable.

Will COVID-19 claims be included in my future experience rating modifications?

Wisconsin procedures will be consistent with those previously applied to other Extraordinary Loss Event catastrophe codes. Valid claims coded with catastrophe code 12 and reported to Wisconsin will be excluded from experience rating calculations for any employer(s) incurring one or more such claims.

> Bernard Rosauer, President

Wisconsin Compensation Rating Bureau