In Wisconsin, Governor Walker has proposed dismantling Wisconsin's nationally acclaimed Workers Compensation System. Since 1911, when Wisconsin was the first state with a comprehensive worker's compensation system, our state has been the model for other states to follow. Here are some of the consequences of breaking apart Wisconsin's workers compensation system.
Source of Governor Walker's Proposal
Since the creation of the Worker's Compensation Act of Wisconsin in 1911, changes in the law have been proposed by a non-political committee representing labor and employers; since 1968 referred to as the Wisconsin Worker's Compensation Advisory Council. The process has been respected by republican and democratic lawmakers and has worked well for over 100 years. Governor Walker's changes in the system did not come from the non-political Advisory Council, but stem from Governor Walker's political appointees. Apart from the actual changes in the system, the disrespect of the century old nonpartisan process will result in a flip-flop of the laws governing worker's compensation every time a different political party gains a majority. This is bad for business in Wisconsin. Employers, employees and insurers want stability and predictability in the law. Governor Walker's workers' compensation changes create uncertainty, which is bad for business.
Structure of the Division of Worker's Compensation
The Worker's Compensation Division would be dismantled and its staff scattered to other agencies where their work will no longer be only worker's compensation but may include other matters such as criminal parole and probation hearings. Without a central authority or department monitoring the process of worker's compensation claims, the process will get longer and be more expensive for employers and employees. The parties will be more responsible for their claims and those with the attorneys and money will necessarily do better. Again, there will be less stability and predictability in the process, which is bad for business.
Another significant change is there will not be an on call worker's compensation judge or other Division staff persons available to take general questions from attorneys or paralegals. This informal advice resource has been an invaluable tool to the process that has saved time and money for employers, insurers and employees, helping to make our system more consistent and reliable.
Under current law only the parties and the Worker's Compensation Division has access to an injured employees medical records. The new proposal allows the medical records to be potentially shared with other governmental agencies.
For all these years, workers compensation settlements had to be approved by an Administrative Law Judge in the Worker's Compensation Division. This protected the injured employee from making a bad settlement but it also protected the employer and insurer because approved settlements are almost never reopened. Under the new proposal, parties will be able to settle without Division approval. This is bad for employees, but also bad for employers and insurers who could face new litigation after they thought a case was settled. Also, without Division oversight and approval, it is likely that health insurers who paid for medical treatment and doctors with outstanding balances will stand less of a chance of getting paid out of settlements.
The new proposal changes the hearing process in ways that will cost the parties, likely the employer and insurer, more money. Without a court reporter, the parties will have to hire their own or go without. With the judges being less experienced in worker's compensation (they have other duties like parole hearings) mistakes are more likely to be made resulting in more appeals and attorney fees. The scheduling of hearings will not be a part of a central dedicated department like the present Workers' Compensation Division. Cases may linger longer without a hearing date as happens in some other states and this costs not only the injured employee but also the insurer in reserve costs.
Currently, the administration of the Wisconsin worker's compensation system costs the taxpayer nothing. All expenses to administer the Worker's Compensation Act are paid by the state's employers, either directly when self-insured or through premiums to insurers. Despite this, the 300 worker's compensation insurance companies doing business in Wisconsin are profitable and employer's premiums rank in the middle nationally. If the Division's employees are scattered to other departments, overlapping of job duties and duplication of services will drive up costs to employers and insurers. Also, the cost of moving and installing a new computer system will have to be paid.