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DWD 80.62 Uninsured employers fund. (1) PURPOSE.
The purpose of this section is to clarify the department's procedures
for handling claims for compensation to injured workers
under s. 102.81 (1), Stats. This section also defines the financial
standards and actuarial principles which the department will use
to monitor the adequacy of the cash balance in the fund to pay both
known claims and claims incurred but not reported under s.
102.81 (1), Stats.
(2) DEFINITIONS. In this section:
(a) "Agent" means a third-party administrator or other person
selected by the department to assist in the administration of the
uninsured employers fund program.
(b) "Case reserve" means the best estimate documented in the
claim-loss file of all liability to pay compensation on a claim
under s. 102.81 (1), Stats.
(c) "Claim" means an injury suffered by an employee of an
uninsured employer for which the uninsured employer is liable
under s. 102.03, Stats., and which is reported to the department on
a form approved by the department for reporting work-related
(d) "Fund" means the uninsured employers fund in s. 102.80,
(e) "Incurred but not reported reserve" or "IBNR reserve"
means the best actuarial estimate of liability to pay compensation
under s. 102.81 (1), Stats., for injuries which occurred on or prior
to the current accounting date, for which there is no claim yet
reported to the department.
(f) "Insolvent" means inadequate to fund all claims under s.
102.81 (1), Stats.
(g) "Solvent" means adequate to pay all claims under s. 102.81
(h) "Ultimate reserve" means the best actuarial estimate of
aggregate case reserves from all claims, the expected future development
of claims that have been reported, and IBNR reserve.
(i) "Uninsured employer" means an employer who is subject
to ch. 102, Stats., under s. 102.04 (1), Stats., and who has not complied
with the duty to insure or to obtain an exemption from the
duty to insure under s. 102.28 (2) or (3), Stats.
(3) REPORTING A CLAIM. (a) In addition to the notice to an
employer required under s. 102.12, Stats., an employee shall
report a claim for compensation under s. 102.81, Stats., to the
department on a form provided by the department within a reasonable
time after the employee has reason to believe that an uninsured
employer may be liable for the injury.
(b) After receiving a claim under par. (a), the department shall
determine whether the employer is an uninsured employer by
reviewing its own records and the records maintained by the Wisconsin
compensation rating bureau. Within 14 days after receiving
a claim under par. (a), the department shall send the employer
written notice that a claim has been reported and that the department
has made an initial determination that the employer is, or is
not, an uninsured employer with respect to the claimed injury. The
department shall send a copy of the notice to the employee who
filed the claim. If the department later modifies its initial determination
regarding the employer's insurance status with respect
to a claim reported under this section, it shall promptly notify the
employer and the employee of the reason for the modification and
the likely impact of this change on the claim, if any. The employer
shall notify its insurance carrier of any modification if the department
determines that the employer is an insured employer.
(c) If the department determines that the employer is an uninsured
employer it shall promptly seek reimbursement as provided
in s. 102.82 (1), Stats., and additional payments to the fund as provided
in s. 102.82 (2), Stats. The department may also initiate penalty
proceedings under s. 102.85, Stats. If the department determines
that the employer is not an uninsured employer it shall
notify the parties and close the claim. Nothing in this section shall
prevent the department from taking other appropriate action on a
claim including penalties and interest due under ss. 102.16 (3),
102.18 (1) (b) and (bp), 102.22 (1), 102.35 (3), 102.57 and 102.60,
(4) PAYING A CLAIM. Within 14 days after a claim is reported
to the department, the department or its agent shall mail the first
indemnity payment to the injured employee, deny the claim or
is the date the chapter was last published. Register October 2015 No. 718
explain to the employee who filed a claim the reason that the claim
is still under review. The department or its agent shall report to the
employee regarding the status of the claim at least once every 30
days from the date of the first notification that the claim is under
review until the first indemnity payment is made or the claim is
(5) EMPLOYEE COOPERATION. (a) An employee who makes a
claim shall cooperate with the department or its agent in the investigation
or payment of a claim.
(b) The department or its agent may deny compensation on a
claim if an employee fails to provide reasonable assistance to the
department or its agent, including recorded interviews, questionnaire
responses, medical and other releases, copies of relevant
payroll checks, check stubs, bank records, wage statements, tax
returns or other similar documentation to identify the employer
who may be liable for the injury under s. 102.03, Stats. The department
or its agent may also require the employee to document any
medical treatment, vocational rehabilitation services or other bills
or expenses related to a claim. To verify information submitted
in support of a claim for compensation the department or its agent
may share information related to a claim with other governmental
agencies, including those responsible for tax collection, unemployment
insurance, medical assistance, vocational rehabilitation,
family support or general relief. Any information obtained
from a patient health care record or that may constitute a patient
health care record will be shared only to the extent authorized by
ss. 146.81 to 146.84, Stats.
(c) If an employee fails to cooperate as required by par. (b), the
department may suspend action upon an application filed under s.
102.17 (1), Stats., or may issue an order to dismiss the application
with or without prejudice.
(6) EMPLOYER COOPERATION. An employer who is alleged to
be uninsured shall cooperate with the department or its agent in the
investigation of a claim by providing any records related to payroll,
personnel, taxes, ownership of the business or its assets or
other documents which the department or its agent request from
the employer to determine the employer's liability under s.
102.03, Stats. If an employer fails to provide information
requested under this subsection, the department may presume the
employer is an uninsured employer.
(7) DEPARTMENT AGENTS. (a) The department may select one
or more agents to assist the department in its administration of the
uninsured employers program, including agents selected for any
of the following:
1. To receive, review, record, investigate, pay or deny a claim.
2. To represent the legal interests of the uninsured employers
fund and to make appearances on behalf of the uninsured employers
fund in proceedings under ss. 102.16 to 102.29, Stats.
3. To seek reimbursement from employers under s. 102.82
(1), Stats., for payments made from the fund to or on behalf of
employees or their dependents and for claims administration
4. To seek additional payments to the fund under s. 102.82 (2),
5. To prepare reports, audits or other summary information
related to the program.
6. To collect overpayments from employees or their dependents
or from those to whom overpayments were made on behalf
of employees or their dependents where benefits were improperly
(b) Except as provided in this section, the department or its
agent shall have the same rights and responsibilities in administering
claims under ch. 102, Stats., as an insurer authorized to do
business in this state. The department or its agent is not liable for
penalties and interest due under ss. 102.16 (3), 102.18 (1) (b) and
(bp), 102.22 (1), 102.35 (3), 102.57 and 102.60, Stats.
(9) DETERMINING THE SOLVENCY OF THE FUND. (a) The department
shall monitor the fund's net balance of assets and liabilities
to determine if the fund is solvent using the following accounting
1. In determining the fund's assets, the department shall not
include recoveries under s. 102.29 (1), Stats., unless they are in
process of payment and due within 30 days, or vouchers in the process
of payment which are not fully credited to the fund's account.
2. In determining the fund's liabilities, the department shall
estimate the ultimate reserves without discounting, and shall not
include reinsurance recoveries that are less than 60 days overdue.
(b) If the secretary determines that ultimate liabilities to the
fund on known and IBNR claims exceed 85% of the cash balance
in the fund, the secretary shall consult with the council on worker's
compensation. If the secretary determines that the fund's ultimate
liabilities exceed the fund's ultimate assets, or that there is
a reasonable likelihood that the fund's liabilities will exceed the
fund's assets within 3 months, the secretary shall file the certificate
of insolvency in s. 102.80 (3) (ag), Stats.
(10) TEMPORARY REDUCTION OR DELAY OF PAYMENTS FROM THE
FUND. (a) If the secretary files a certificate under s. 102.80 (3)
(ag), Stats., the department shall continue to pay compensation
under s. 102.81 (1), Stats., on claims reported to the department
prior to the date specified in that certificate after which no new
claims under s. 102.81 (1), Stats., will be accepted or paid.
(b) If the cash balance in the fund is not sufficient to pay all
compensation or other liabilities due in a timely manner, the
department may temporarily reduce or delay payments on claims
to employees, dependents of employees, health care providers,
vocational rehabilitation specialists and others to whom the fund
is liable. To manage the fund's cash flow, the department may
adopt a uniform, pro-rata reduction schedule or it may establish
different payment schedules for different types of liabilities. The
department may amend its payment schedule as necessary.
(c) The department shall provide written notice to each person
who does not receive timely compensation from the fund which
explains the reduced or delayed payment schedule adopted by the
department to resolve the cash-flow problem.
History: Cr. Register, July, 1996, No. 487, eff. 8-1-96; CR 03-125: am. (7) (a)
3. Register June 2004 No. 582, eff. 7-1-04; CR 15-030: r. (8) Register October
2015 No. 718, eff. 11-1-15.