I have it on excellent authority that major changes to the Wisconsin workers' compensation system will be proposed with the release of the state's budget bill on February 3, 2015. The rumored changes are said to be significant, with some viewing it as a complete dismantling of the current workers' comp system there. In the absence of the release of the actual budget and proposals, it still sounds like the most dramatic reforms to hit a state since Tennessee and Oklahoma conducted complete overhauls of their WC systems.
Currently in Wisconsin, the Workers' Compensation Division is part of the larger Department of Workforce Development (DWD). On January 12, 2015, WC Division managers apparently learned of this proposal from the DWD Secretary's office. It is believed that the person behind this effort is DWD Secretary, Reggie Newsom. Under Newsom's proposal, the Worker's Compensation Division would be entirely removed from the auspices of DWD. Other agencies would absorb some of the functions, while some current practices and procedures would cease to exist.
One group that appears to be subject to the greatest changes would be Wisconsin's current Administrative Law Judges. Under the proposed changes, they would only be responsible for trying cases. They would not manage claims functions or act in any advisory role for industry stakeholders. They would also be barred from reviewing compromises in cases where attorneys represented the parties.
Other elements of the proposal include moving the insurance bureau staff to the Office of the Commissioner of Insurance (OCI). Administrative Law Judges would report to the Hearings and Appeals section at Department of Administration (DOA). Many of the proposed changes will require alterations to the Wisconsin Workers' Compensation Act, and it is unclear what level of legislative support exists for those statutory changes.
From this point forward, this story will likely take similar trajectories to other reform efforts we have seen around the nation. Opponents will cite the relative stability and success of the Wisconsin workers' compensation system, and object to the disruption of a system they view as working well. Proponents will claim that the changes are necessary to streamline operations and improve efficiency within an evolving work environment. The changes, which appear will lessen staff in the WC Division, along with a potential reduction in Administrative Law Judges by shifting responsibilities to other existing divisions, will be seen by some as a reduction in bureaucratic overhead.
I will say that this news will be, for many, unexpected as Wisconsin hasn't exactly been the bastion of controversy in the workers' compensation arena of late. There are many other jurisdictions where needed reforms are more apparent – like California where reforming comp is seemingly a full time and permanent position. The cycle of reform, however, seems almost unavoidable, and as other states grappling with recent reforms continue to wrangle over the changes, it is inevitable that another must begin the process anew. Where the dust settles in one region, it must stir again in another.
So, keep your eyes peeled towards the Badger State, as the drama is certain to unfold. I don't know about you, but I am buying front row tickets. Those Wisconsinites really know how to scrap.