A number of changes to the Wisconsin Worker’s Compensation Act were signed into law in April.

One significant change affects the way wage-loss benefits are calculated for part-time workers — employees who work fewer than 35 hours per week.

Under the new law, these workers’ hours will be expanded to 40 hours per week for the purpose of calculating wages if they are also employed by another employer, or they have worked part-time for less than 12 months before the date of injury. An employer can rebut this wage expansion if they can show proof that the employee chose to restrict their hours to part-time.

For other part-time workers, the average weekly wage will be calculated as the greater of:

• The actual average weekly earnings for the prior 52 calendar weeks prior to the injury, excepting any weeks they didn’t work, or
• Their hourly rate at the time of injury multiplied by the hours they were scheduled to work that week

Other changes signed into law in April include:

• An employee who is undergoing an independent medical examination required by an employer and workers’ compensation insurer may now have an observer present at the exam.
• The maximum weekly permanent partial disability benefit increased from $362 to $415 for injuries occurring on or after April 10, 2022. It will increase again to $430 for injuries occurring on or after January 1, 2023. This is the first increase in the rate since 2017.

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On April 1, 2022, the Iowa Supreme Court affirmed a district court’s finding in Chavez v. MS Technology LLC/Westfield Insurance Co. that an employee’s injury was a scheduled member injury to her shoulder rather than an unscheduled whole-body injury, agreeing that the definition of “shoulder” should not just be limited to the joint.

In 2018, Rosa Chavez filed a workers’ compensation claim seeking permanent partial disability benefits after she claimed to have suffered a shoulder injury while wringing out a mop at work for MS Technology.

An independent medical examination found that Chavez sustained an acute injury to her right shoulder that included the rotator cuff, tendons and cartilage around the shoulder joint and the attached muscles. Court records indicate Chavez underwent corrective surgery to repair the damage. The independent medical examination also found that the employee was at maximum medical improvement at the time of examination, and she had a 10% upper extremity impairment, which was equal to a 6% impairment of the whole body. Permanent partial disability benefits are generally higher for unscheduled whole-body injuries.

Chavez’s attorney argued that her injury should be classified as whole-body since her symptoms and impairment extend beyond the shoulder joint, and she should be awarded permanent partial disability benefits based on an unscheduled whole-body injury.

Under Iowa workers’ compensation law, the classification of a claimant’s injury as either scheduled or unscheduled determines the extent of the claimant’s entitlement to permanent partial disability benefits.

After several appeals, the case was brought before the Iowa Supreme Court, which upheld the district court’s finding that the employee’s impairment was only to the upper extremity, awarding Chavez permanent partial disability compensation benefits for a scheduled member injury.

This case further interpreted what constitutes a “shoulder” in light of the 2017 amendments to Iowa Code 85.34, sub. 2, that identify the “shoulder” as a scheduled member when classified for workers’ compensation benefits.

You can read the full court decision here .

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On May 16, 2022, the Minnesota Supreme Court upheld an award of workers’ compensation benefits to an employee for his hearing loss due to long-term exposure to noise over a 30-year period working for five employers.

In Sershen v. Metropolitan Council, the Minnesota Supreme Court found that Dennis Sershen had suffered occupational hearing loss during his time working in manufacturing. He worked in various roles in manufacturing starting in 1986, in which he claimed he was regularly exposed to hazardous noise levels on the job. He reported his hearing loss began around 1994, requiring him to wear hearing aids.

Following his retirement in 2017, Sershen filed a workers’ compensation claim for medical benefits for hearing loss and permanent partial disability against his five past manufacturing employers – Streater Inc., Truth Hardware Corp, SPX Corp, ATEK Cos. and his most recent employer, the Metropolitan Council.

Sershen then settled his claims against SPX and ATEK on a Pierringer basis prior to the hearing, with the two companies paying lump sums to the employee to be released from the litigation and making it so that neither the employee nor the other employers and their insurers could later collect from them.

At the hearing, the compensation judge ordered Sershen’s last employer, the Metropolitan Council, to pay his medical benefits, citing Minnesota Statute 176.135, subd. 5, which assigns liability to the employer and insurer on the date of the last exposure to the hazard. The judge found that Sershen’s last exposure to a noisy environment was at the Metropolitan Council and his last significant exposure was at SPX. The judge did not make any findings on whether the employee had sustained a disablement and was owed permanent partial disability, instead declaring the issue moot.

The Metropolitan Council appealed the judge’s decision and the Workers’ Compensation Court of Appeals (WCCA) affirmed. The WCCA also clarified that the permanent partial disability issue was moot because of the Pierringer settlement between Sershen and two previous employers, one of which was SPX, which was found to be Sershen’s last significant exposure and a contributing factor to his hearing loss.

The Metropolitan Council appealed again, and the Minnesota Supreme Court once again affirmed that under Minnesota Statute 176.135, subd. 5, the Metropolitan Council was liable for paying the medical expenses as it was the last exposure, regardless of whether that exposure was significant. The Minnesota Supreme Court then remanded the case to the hearing court to determine whether Sershen sustained a disablement and is therefore owed permanent partial disability benefits.

The Minnesota Supreme Court explained that if disablement is found, then under Minnesota Statute 176.66 the Metropolitan Council will be able to seek reimbursement for medical benefits paid to Sershen from the employer deemed the last significant exposure to the employee’s hearing loss, SPX. However, since SPX settled on a Pierringer basis, the employee would then have to reimburse the Metropolitan Council if disablement is found.

The Minnesota Supreme Court reasoned this approach matches the legislative intent which allows the employee to timely collect benefits while the employers and insurers parse out liability for the last significant exposure.

You can read the full court decision here .

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Policyholders continue to give SFM’s premium audit experience high marks in follow-up surveys.

For 2021, ratings from policyholders who completed online or mail-in audits averaged 4.1 out of 5, and ratings from those who had physical audits averaged 4.6 out of 5.

“We take pride in the high ratings and positive comments we get from policyholders on our premium audit process,” said Premium Audit Team Leader DeAnne Misgen. “We’re continually striving to provide excellent service and add convenience for our customers.”

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The SFM Foundation started out in 2008, with a mission to ease the burdens on families affected by workplace accidents. Fourteen years and $3 million later, SFM Foundation scholarships are changing lives by making college possible for students in need.

In May, the Foundation’s annual Iowa golf event saw record turnout and received rave reviews from participants. The Foundation’s Minnesota golf outing in June has become one of the largest charity golf tournaments in the state, and this year’s event did not disappoint! These annual Golfing for Scholarships tournaments are the primary source of fundraising for the scholarship fund, and SFM’s agency partners have played play a key role since the very beginning.

Since its inception in 2008, the Foundation’s scholarship program has helped 216 students, including the 13 new recipients announced this summer. Generous support from event sponsors and donors over the years has allowed the Foundation to grant scholarships totaling more than $3.2 million.

The SFM Foundation provides scholarships for students whose parents were seriously injured or killed while working for Minnesota or Iowa employers. SFM Foundation is an affiliate of Kids’ Chance of America  in Iowa and Minnesota and is also known as Kids’ Chance of Iowa. To learn more about the cause, visit sfmfoundation.com .

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A number of SFM employees took time recently to talk with students about issues in insurance, and careers in the field.

Senior Vice President and Chief Financial Officer Amanda Aponte presented to University of St. Thomas actuarial students on how COVID-19 has impacted the property casualty industry.

Internal Premium Auditor Toni Dvorak spoke as a panelist at the University of St. Thomas Dougherty Family College, sharing with students pursuing associate degrees in liberal arts. She talked about her experience working in the industry and gave advice on how to prepare for a job in insurance.

Loss Prevention Technical Leader Lee Wendel gave a guest lecture at the University of Minnesota’s Carlson School of Business attended by actuarial and business students in the school’s insurance program. He talked about how leadership can impact major loss sources for employee injuries, and how technology is impacting safety over time.

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SFM continues to expand its employee base in states beyond its Minnesota headquarters.

Recent additions include:

• Senior Claims Representative Julie Jauron (Iowa)
• External Premium Auditor Lee Burkle (Iowa)
• TPA Claims Representative Nichole McCain (Iowa)
• Claims Representative Rebecca Skrobis (Wisconsin)

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By all objective measures, SFM’s financial results for 2021 are outstanding. From reaching new heights in customer retention to setting records in new business and total written premium, the company has excelled in virtually every category of performance.

“Looking over the 2021 financials, there’s plenty for SFM to be proud of,” said SFM Senior Vice President Steve Sandilla. “An even greater source of pride for our staff is living up to the reputation of delivering a level of customer service that’s second to none.”

Highlights from 2021:

• SFM’s commitment to customer relationships has resulted in exemplary customer retention over the years. In 2021, SFM raised the bar even higher, by reporting an unprecedented policyholder retention rate of 96.6%.
• SFM added 6,329 policyholders, representing record new business premium of over $30 million.
• Written premium for the year totaled $212 million.
• SFM had a combined ratio of 90%, representing 10 straight years with a ratio below 100.

SFM’s book of business now includes more than 28,000 employers throughout the region. In addition, SFM’s Superior Point division serves approximately 13,000 policyholders as a servicing carrier for the Minnesota Workers’ Compensation Assigned Risk Plan. In 2021, SFM was also selected to serve 20% of the Wisconsin Worker’s Compensation Insurance Pool.

SFM is actively engaged in expanding business beyond its original home state of Minnesota. Well over one third of the company’s in-force premium now comes from SFM’s other core states: Wisconsin, Iowa, Nebraska, South Dakota and Kansas. After last year’s successful Kansas rollout, SFM is in the process of adding agents and policyholders in the state of Indiana in 2022.

According to Sandilla, independent insurance agents have played a critical role in the successes described above. SFM places a consistent emphasis on growing relationships with these valued partners that are mutually beneficial and lasting.

“Agents know that when they trust their clients to the work comp experts, they can count on the best customer service in the business,” Sandilla said. “Year in and year out, we do everything within our power to reward that trust with great results for our customers.”

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Hundreds of agencies have signed up to have their commissions deposited directly into their bank accounts. If you haven’t signed up yet, now is the time!

Enroll today by following these simple steps:

• Log into SFM Agency Manager (SAM) and click on the “Commissions” tab. (Note: This tab is automatically available to admin level users only. Administrators can give access to other SAM users in the “User Profiles” area by selecting the “Agency commissions contact” under “Contact type” on their profile.)
• Click “Add account” and follow the instructions.
• Wait for two small deposits to show up in your bank account (this typically takes 1-2 days). Then return to SAM and verify the account. This step helps us keep your account secure and make sure your commission payments get to the right place.

For full setup information you can download the instruction sheet . If you are unsure of your SAM user ID or have other questions, you can email us at agencymanagement@sfmic.com.

Viewing commission statements

Once you start receiving direct deposit commissions, you can return to SAM anytime to view commission statements. To do this, just click “Commissions” and then click “Commission statements,” which is located on the far left just below the green box that says “SAM.”

You can also have statements automatically emailed to you or anyone at your agency. Just click “Commissions” and then “Manage notifications” to set this up.

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SFM’s territory expansion successes continue as the team finds opportunities to get their feet on the ground in our two newest states.

More than 100 Kansas agencies have signed up to work with SFM and the total in-force premium written since we entered the state in September 2020 has far exceeded expectations, cresting the $1 million mark as we started 2022.

Much of that is thanks to our agency partnerships which further our efforts by helping us make new connections. Attending the KAIA Annual Convention in January boosted our visibility in the state even more.

“Several agencies have told us that we are their go-to work comp carrier,” said Senior Marketing Underwriter Jeff Magee. “And that was after just 18 months in Kansas.”

Kansas agents have told Magee they appreciate how easy it is to submit business through SFM Agency Manager (SAM), he said.

“They say SAM is intuitive and makes it easy to do business with us,” Magee said, “especially the built-in class code checker, quick online applications, and pay-as-you-go and credit card payment options.”

Entrance into Indiana

SFM kept the momentum going as the company entered Indiana this year, quickly outpacing our goals for written premium and appointed agencies early in the year. We’ve remained on track to hit additional milestones by the end of 2022.

“We’re still in the process of growing our agency force in Indiana,” said Business Development Specialist Cody Allen. “So far the agencies we’ve met with have been very welcoming and we look forward to making more connections as we continue to visit Indiana in the coming months.”

SFM’s territory expansion team has several more marketing trips to the state planned for the remainder of this year. The company has become a member of the Independent Agents of Indiana.

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