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Wisconsin Workers’ Compensation Update: What Act 145 Means for Claims Handling and Exposure Management
Wisconsin’s workers’ compensation system continues its steady evolution with the enactment of 2025 Wisconsin Act 145, signed by Governor Evers on March 30, 2026, and effective April 1, 2026. As with many prior reforms, this legislation emerged from the Workers’ Compensation Advisory Council and reflects a negotiated balance between labor, management, insurers, and regulators. For insurers, third‑party administrators, and self‑insured employers, Act 145 introduces several changes that directly affect claim valuation, litigation strategy, statute‑of‑limitations management, and administrative closure of files.
One of the most visible updates is the increase in permanent partial disability (PPD) rates. The maximum weekly PPD rate increases to $454.00 for injuries occurring on or after April 1, 2026, with a subsequent increase to $462.00 for injuries on or after January 1, 2027. While modest in isolation, these incremental increases raise overall indemnity exposure across a wide range of claims, particularly those involving high‑value scheduled injuries or spine ratings. Maximum PPD rates remained stagnant at $362.00 from 2017 through 2022 and now by 2027 will have increased by $100.00 or over 27% in a five-year period. Carriers and self‑insured employers should account for the increased value of newer‑date claims when evaluating reserves, settlement strategy, and long‑term exposure.
Act 145 also contains an important modification to Wisconsin’s historical approach to PPD stacking for repeat surgeries. Under prior law and administrative practice, minimum ratings for multiple surgical procedures to the same joint were commonly aggregated, often resulting in cumulative ratings far exceeding functional impairment. The new statute eliminates automatic stacking when an employee undergoes the same surgical procedure a second or subsequent time on the same limb. Instead, a healthcare provider must determine the PPD rating based on medical judgment, subject only to the limitation that the rating cannot be lower than that assigned for the initial procedure. This change applies to scheduled body parts such as arms and legs and does not extend to the spine (except for artificial disc implantations). While questions remain about how broadly “the same surgical procedure” will be interpreted, this provision offers insurers a basis to challenge inflated cumulative ratings in repeat‑surgery cases. In addition, this change should have immediate impact in bringing down PPD ratings following a second hip, knee and shoulder replacement involving the same body part and surgery.
Another key area of reform addresses statute‑of‑limitations tolling, an issue that has historically created uncertainty and prolonged exposure. Act 145 codifies that the filing of an application for hearing tolls the statute of limitations only for the duration of the litigation. Once a case is dismissed – whether with or without prejudice – the statute resumes running immediately. Critically, tolling does not add unused time to the back end of the limitations period. If the original statute would have expired during the pendency of the application, dismissal may effectively bar the claim the following day. For carriers and TPAs, this change underscores the importance of actively monitoring stalled or “parked” applications and reassessing exposure when dismissal becomes appropriate.
The Act further reinforces this emphasis on administrative efficiency by expanding the Department of Workforce Development’s authority to dismiss hearing applications that no longer present a justiciable dispute. If the Department determines at any time that there is no controversy requiring adjudication, it must dismiss the application without prejudice. In addition, when a compromise agreement is approved, the Department is now required to dismiss the pending application and formally close the case. These provisions apply retroactively and are intended to address the accumulation of long‑pending files that remain technically open despite the absence of an active dispute. From a claims management perspective, these changes create clear opportunities to drive closure and reduce artificial tolling of the statute of limitations.
Act 145 also updates several evidentiary and medical‑management rules with practical implications for claims handling. Certified reports from physician assistants and advanced practice registered nurses are now admissible not only for diagnosis and treatment but also for causation and extent of disability (via the WKC-16(b)). Audiologists are similarly authorized in hearing‑loss claims to file their opinions via the WKC-16(b). In addition, records from the Department of Vocational Rehabilitation may constitute substantial evidence if properly served before a hearing. A DVR Counselor no longer needs to testify to authenticate DVR records. These changes broaden the range of admissible evidence also provide an easier path for employees to establish causation and permanency.
The legislation also addresses insurer involvement during inpatient hospitalizations. Hospitals may no longer restrict insurer case‑management personnel from accessing records or participating in discharge planning when necessary to ensure appropriate housing or transportation for the injured worker. While the statute explicitly preserves the prohibition on directing medical care, it provides carriers with clearer access to information essential for coordinated return‑to‑work planning and mitigation of downstream costs.
Another significant procedural change is the elimination of mandatory restricted accounts for compromise payments. Administrative law judges can no longer require settlement funds to be placed in restricted financial institution accounts. Compromise payments, including lump sums, may now be paid directly to the employee. This change removes an administrative step from settlement processing.
Act 145 also expands mental‑only PTSD coverage under a specialized statutory framework. Emergency medical responders, emergency medical services practitioners, and volunteer or part‑time firefighters are now included alongside law‑enforcement officers and full-time firefighters for purposes of PTSD claims that are not accompanied by physical injury. Although these claims remain subject to defined eligibility requirements and limited benefit duration, insurers and self‑insured employers should anticipate increased filing activity and monitor developing case law regarding compensability standards.
Permanent total disability benefits get a notable adjustment as well. Supplemental benefits, which function as a kind of cost-of-living relief, were previously limited to workers injured before January 1, 2003. Act 145 extends that eligibility window to injuries occurring before January 1, 2020, dramatically increasing the number of permanently and totally disabled workers who can qualify for indexed supplemental payments. The bill raises the maximum weekly benefit for PTD recipients by 57%, from $669.00 to $1,051.00 and gives those who qualify annual raises. The amounts will vary based on when the recipients were injured and their earnings at the time. Insurers and self-insured employers should re-evaluate payments and reserves for those PTD cases with injuries between January 2, 2003 and December 31, 2019.
Finally, the Act strengthens compliance and enforcement mechanisms. Penalties for uninsured employers escalate significantly for repeat violations, reaching up to $4,000.00 or four times the unpaid premium. The Act also creates a standalone criminal offense for fraudulent workers’ compensation insurance applications and employee misclassification, coupled with mandatory insurer reporting obligations.
Taken as a whole, Act 145 reinforces Wisconsin’s long‑standing commitment to a predictable and administratively workable workers’ compensation system. Many of these changes – particularly around statute of limitations tolling, dismissal of non‑justiciable claims, limits on PPD stacking, and formal closure of compromised cases – are clearly aimed at curbing claim drift, reducing long‑pending exposure, and bringing greater finality to files that have lingered for years. For insurers and employers, these new changes offer meaningful tools to better manage claim lifecycles, enforce deadlines, and achieve defensible closure when disputes no longer truly exist. As these provisions begin to play out in real cases, questions and gray areas are inevitable. Our firm remains available to walk clients through how these changes affect their pending files, future claims handling strategies, and overall risk exposure.