Section 110.06. Liability due to sickness or accident disability payments.

 

(1)   Policy. Under s. 108.02 (13) (j) , Stats., an employer includes a person who makes sickness or accident disability payments if the person is classified as an employer under rules promulgated by the department. This section specifies the circumstances under which persons who make sickness or accident disability payments are to be considered employers for contribution purposes under ch. 108 , Stats. This section also specifies the procedures such employers shall follow in reporting payments and making contributions.

(2)   Amounts included as taxable wages. The department shall treat as wages for contribution purposes under ch. 108 , Stats. , any sickness or accident disability payments whether made by an employer, a third party payor, or a multiemployer benefit plan. Whichever employer, third party payor or multiemployer benefit plan is liable for payment of contributions under this section shall report these payments as wages on the contribution report for the quarter in which the payments are made.

(3)   Payments made directly by employers. An employer which makes sickness or accident disability payments directly to an employee or his or her dependents shall be treated as the employer for contribution purposes under ch. 108 , Stats. , with respect to these payments.

(4)   Payments by third party payors and multiemployer benefit plans.

(a) General rule for third party payors. Except as provided in pars. (b) to (f) , a third party payor which makes sickness or accident disability payments shall be treated as the employer for contribution purposes under ch. 108 , Stats. , with respect to these payments.

(b) Notice by third party payors to shift tax. If a third party payor timely notifies the employer for which services are normally performed of the amount of the sickness or accident disability payments made during any quarter, the employer shall be treated as the employer for contribution purposes under ch. 108 , Stats. The third party payor shall notify the employer, in writing, by the 15th day of the month after the end of the quarter in which the payments are made. In this paragraph, the employer for which services are normally performed is the last employer which made contributions on behalf of the employee to the plan or system under which the sickness or accident disability payments are being made and for which the employee worked prior to the sickness or disability.

(c) Third party payors as agents or insurers. A third party payor which makes sickness or accident disability payments as an agent for the employer or directly to the employer may not be treated as the employer for contribution purposes under ch. 108 , Stats. , unless the agency agreement so provides. The determining factor as to whether a third party payor is an agent of the employer is whether the third party payor bears any insurance risk and is reimbursed on a cost plus fee basis. If the third party payor bears no insurance risk and is reimbursed on a cost plus fee basis, the third party payor is an agent of the employer even if the third party payor is responsible for determining eligibility of the employee or dependent for sickness or accident disability payments. If the third party payor is paid an insurance premium and is not reimbursed on a cost plus fee basis, the third party payor is not an agent of the employer but rather a third party insurer and shall be treated as the employer for contribution purposes under ch. 108 , Stats. , unless the third party insurer complies with par. (b) .

(d) Relationship among third party insurers, multiemployer benefit plans and employers. A third party insurer under a contract of insurance with a multiemployer benefit plan which is required to make sickness or accident disability payments pursuant to a collective bargaining agreement shall be treated as the employer for contribution purposes under ch. 108 , Stats. , with respect to these payments unless the third party insurer notifies the multiemployer benefit plan of the amount of these payments, in writing, by the 15th day of the month after the end of the quarter in which the payments are made. If such timely notice is given, the multiemployer benefit plan shall be treated as the employer unless, within 6 business days after receipt of the notice, the multiemployer benefit plan notifies the employer for which services are normally performed of the amount of the sickness or accident disability payments made during the quarter. If the multiemployer benefit plan gives such timely notice, the employer for which services are normally performed shall be treated as the employer for contribution purposes under ch. 108 , Stats. In this paragraph, the employer for which services are normally performed is the last employer which made contributions on behalf of the employee to the plan or system under which the sickness or accident disability payments are being made and for which the employee worked prior to the sickness or disability.

(e) Multiemployer benefit plans as insurers. If the multiemployer benefit plan is the insurer under par. (d) , the multiemployer benefit plan shall be treated as the employer for contribution purposes under ch. 108 , Stats. , unless the plan notifies the employer of the amount of the sickness or accident disability payments, in writing, by the 15th day of the month after the end of the quarter in which the payments are made.

(f) Third party administrators for multiemployer benefit plans. A third party administrator which makes sickness or accident disability payments as an agent for a multiemployer benefit plan may not be treated as the employer for contribution purposes under ch. 108 , Stats.

(5)   Required records to retain; department's powers.

(a) Pursuant to s. 108.21 , Stats., each payor of sickness or accident disability payments shall maintain a true and accurate payment record for every individual who receives such payments so that the department may determine the payor's status and contribution liability under ch. 108 , Stats.

(b) The payment record shall include:

1. The full name, address and social security number of each individual who receives a sickness or accident disability payment;

2. The date on which the payment was made; and

3. The amount of the payment.

(c) Pursuant to s. 108.21 , Stats., the department may, at any reasonable time, inspect the records of a payor, or of any entity which the department has reason to believe may be a payor, which may show sickness or accident disability payments so that the department may determine the payor's status and contribution liability under ch. 108 , Stats.

(d) Each payor shall preserve the sickness or accident disability payment records for 6 years from the date on which the last payment was made.

(6)   Required records and reports to submit. Pursuant to ss. 108.14 and 108.21 , Stats., each payor of sickness or accident disability payments shall submit any records and reports concerning these payments which the department may request so that the department may determine the payor's status and contribution liability under ch. 108 , Stats. The department may require the payor to make verbal or written reports or both.

(7)   Applicable provisions. The provisions of ss. DWD 110.04 , 110.05 , 110.07 and 110.08 as these provisions relate to employers and employing units shall also apply to payors of sickness or accident disability payments.

History: Cr. Register, June, 1990, No. 414 , eff. 7-1-90; emerg. renum. from ILHR 110.11 and am. (1) and (7), eff. 2-19-93; renum. from ILHR 110.11 and am. (1) and (7), Register, May, 1993, No. 449 , eff. 6-1-93.