Maciorowski, Sackmann & Ulrich
Attorneys At Law
221
North LaSalle Street, Suite 3600
Chicago, Illinois 60601
(312) 236-4600
Fax (312) 236-8459
Amendments
to Workers Compensation Act
On July 20, 2005, Governor Blagojevich signed into
law the most sweeping changes in the Illinois
workers’ compensation system in more than twenty years. These changes gave injured employees
increased compensation values, increased sanctions against employers and added
new benefits such as temporary partial disability benefits. These changes gave employers medical fee
schedules, utilization review and increased protection against fraudulent
claims.
Here are the changes and the comments of
Maciorowski, Sackmann & Ulrich on these new changes.
Medical Fee Schedule – New
Section 8.2 of the Act requires the Commission to establish a medical fee
schedule effective February 1, 2006. The
maximum allowable payment for medical treatment and procedures covered under
Section 8(a) of the Act shall be the lesser of the health care provider’s
actual charges or the fee set by the schedule.
The fee schedule will set fees at 90% of the 80th percentile
of the actual charges with a geographic area based on geozip (a geographic area
with the same first three digits of the zip code), utilizing information
contained in employers’ and insurers’ national databases. The fee schedule will be adjusted yearly
based on percentage changes to the Consumer Price Index.
Effective date:
February 1, 2006
Comment – We feel that this change will narrow the gap
between what a medical provider can charge for work-related versus non
work-related conditions, removing any subtle incentives a medical provider may
have had in the past to causally connect a person’s condition to his or her
employment. This provision does not
restrict or negate your ability to negotiate better rates with your medical
providers. We believe that this is a
positive change for employers if utilized correctly.
Workers’ Compensation
Medical Fee Advisory Board – New Section 8.3 of the Act creates a Workers’
Compensation Medical Fee Advisory Board to advise the Commission on the
establishment of fees for medical services and accessibility of medical
treatment. The Board consists of 9
members appointed by the Governor with the advice and consent of the
Senate. Of the 9 members, 3 represent
the employee class, 3 represent the employer class and 3 represent the medical
provider class. Each member serves for a 4-year term and continues to serve until
a successor is appointed.
Effective date:
Effective immediately
Comment – We, as employers, have to take an active role in
making sure that the employer representatives focus on maintaining or reducing
medical fees against the pressures placed on them by the physician and employee
representatives to increase fees based on allegation that physicians are no
longer interested in or are refusing to treat injured workers based on the
current medical fee schedule. Allows all
interested parties the ability to give appropriate feedback in regards to the
implementation of the medical fee schedule allowing, where necessary, the
appropriate adjustments.
Utilization review – New
Section 8.7 of the Act provides that an employer may engage in utilization
review to evaluate the quality and medical necessity of proposed or provided
health care service and sets forth requirements for a utilization review
program. Any person conducting a utilization review program for workers’
compensation must register with the Department of Financial and Professional Regulation
once every 2 years and certify compliance with Workers’ Compensation
Utilization Management standards or Health Utilization Management Standards or
URAC sufficient to achieve URAC accreditation or submit evidence of
accreditation by URAC (or an alternative standard certified by the Secretary of
Financial and Professional Regulation).
The Commission will consider utilization review,
along with all other evidence and in the same manner as all other evidence, in
the determination of the reasonableness and necessity of the medical bills or
treatment. When an employer denies
payment or refuses to authorize medical services, if that denial or refusal
complies with the registered utilization review program that complies with all
requirements under Section 8.7 there shall be a rebuttable presumption that the
employer shall not be responsible for payment of additional compensation under
Section 19(k) of the Act. If the denial
or refusal does not comply with a utilization review program registered under Section
8.7 and does not comply with other requirements of Section 8.7, then that will
be considered by the Commission, along with all other evidence and in the same
manner as all other evidence, in the determination of whether employer is
responsible for the payment of additional compensation under Section 19(k) of
the Act.
Effective Date:
Effective immediately
Comment – The ability of an employer to engage in
utilization review to evaluate the quality and medical necessity of proposed or
provided health care services, is a very meaningful tool in controlling medical
costs and allows the employer to avoid the risk of a penalty and possible 1%
interest per month if successful. Prior
to the enactment of this section, the employer was left with a non medical
qualified arbitrator making decisions as to what is reasonable or
necessary. Now, the employer has the
ability to have a qualified medically-trained individual make the appropriate
decision. The key here is to identify as
quickly as possible an accredited and registered utilization review to evaluate
and determine the appropriateness of care by those physicians selected by the
injured employee.
Employer to pay charges
directly to provider within 60 days – New Section 8.2(d) of the Act provides that when
an employee notifies a medical provider that the treatment or service is for a
work-related injury, the provider shall bill the employer directly. If the employer does not dispute payment of
first aid, medical, surgical, or hospital services, Section 8(a) provides that
the employer shall make payment directly to the provider on behalf of the
employee. The employer is required to
pay the bill within 60 days of receipt of the bill as long as the claim
contains substantially all the required data elements necessary to adjudicate
the bills. Unpaid bills incur interest
at the rate of 1% per month payable to the provider. A provider cannot hold an employee liable for
costs related to the non-disputed services for a compensable injury and shall
not bill or attempt to recover from the employee the difference between the
provider’s charge and the amount paid by the employer or insurer on a
compensable injury.
Provider prohibited from
seeking payment of bills from employee while claim is pending – New
Section 8.2(e) (5-20) of the Act provides a provider may seek payment of the
actual charges from the employee if the employer notifies a provider that it
does not consider the illness or injury to be compensable. If an employer notifies a provider that it
will pay only a portion of the bill, the provider may seek payment of the
unpaid portion from the employee up to the lesser of the actual charge, the
negotiated rate, or the rate in the fee schedule.
If an employee informs the provider that a claim is
on file at the Commission, the provider must cease all efforts to collect
payment from the employee. Any statute
of limitations or statute of repose applicable to the provider’s efforts to
collect from the employee is tolled from the date the employee files the Application
with the Commission until the date that the providers is permitted to resume
collection.
While the claim at the Commission is pending, the
provider may mail the employee reminders that the employee will be responsible
for payment of the bill when the provider is able to resume collection
efforts. The provider may request
information about the Commission claim and if the employee fails to respond or
provide the information within 90 days, the provider is entitled to resume
collection efforts and the employee is responsible for payment of the
bills. The reminders shall not be
provided to any credit agency.
Upon final award or settlement, a provider may
resume efforts to collect payment from the employee and the employee shall be
responsible for payment of any outstanding bills plus interest awarded. If the service is found compensable, the
provider shall not require a payment rate, excluding interest, greater than the
lesser of the actual charge or payment level set by the Commission in the fee
scheduled. The employee is responsible
for payment for services found not covered or compensable unless agreed
otherwise by the provider and employee.
Services not covered or not compensable are not subject to the fee
schedule.
If a provider is informed that the employee
participates in a group health plan, the provider may submit the claim for
services to the group plan. If the
services are covered by the plan, the employee’s responsibility is limited to
applicable, deductibles, co-payments or co-insurance.
Effective date:
Immediately
Comment– This bill puts Illinois in line with most
jurisdictions. Given the language in the
bill that an employee may be obligated to pay the actual charges of a medical
provider if the condition is found to be non compensable, does that give the
employer the argument to their employees to treatment with our designated
physician who the employer has a contractual agreement with versus the
employee, or to select a physician under the current non occupational health plan
which would then, in turn, limit the physician to the charges provided under
said plan?
This provision may also reduce the amount of the
potential set-aside agreements necessitated under Medicare/Medicaid.
Burial expense –
Section 7(f) of the Act is amended to increase the burial expense from
$4,200.00 to $8,000.00.
Effective date:
Accidental injuries or diseases that occur on or after February 1, 2006
Comment – This increase is limited to very few cases and
is something which the employer should have no objection to, especially in
light of what it actually costs to bury a loved one.
Increase in maximum death
benefits – Section 8(b) 4.2 of the Act is amended to
increase the maximum death benefit under Section 1 of the Act from the greater
of $250,000 or 20 years to the greater of $500,000 or 25 years.
Effective date:
Accidental injuries or disease that occur on or after February 1, 2006
Comment – This substantially increases an employer’s
liability for a compensable death. What
the employer should do proactively is take advantage of Section 4(i) of the
Act, and provide in the life insurance policies that are made available to
employees that said payment of life insurance will act as a credit or reduction
on any death that arises out of and in the course of employment.
Increase in minimum
compensation rates – Section 8(b) of the Act is amended to increase
the minimum rate of TTD and PPD to 66-2/3% of the sum of the Federal minimum
wage or the Illinois
minimum wage, whichever is higher, multiplied by 40 hours. The percentage rate shall be increased by 10%
for each spouse and child, not to exceed 100% of the total minimum wage
calculation. The TTD or PPD rate shall
not exceed the employee’s average weekly wage.
As of 2/1/06, the Illinois minimum wage of $6.50 per hour will
apply.
Base rate: $6.50
X 40 = $260
Single person: $260 X 66
2/3% = $173.32
Person
with 1 dependent: $260 X 77
2/3% = $199.32
Person
with 2 dependents: $260 X 86
2/3% = $225.32
Person
with 3 dependents: $260 X 96
2/3% - $251.32
Person
with 4+ dependents: $260 (100% of calculation)
Section 8(b) 4.1 of the Act is amended to increase
the minimum rate for the amputation of a member or enucleation of an eye under
Section 8(e) to 50% of the statewide average weekly wage.
Effective date:
Accidental injuries or diseases that occur on or after February 1, 2006
Comment – This change in the calculation of benefits will
have a significant impact on employers who provide part-time work or who
provide jobs at minimum wage. The way
that the increase is structured, it will result in an economic disincentive to
return to work in that an employee can earn up to his or her average weekly
wage, tax free, and negate the costs associated with working, such as
transportation, child care costs and meals.
The employer in these situations, will need to take a very aggressive
approach to returning an injured employee to modified or alternative work, and
take a very aggressive approach in monitoring the healing process to remove, as
quickly was possible, the restrictions to return the employee as quickly as
possible, to full-time employment. The
increase in minimum compensation is driven by the number of dependents or by
increasing an employee’s hours from less than 40 hours to 40 hours.
This provision will also impact the PPD rate on a
minimum wage earner from 60% to 66 2/3% with that rate also being increased by
the number of dependents and by an increase in hours from less than 40 hours to
40 hours.
Increase in the maximum
rate for 8(d) (1) wage differentials – Section 8(b) of the Act is amended to provide
that the maximum rate for a wage differential award under Section 8(d) (1) is
100% of the statewide average weekly wage.
Effective date:
Accidental injuries or diseases that occur on or after February 1, 2006
Comment – By increasing wage differential awards under
Section 8(d) (1) to 100% of the statewide average weekly wage, we are
increasing the cap on maximum wage differential by 42.35% taking it from
$567.87 to $788.99. What this should
force the employer to focus on is early identification of whether or not the
employee is going to be able to return to his or her former position with or
without some accommodation, and early vocational rehabilitation, beating the employee
to the punch in terms of establishing an accurate and available income versus
one where the employee, for purposes of alleging higher differential, takes a
job under the current case law that is within a reasonable benefit payment
range but not at the higher range.
Temporary Partial
Disability benefits defined – Section 8(a) of the Act is amended to provide
that when an employee is working light duty on a part-time basis or full-time
basis and earns less than he or she would be earning if employed in the full
capacity of the job or jobs, the employee shall be entitled to temporary
partial disability (TPD) benefits. TPD
shall be paid at two-thirds of the difference between the average amount that
the employee would be able to earn in the full performance of his or her duties
in the occupational in which he or she was engaged at the time of the accident
and the net amount which he or she is earning in the modified job for the
employer or in any other job that the employee is working.
Effective date:
Accidental injuries or diseases that occur on or after February 1, 2006
Comment – This section gives employers more leverage in
returning employees back to work who have temporary restrictions. It has always been our position that there
are three types of light duty. The first, when a regular job is modified to
enable the temporarily-disabled employee to return to his work; the second
where the employee is sent to a different job, but it is within that employee’s
physical restrictions, and the third kind is make work.
Under these changes, employers now have more
leverage in returning employees to the make-work type of job. One way to
maximize the employer’s benefit in those situations, it to have every foreman,
supervisor or department head create a list of functions or jobs that they
would like to have completed, but never had the manpower or resources to hire
someone to perform them. After those
lists are developed, go through the list and everyone who is home, collecting
temporary total disability benefits, should be matched up with one of those
temporary positions. You have converted a loss-center into a profit center by
having employees come back to work; performing odd jobs that employers would
like have done, but never had the resources to have done before.
Maintenance benefits
defined - Section 8(a) of the Act is amended to provide
that the maintenance benefit for vocational rehabilitation shall not be less
than the employee’s temporary total disability rate. Maintenance shall also include costs and
expenses incidental to the vocational rehabilitation program.
Effective date:
Accidental injuries or diseases that occur on or after February 1, 2006
Comment – This is a new section to the Act, but in the
past, employers have always treated maintenance benefits identical to temporary
total disability benefits. When
providing these benefits, the employee is required to actively participate in
the vocational rehabilitation process.
If the employee fails to actively participate, then the employer should
file with the Commission a petition asking that they suspend the payment of
maintenance benefits until the employee fully cooperates.
Increase in maximum weeks
for disfigurement and specific loss of scheduled body parts –
Section 8(c) of the Act is amended to increase the maximum number of weeks for
disfigurement from 150 weeks to 162 weeks.
Section 8(e) of the Act is amended to increase the
maximum number of weeks payable as follows:
Thumb: from
70 weeks to 76 weeks
First, or index finger: from
40 weeks to 43 weeks
Second, or middle finger: from 35 weeks
to 38 weeks
Third, or ring finger: from
25 weeks to 27 weeks
Fourth, or little finger: from 20
weeks to 22 weeks
Great toe: from
35 weeks to 38 weeks
Each toe other than the great toe: from 12 weeks to 13 weeks
Hand: from
190 weeks to 205 weeks
Arm: from
235 weeks to 253 weeks
Amputation
above elbow: from 15
additional weeks to 17 additional weeks
Amputation
at shoulder joint: from 65
additional weeks to 70 additional weeks
Foot: from
155 weeks to 167 weeks
Leg: from
200 weeks to 215 weeks
Amputation
at leg above knee: from 25
additional weeks to 27 additional weeks
Amputation
at hip joint: from
75 additional weeks to 81 additional weeks
Eye: from
150 weeks to 162 weeks
Enucleation: from 10
additional weeks to 11 additional weeks
Hearing loss:
One
ear: from
50 weeks to 54 weeks (Workers’ Compensation Act)
Both
ears: from
200 weeks to 215 weeks
Testicle: from
50 weeks to 54 weeks
Both
testicles: from
150 weeks to 162 weeks
Effective date: HB2137
does not list an effective date for these increases; therefore, they become
effective immediately for accidents occurring on or after 7/20/05 through 11/15/05 and from February 1, 2006 forward.
Comment – There is no question that this section increases
the costs for permanent partial disability and disfigurement. It does not, however, increase benefits under
8(d) (2) – man as a whole. The question
is whether, given the increase in weeks, will the Commission be more
conservative in the awarding of percentage loss of use. It is our position that the Commission will
probably not reduce the percentage loss of use, but will increase the
permanency awards based on number of weeks allocated. What the employer should do, in preparation
of defending the case, is focus on what the actual outcome of the injury is in
terms of ability to work, with or without restrictions, or ability to accept
and work overtime. It will be mandatory
on your part to document the actual impact of the injury to the workplace, as
well as the impact of the injury on the employee’s ability to function outside
of the workplace by demonstration of whatever outside activities you are aware
of. The more the employer can show that
the employee is back to pre-injury state, the lesser the award should be.
Vocational rehabilitation
certification – Section 8(a) of the Act is amended to provide
that any vocational rehabilitation counselor who provides services under the
Act shall have appropriate certification that designates he or she is qualified
to render opinions relating to vocational rehabilitation. Vocational rehabilitation may include, but is
not limited to, counseling for job searches, supervising a job search program,
and vocational retraining, including education at an accredited learning
institution. The employee or the
employer may petition the Commission to decide disputes relating to vocational
rehabilitation, including the payment of the vocational rehabilitation program
by the employer.
Effective date:
Accidental injuries or diseases that occur on or after February 1, 2006
Comment – The certification of vocational rehabilitation
providers is, in my opinion, a positive, in that in most cases the lack of
certification is on the part of the expert hired through the employee. Under the Commission rules, the employer,
after a period of disability, was required to file with the Commission a
vocational rehabilitation plan. We are
firm believers that the employer should again look at that requirement and put
in place a vocational plan as soon as it has been determined that an employee
cannot return to his or her job or the likelihood of same exists. By being proactive here, the chances are that
we will have more control over the vocational plan than if the employee selects
the provider. Reference should be made
to 50 Illinois Administrative Code, Chapter 2, Section 7110.10-.80 at et
seq.
Expedited hearings –
Section 19(b) of the Act is amended to provide for an expedited arbitration
hearing at the request of an employee who is not receiving or has not received
TTD, TPD, medical, vocational rehabilitation, maintenance, or other benefits,
regardless of whether the employee is working.
An employer may request an expedited hearing on the
issue of whether the employee is entitled to such benefits as long as the
employer continues to pay compensation to the employee until a decision is
rendered that the employee is not entitled to benefits or has been released to
return to work by the treating physician or has returned to work.
An insurance carrier, self-insured or group
self-insured may also request an expedited hearing if 2 or more carriers,
self-insured’s, or group self-insured’s dispute coverage for the same injury if
all benefits are being paid to the employee and the issue of coverage is the
only issue in dispute.
Neither the employer nor employee is entitled to an
expedited hearing where the employee has returned to work and the only benefit
in dispute amounts to less than 12 weeks of TTD.
A copy of the Application for Adjustment of Claim
shall be attached to the notice for an expedited hearing. The Commission is required to file its
decision on review of an expedited hearing no later than 180 days from the date
the Petition for Review is filed.
Effective date:
Effective immediately
Comment – Section 19(b) of the Act as amended provides a
meaningful tool for the employer in terms of managing its workers’ compensation
cases. Now, the employer has the ability,
as long as it is paying the employee compensation, to move for an expedited
hearing on the issue of causation, TTD, medical, vocational rehabilitation,
maintenance or other benefits.
In the past, the employer was unable to obtain a
quick resolution of an issue unless the employee was the moving party. Now the employer has the ability to be the
“mover” or the aggressor in the determination of whether or not an employee is
entitled to benefits.
In those cases where you question whether or not an
injury arose out of or in the course of employment, or whether the employee is
entitled to be off work, collecting TTD benefits, or entitled to medical care,
it is our position that you should move as quickly as possible to obtain a
resolution of that issue.
We now have the ability, as long as we are paying
the employee, to gather our information in terms of accident, causal
connection, TTD or medical, and put our “ducks in a row” and file for an
immediate hearing while we are prepared, and obtain a quick resolution as to
the issue. We now have the ability to
address the question of accident or causal connection quickly, as opposed to
waiting months or years, which exposes ourselves to benefits if we are wrong. We now have the ability to push the issue of whether
or not an employee is temporarily totaled disabled without the exposure of
months or years, and we now have the ability to decide the issue of medical
care now, as opposed to months or years later.
If we win on the issue of accident, TTD or medical, the case is over as
to that issue. If we lose on the
question of accident/TTD or medical, we can then make a decision to medically
manage versus sitting back, exposing ourselves to months or years of benefits.
This gives us the ability to present the case when
the facts and circumstances are fresh in the minds of our witnesses, and
prevents us from losing valuable witnesses/co-employees as time goes on.
This ability to move the case quickly also
eliminates or reduces the sympathy factor that arbitrators now have with
employees in terms of substantial medical care or lost time in that before when
these cases appeared, one or two years later, an arbitrator was denying
significant lost time or medical, now he is denying minimal lost time or
medical.
Certified treating
records, reports and bills admissible – Section 16 of the Act is amended to provide that
in addition to certified hospital records, certified reports, records and bills
of a treating physician or other healthcare provider that renders treatment to
the employee as a result of the accidental injuries shall be admissible without
any further proof. Records, reports, and
bills received as a result of a subpoena are presumed to be certified.
Effective date:
Effective immediately
Comment – There is nothing good about this section in
terms of your ability to defend the case.
It takes away from the employer the ability to cross examine the
provider in terms of the basis of their opinion. We are going to rely on the case of Paoletti
v. Industrial Commission, 1st District, Case No. 1-95-2007WC,
and argue that the “United States Supreme Court has held that administrative
agencies, in exercising their adjudicatory functions, are bound by the due
process clause of the fourteenth Amendment to the United States Constitution to
give the parties before them a fair and open hearing.” Due process requires that all parties, in
proceedings before administrative agencies, have an opportunity to
cross-examine witnesses and to offer evidence in rebuttal. ” We are also going
to rely on Professor Larson as stated in his treatise: “nothing is more repugnant to our traditions
of justice than to be at the mercy of witnesses one cannot see or challenge, or
to have one’s rights stand or fall on the basis of unrevealed facts that
perhaps could be explained or refuted.”
3a.Larson, Law of Workers’ Compensation, Section 79.83(a), at 15-497
through 15-499 (1994).
In addition, what we are recommending to our
clients is that they understand the challenge that this new amendment gives us
and that we have our expert review as soon as possible, the opinions of the
employee’s providers and provide us with a basis in writing, to discredit their
opinions.
Employer to deliver
employee expense with notice of Section 12 examination –
Section 12 of the Act is amended to require the employer to include payment for
the employee’s travel expenses with the notice to the employee of the time and
place of the examination.
Effective date:
Effective immediately
Comment – We believe this to be appropriate and by so
doing, we have an argument to suspend and forfeit benefits by the employee’s
failure to attend the scheduled examination. We also recommend that when
Section 12 examinations are scheduled, that you indicate in the body of the
letter that you will look to the employee to pay any cancellation fee should
they fail to attend, identifying what that cancellation fee is.
Time to file for review
8(d) (1) award based on change in disability increased –
Section 19(h) of the Act is amended to provide that a petition to review an
award on the grounds that the disability has subsequently recurred, increased,
diminished or ended is increased from 30 months to 60 months in the case of an
award under Section 8(d) (1).
Effective date:
Effective immediately
Comment – This may appear to be a favorable change on
paper to the employer, but in fact, it may not be. An employer may look at this section and say
“hey, we caught the employee earning more money, therefore, reduce the wage
differential.” What the Act says is they
will focus on disability, it does not say they will focus on economic
changes. What we need to do is, not only
identify that the employee is working for greater pay, but we need to support
our 8(d) (1) petition with a medical exam confirming that, in fact, the degree
of disability has changed.
It is our position that when currently trying a
wage-loss case, if you later want to challenge under 8(d)(1), that you ask for
a full written decision asking the arbitrator to identify as much as possible,
the degree of disability.
19(k) Penalties
determination – Section 19(k) of the Act is amended to provide
that in determining penalties, the Commission shall consider whether an
arbitrator has determined that the claim is not compensable or whether the
employer has made payments under Section 8(j).
Effective date:
Accidental injuries or diseases that occur on or after February 1, 2006
Comment - This provision makes it more difficult for the
Commission to write penalties against employers who provide 8(j) benefits while
disputing the work relatedness. It is
our position that if you do not question disability, meaning need for care and
treatment or lost time, but merely are challenging accident or causal
connection, that you make the appropriate 8(j) benefits. This provision also gives us the ability to
rely on a favorable arbitrator decision should the Commission later reverse.
19(l) Penalties increased –
Section 19(l) of the Act is amended to provide for an increase in the penalty
for unreasonable delay of the payment of TTD benefits, and medical benefits
from $10 a day to $30 a day and from a maximum of $2,500 to a maximum of
$10,000.
Section 19(l) also adds the provision that if the
employee has made written demand for payment of benefits under Section 8(a) or
8(b), the employer shall have 14 days after receipt of the demand to provide a
written reason for the delay. If the
demand is for medical benefits, the time for the employer to respond does not
begin until the expiration of the 60-day period allotted the employer to pay
medical bills under Section 8.2.
Effective date:
Accidental injuries or diseases that occur on or after February 1, 2006
Comment – This provision requires the employee to make a
written request for payment of benefits under Section 8(a) or 8(b). The provision does require us to respond in
writing within 14 days. Given the
multiple hands that may handle this petition, i.e., employer, TPA/carrier
and/or attorney, this is a rather tight timetable to meet. Employers need to have in place special
handling provisions or procedures when an 8(a) or 8(b) request is made. Failure to answer within the 14 days will
result in penalties being awarded.
Section 19(l) also provides that the employers need
to respond to medical benefits requests does not begin until the expiration of
the 60-day period allotted to pay medical bills under Section 8(2). It is our recommendation that medical bills
from employee providers always be submitted for medical utilization
review.
Section 19(l) of the Act does increase the daily
penalty amount from $10 a day to $30 a day, when there is unreasonable delay
for denial of benefits. The maximum was
increased from $2,500 to $10,000. Again,
we encourage the employers to have either an accident or causation dispute
documented or a medical opinion on issues of TTD or medical care when a
decision as to non payment of TTD or medical is made.
Criminal penalties for
workers’ compensation fraud; establishes a fraud and insurance non-compliance
investigatory unit – New Section 25.5 (a) through (g) of the Act set
forth fraud provisions and the penalties for violating those provisions. Any person, company, corporation, insurance
carrier, healthcare provider, or any other entity that violates any of the
fraud provisions is guilty of a Class 4 felony and must pay complete
restitution in addition to any fine imposed.
A unit is established within the Division of Insurance of the Department
of Financial and Professional Regulation to investigate violations of the fraud
and insurance non-compliance provisions of Section 25.5.
Effective date:
Effective immediately
Comment – This provision applies to both employers and
employees. It requires us to document
and verify information received from other parties before relying on same as
true. This amendment adds integrity to
the process and reminds us of the importance of documentation. We believe that
the purpose or intent of this section was good.
Benefit ineligibility –
Subsection (f) of Section 25.5 of the Act provides that any person convicted of
fraud shall be subject to penalties in the criminal code and shall be
ineligible to receive or retain compensation benefits if they were owed or
received as a result of the fraud for which the recipient was convicted.
Effective date:
Applies to accidents that occur on or after July 20, 2005.
Civil Liability –
Subsection (g) of Section 25.5 of the Act provides that any person convicted of
fraud who knowingly obtains, attempts to obtain, or causes to be obtained any
benefits by making a false claim or who knowingly misrepresents any material
fact shall be civilly liable to the payor of benefits in an amount equal to 3
times the value of the benefits or insurance coverage wrongfully obtained or
twice the value of the benefits or coverage attempted to be obtained, plus
reasonable attorney’s fees and expenses incurred in bringing the claim.
Effective Date:
Applies to accidents that occur on or after July 20, 2005
Insurance Non-Compliance
Penalties Increased
Work-Stop Order
- Section 4(d) of the Act is amended to
provide that whenever a panel of 3 Commissioners (1 labor, 1 business and 1
public), with due process and after a hearing, finds that an employer knowingly
failed to provide insurance coverage, the failure is deemed an immediate
serious danger to public health, safety and welfare. The Commission may serve a work-stop order on
the employer, requiring the cessation of all business operations at the
employer’s place of business or job site until the employer provides proof of
insurance coverage. A work stop order
issued by the Commission is appealable to the Circuit Court.
Effective Date:
Effective immediately
Criminal penalties for
knowing failure to insure – Section 4(d) of the Act is amended to provide
that in individual employer, corporate officer or director of a corporate
employer (except a publicly owned corporation), partner or an employer
partnership, or member of an employer limited liability company who knowingly
fails to provide insurance coverage is guilty of a Class 4 felony. An employer, corporate officer or director
(except a publicly owned corporation), partner or member of a limited liability
company who negligently fails to provide insurance coverage is guilty of a
Class A misdemeanor. Each day’s
violation constitutes a separate offense.
The criminal penalties shall not apply where there
exists a good faith dispute as to the existence of an employee
relationship. Evidence of good faith
shall include, but not limited to, compliance with the definition of employee
as used by the Internal Revenue Service.
Effective Date:
Effective immediately
Uninsured employer liable
in civil action – Section 4(d) of the Act is amended to provide
that an employer who knowingly fails to comply with the insurance coverage
requirements of the Act is not entitled to the benefits of the Act during the
period of non-compliance. An injured
employee can pursue a civil action against the employer and the employer shall
not avail itself of the defenses of assumption of risk or negligence or that
the injury was due to a co-employee. In
the civil action, proof of the injury shall constitute prima facie evidence of
negligence on the part of the employer and the burden shall be upon the employer
to show freedom of negligence resulting in the injury. The employee or the employee’s dependents
may, instead of proceeding in a civil action, file a claim with the Commission. All proceedings under subsection 4(d)
are to be reported annually to the Workers’ Compensation Advisory Board.
Effective Date:
Effective immediately
Attorney General to bring
Section 4(d) civil penalty base before Commission –
Section 4(d) of the Act is amended to provide that upon investigation of
the insurance non-compliance unit of the Commission, the Attorney General has
the authority to prosecute employees to recover the civil penalties provided
for in Section 4(d).
Effective Date:
Effective immediately
Employer who transfers
property to avoid payment of compensation guilty of Class 4 felony –
Section 4(d) of the Act is amended to provide that an employer, corporate
officer or director of a corporate employer or, partner of an employer
partnership, or member of an employer limited liability company who knowingly
transfers, sells, encumbers assigns or in any manner dispose of, conceals,
secrets, or destroys any property belonging to the employer, officer, director,
partner, or member to avoid payment of compensation is guilty of a Class 4
felony.
Effective Date:
Effective immediately
Fund Created to Pay
Benefits to Injured Workers of Non-Compliant Employers
Injured Workers
Benefit Fund – Section 4(d) of the Act is amended to create the
Injured Workers’ Benefit Fund consisting of penalties and fines collected under
Section 4(d). The fund is to be
used to pay workers’ compensation benefits to the injured employees of
uninsured employers when those employers fail to pay. The fund disburses money annual after July 1, 2006 to
claimants who have within the previous fiscal year obtained a final award for
benefits against the employer and the Injured Workers’
Recent Appellate
Court Victory on Permanent Total Cases
In March of 2007, Maciorowski, Sackmann & Ulrich obtained
a favorable opinion in the Illinois Appellate Court Workers’ Compensation
Division regarding an injured employee’s burden of proof when claiming that he
is totally and permanently disabled. In Westin Hotel v. Industrial Commission of Illinois and Theodoros Vakalidis, (Slip opinion No.
1-06-1728 WC. March 27, 2007.) the Arbitrator, the Illinois Workers’ Compensation
Commission and the Circuit Court had all found the Petitioner totally and
permanently disabled and awarded him lifetime benefits.
On March 27, 2007, the Illinois Appellate Court reversed
those findings, agreeing with our position that the Petitioner did not carry
his burden of proof in support of his claim that he was totally and permanently
disabled. Although the Petitioner’s
physician testified that the Petitioner was permanently and totally disabled
from gainful employment, the Appellate Court concluded that:
However, merely proffering medical
evidence of permanency is insufficient to shift a burden to the employer. Indeed, the most recent cases making an odd
lot determination on the basis that there is no stable job market for a person
of the claimant’s age, skills, training and work history have required evidence
from a rehabilitation services provider or a vocational counselor.
Therefore, in reversing the
Commission, the Appellate Court noted:
In this case, we conclude that claimant has not carried his burden
of establishing by a preponderance of the evidence that he falls into the
odd-lot category.
This is a huge victory for employers because the employee
can no longer meet his burden proof by medical testimony alone. This adds a second and additional burden of proof,
requiring competent vocational rehabilitation testimony.
Recent Retaliatory
Discharge Developments
There have been recent changes in Illinois regarding the tort of retaliatory
discharge. In Siekierka v. United
Steel Deck, Inc., 373 Ill.
3rd 214 868 N.E.2d 374 (Third District), the Appellate Court
extended the tort of retaliatory discharge to include terminations arising out
of excessive absenteeism resulting in an employee’s violation of a legitimate
absenteeism policy.
Prior to this decision, it has always been legal in Illinois to terminate an
employee for excessive absenteeism even if those absences were a result to a
work related injury. “An employer may
terminate employee for excess of absenteeism, even if the absenteeism is caused
by a compensable injury.” (See: Hartlein v.
Illinois Power Company, 151 Ill. 2d 142,
176 Ill.
decision 22, 601 N.E.2d at 728)
In Siekierka the employer had prevailed at the trial
level by way of a motion for Summary Judgment.
On appeal, the employee argued that Summary Judgment was improper and
that there was a material question of fact that should be decided by a
jury. As such, in Siekierka the
primary issue before the Appellate Court was whether the employee had raised a material
question of fact on whether the termination was proper. According to the employer the absenteeism
policy was based upon a legitimate business purpose (attendance), but according
to the employee the termination was a pretext and was in fact connected to the
employee’s filing of a Workers’ Compensation claim.
In Siekierka, the court determined that the employer
had set in motion a process under the Workers’ Compensation Act that made it
impossible for Siekierka to return to work within the required time
frames set forth in the attendance policy.
In the Workers Compensation case, the employer had disputed the employee’s
treatment and request for surgery. That
delayed, forced the employee to remain off work making it impossible for him to
return to work within the requirements of the attendance policy. The court concluded that this denial had at
least raised a question of fact and that the case should be tried before a jury. According to the Court:
United Steel’s actions served to delay Siekierka’s
surgery at the same time he was left uninformed that the delay had the
potential to cause him his job. When Siekierka
was finally made aware of the possible consequence of his continued absence
from work, he was faced with the option of pursuing his Workers’ Compensation
right to have the surgery or attempting to return to work without out.
(See: Siekierka v. United Steel
Deck, Inc., 868 N.E.2d at 381)
According to the court, it was this kind of choice that was
prohibited under Illinois Law and therefore they sent the case back to the
trial court for trial.
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