September 2026; Please join John Campbell of KCBA and Brian DeBias of ExamWorks for a webinar on HB 5228; Odd IL WC Appellate Ruling About Counting to 2 and more

Synopsis: Please join John Campbell with Keefe, Campbell, Biery & Associates and Brian DeBias with ExamWorks  on Wednesday, September 16th for an online educational webinar on Illinois House 5228.

Editor’s comment:  They will review Key Changes & Practical Impact. What every WC Claims Manager and Risk Manager Needs to Know about this unprecedented change to IL WC law and practice.  

Space is filling fast--Click here to REGISTER

Update On Illinois House Bill 5228

Synopsis: Odd Ruling from IL Appellate Workers’ Comp Panel about Section 8(a-3). We feel Illinois WC has to be one of the few States where our hearing offices are challenged to count to 2…!

Editor’s comment: In Heartland Coca-Cola Bottling Co. v. IWCC, the Appellate Panel issued a Rule 23 order, so it is nonprecedential except in the limited circumstances. If you have questions about that issue, send a reply.

Claimant Brian McClanahan was a delivery driver for Heartland Coca-Cola. On June 15, 2022, while pulling back a heavy two-wheeler/dolly, he claimed he felt sharp pain in his biceps together with numbness and tingling extending through his arm and fingers. The eventual dispute involved his cervical condition, medical bills, prospective cervical treatment and whether he had exceeded the two-choice-of-physicians limitation under §8(a-3) of the Illinois Workers’ Compensation Act. 

McClanahan’s treatment course involved a number of doctors, which gave Heartland an argument--viewed simply by counting physicians, it appeared Claimant had gone beyond the statutory limit of two docs.

But, as we sometimes do in this nutty State, the IWCC and later the IL WC Appellate Court rejected that extraordinarily simple approach—only in IL WC do we have issues about counting to two!!! The Court felt the question under §8(a-3) was who actually selected the physician and whether subsequent treatment arose from a referral within an existing chain of treatment.

The IL WC Commission found that:

• Dr. Young was Claimant’s first choice of doctor. Dr. Young’s referral to Dr. Davis, who was in the same practice, remained part of that first choice.

• Dr. Rotman treated Claimant but magically did not count as McClanahan’s second choice because Heartland had previously selected Rotman for an IME. I cannot disagree more strongly with this concept—the fact the IL employer “chose” an IME doc didn’t mean later treatment by that doctor and possibly everyone in his medical office was a “choice” by the employer and not the Claimant.

• Per the IWCC panel, Claimant’s second actual “choice” was a Dr. Bradley and the decision by Claimant to seek medical care by the IME doc was part of what I feel is IL WC voodoo reasoning.

• Dr. Bradley then referred Claimant to Dr. Gornet. To my understanding, Dr. Gornet is a proponent of cervical disc replacement surgery, which may cost between $15,000-$175,000.

• I would doubt a delivery driver would undergo such surgery and not have lots of restrictions, requiring retraining and possibly major wage loss exposure for the employer or insurance carrier.

• Per the IWCC and the Appellate panel three choices can with Illinois WC wizardry become two so Dr. Gornet fell within the referral chain generated by McClanahan’s second now permissible choice rather than constituting a third choice. 

The result was that McClanahan had not exhausted or exceeded his two choices, despite having actually seen more than two doctors.

Why this matters for IL WC Defense Handling

The ruling is favorable to claimants. From this ruling, it appears the IWCC and courts may allow three, four, or more physicians by their unique reasoning. Employer-selected doctors don’t count when Claimant later “chooses” them, and referrals flowing from a permissible choice generally remain within that choice’s treatment chain.

We appreciate your thoughts and comments. Please post them on our award-winning blog.

July 2026; IL Appellate Court Clarifies Calculation of Litigation Costs in WC Lien Recovery; IL and Chicago Minimum Wage Increases Change Reserves on Wage Diff Claims and more

Synopsis: Strong IL Appellate Court Ruling Outlining Appropriate Analysis of Recovery for IL WC Lien Claimants.

Editor’s comment: This is a strong and unanimous statement by this Appellate Court relating to IL WC lien recovery. It is a must-read for anyone handling such matters. From what I can tell, it appears to be an appellate-level fight over approximately $5,000!!

In Larsen v. Vaid, a police officer was injured in a 2017 on-duty automobile accident and received workers' compensation benefits totaling $399,930.16 from IRMA, the Intergovernmental Risk Management Association, her employer's workers' compensation administrator. Claimant Vaid later settled her civil action against the at-fault auto driver for $325,000.

IRMA intervened and politely refused to reduce their IL WC lien. After dismissal of the civil action, the trial court ordered IRMA to pay 100% of plaintiff's litigation costs or $21,344.88 plus the statutory 25% attorney fees equaling $81,250, leaving IRMA a net recovery of $222,405.12. IRMA appealed, arguing it should pay only 75% of costs because its mandatory 25% attorney fee obligation should first be netted out from the gross reimbursement before calculating its pro rata cost share.

The First District affirmed, applying de novo review to the question of statutory interpretation under section 5(b) of the Workers' Compensation Act. The court held the employer's obligation to pay a pro rata share of costs and its obligation to pay 25% attorney fees are two separate but independent obligations joined by the conjunctive 'and,' each operating independently. The phrase 'any reimbursement received by the employer' means the total reimbursement for compensation paid, without first subtracting attorney fees. The court relied heavily on the Illinois Supreme Court's analysis in Zuber v. Illinois Power Co. and declined to follow the Second District's contrary holding in Overlin v. Windmere Cove Partners, Inc., finding Overlin was non-binding and not supported by the IL WC Act’s plain language.

This ruling is critical for IL workers' compensation carriers and self-insured employers intervening in third-party tort actions. In short, when an IL employer recovers 100% of the third party settlement as reimbursement, it bears 100% of Plaintiff's litigation costs, regardless of its concurrent attorney fee obligation.

Things to note:

1. Illinois is a pro-plaintiff attorney State. IL Plaintiff attorneys don’t like to have to accept a 25% attorney fee and any reduction in their litigation costs. Someday soon that may be changed by our “Forever-Blue” Legislature and Governor.

2. Under section 5(b) of the Workers' Compensation Act, the phrase 'any reimbursement received by the employer' means the total reimbursement for compensation paid or to be paid, without subtracting the mandatory 25% attorney fee obligation before calculating the employer's pro rata share of litigation costs and expenses.

3. An employer's obligation to pay a pro rata share of litigation costs and its obligation to pay 25% attorney fees are two separate, independent obligations under section 5(b); the attorney fee obligation does not reduce the base amount used to calculate the cost-sharing obligation.

4. The use of 'gross amount' in the attorney fee clause of section 5(b) clarifies that the 25% fee must be calculated on total reimbursement before deducting litigation costs — it does not signal that costs must be calculated after first subtracting attorney fees.

5. The Second District's holding in Overlin v. Windmere Cove Partners, Inc., 325 Ill. App. 3d 75 (2001), which calculated costs based on net reimbursement after subtracting attorney fees, is neither binding on the First District nor supported by the plain language of section 5(b) of the IL WC Act or the Illinois Supreme Court's analysis in Zuber v. Illinois Power Co.

Under section 5(b) of the IL WC Act, an employer's pro rata cost share is based on gross reimbursement, not net after attorney fees are deducted. This Court rejects the argument that 'gross' modifier in attorney fee clause implicitly reduces the cost calculation base.

We appreciate your thoughts and comments. Please post them on our award-winning blog.

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Synopsis: IL and Chicago Statutory Minimum Wage(s) Continues their Inexorable Rise, Changing Reserves on Wage Loss Diff Claims

Editor’s comment: Please note the rising IL and Chicago minimum wage increase on July 1, 2026 dramatically changes the math on IL WC wage loss differential claims. The rising Illinois minimum wage can have a significant but nuanced effect on workers' compensation wage differential benefits under Section 8(d)(1) of the Illinois Workers' Compensation Act, particularly in light of recent appellate decisions such as Larsen v. Illinois Workers' Compensation Commission and Vaid v. Illinois Workers' Compensation Commission.

The basic IL WC wage differential formula

An employee who cannot return to their usual occupation because of a work injury may receive:

• 66⅔% of the difference between:

• What the worker would be earning in the pre-injury occupation; and

• What the worker is earning—or is capable of earning—in suitable post-injury employment.

How increasing minimum wage changes the calculation

When Illinois raises the statutory minimum wage the wages available in many entry-level or restricted-duty jobs also rise. Therefore, the injured worker's post-injury earning capacity may increase, even if the worker has not actually received a raise.

For example:

• Pre-injury earning capacity: $1,500/week

• Current suitable employment at $15/hour: $600/week

• Wage differential:

• Difference = $900

• Wage Diff Benefit @ 2/3 = $600/week

• If the minimum wage rises and the same job now pays $17/hour:

• Suitable earnings become approximately $680/week

• Difference = $820

• Wage differential at 2/3 = about $547/week

The increase in post-injury wages reduces the wage differential benefit.

Can the IL employer or its carrier automatically reduce benefits because minimum wage increased?

Not automatically. An insured or self-insured IL employer using a CRC—certified rehabilitation counselor--generally must show evidence that:

• Suitable jobs actually exist;

• Those jobs pay the higher wage being claimed; and

• The injured worker is capable of performing them within permanent restrictions.

Simply pointing to a higher statutory minimum wage is usually insufficient by itself. Vocational testimony, labor market surveys, and evidence of actual available jobs are commonly used to establish earning capacity. Illinois courts consistently focus on the worker's realistic earning capacity, not hypothetical possibilities.

Practical implications

The effect varies depending on the worker's circumstances:

Low-wage workers: Most affected. A rising minimum wage can substantially reduce wage differential benefits because many suitable jobs are minimum-wage or near-minimum-wage positions.

Higher-wage workers: Usually less affected. If the worker earned $35–50 per hour before the injury, a $1 increase in the minimum wage has only a modest effect on the overall wage differential.

Workers already employed after the injury: If the worker actually receives wage increases due to minimum wage laws, those higher earnings generally reduce the ongoing wage differential because the benefit is based on the difference between pre-injury earning capacity and current earnings or earning capacity.

An unresolved legal issue

One of the emerging questions in Illinois workers' compensation law is whether statutory minimum wage increases alone justify modifying an existing wage differential award when the worker's physical condition has not changed.

Arguments include:

Employers: The worker's earning capacity has objectively increased because the labor market now pays more.

Employees: The increase reflects inflation and legislative policy, not an improvement in vocational capacity or physical ability.

Illinois appellate courts have not yet issued a definitive opinion holding that every statutory minimum wage increase automatically changes an existing wage differential award. Instead, the focus remains on the worker's actual earning capacity in suitable employment supported by the evidence.

Chicago Minimum Wage – Effective July 1, 2025

The City of Chicago adjusts its minimum wage every July 1, based on the Consumer Price Index or a 2.5% cap, per ordinance.

Starting on July 1, 2025, the new minimum wage rates in Chicago will be:

• $16.60/hour for employers with 4 or more employees

• The minimum wage in Chicago calculates to 40 hours times $16.60 or $664 a week.

• $12.62/hour for tipped employees

A worker who has Chicago “within a reasonably stable labor market” around their home should be able to make that much at even sedentary/light and other jobs.

I would suggest that applies to any worker that lives within 50 miles of Chicago because lots of folks travel that far to get to work.

This new math started on July 1, 2025.

If your WC Defense attorney doesn’t know how this works or what your accurate reserves should be, in light of the new minimum wage, send a reply to consider better defense counsel.

If you aren’t sure how this works, please call me to discuss.

Be sure your teams and clients are prepared for these changes and compliant with the updated rates.

Illinois Statewide Minimum Wage

As a reminder, the statewide minimum wage increased to $15.00/hour on January 1, 2025. This rate applies across Illinois, outside of municipalities like Chicago that set their own higher thresholds.

In short, every worker in IL with any full-time job should be making $15.00 per hour at minimum.

We appreciate your thoughts and comments. Please post them on our award-winning blog.

June 2026; New Legislative Changes to IL WC Act Arrive; New Odd Strategy Claimant Attorneys May be Trying to Rein in IME sites and more

Synopsis: Legislative Alert!!!Illinois Lawmakers Fiddle with the IL Workers’ Compensation Act. IL WC Medical Defenses Now More Perilous for Illinois Employers. Thoughts and Research by John P. Campbell and Eugene F. Keefe

The Illinois General Assembly recently passed House Bill 5228, introducing significant changes to the Illinois Workers’ Compensation Act. These revisions will greatly impact how employers, claims professionals, and attorneys on both sides manage and defend claims in this state, as explained below. This will not become law unless and until the Governor signs it—he has 60 days to do so.

Editor’s Comment: Every five or six years we see some tinkering to our IL Workers’ Compensation Statute. While this round of changes are few, perhaps the most significant change this time involves the Section 12 Examination process, often called the independent medical exam (IME).

Please note there may now be three distinctly different IME’s in the IL WC matrix:

• IME’s that deal with reasonableness and necessity of provided or proposed care:

• IME’s that deal with solely with causation;

• IME’s that deal with disability ratings/return to work issues when MMI has been reached.

Under the revised statute, with regard to IME’s that relate, in whole or in part, to reasonableness and necessity of medical care, IL employers and insurance representative are effectively “on the clock”. An IME must be completed and report tendered to Petitioner and/or their representative and the treater within a 90-day timeframe. Of note, statutory language specifically indicates that the report“shall be provided by the medical practitioner to the employee or employee’s representatives and the employee's treating healthcare professionals within 90 days.” This appears to compel the IME physician to tender the report directly to Petitioner. Moreover, the 90-day period begins when the employer receives the medical records from the treating healthcare professional requesting the medical service. As such, Respondents are afforded time to gather the relevant records needed to perfect the exam.

Nevertheless, this new 90-day window creates a time crunch for the employer or claim representative to obtain an IME. Respondents must also carefully track the date medical records were received and be mindful of the need to turn around an IME report in 90 days. Finding board-certified IME physicians who acknowledge and comply with this tight turnaround time may prove an additional challenge. 

It is also worth noting that according to the revised statute addressing Utilization Review, “A report made under Section 12 is not a valid utilization review and shall not be used to determine the appropriateness, medical necessity, reasonableness, or quality of treatment.” This is an important change, as the statute previously outlined an IME under Section 12 as one form of utilization review. That appears to no longer be the case. We also feel this legislative language is confusing for the average claims handler or risk manager. Send a reply if you have questions.

Moreover, as we indicate above, IME physicians must now be board-certified in the same specialty as the treating healthcare professional requesting approval for recommended medical care. If the employer fails to comply with these new rules after receiving medical records from the treating healthcare professional, or blows the 90-day deadline for production of the IME report, there is a rebuttable presumption that the employer shall be responsible for the payment of additional compensation under the Section 16 and 19 penalty provisions under The Act. That said, as you may know penalties and fees are calculated on benefits that aren’t being paid—if you and your company/TPA are up to date on benefits, the Section of the new legislation is nonsensical. However, in cases where a surgery has been performed on a disputed basis, and the charge is outstanding, this 90 day window applies to perfect an IME to maintain denial of the procedure performed. 

Please also note, this 90-day turn-around appears to apply only to an IME that addresses reasonableness and necessity of care (past or proposed care). Therefore, if an IME is ordered at the end of a claim to address, say, return to work function and/or an impairment rating, this 90 day deadline is not applicable pursuant our reading of the plain language of the statute.

The more difficult question is whether an IME challenging causation is beholden to the 90-day reporting deadline. For example, if the IME determines a medical condition is unrelated to the work injury, the treatment may be denied by Respondent in reliance of the IME, but not due to the “reasonableness and necessity” of the proposed procedure. The denial has nothing to do with whether treatment is needed. In such a case, it is unclear whether the new statutory provision would require the same 90 day turn around.

Who is going to pay for this new legislative requirement?

As the IME report in a “reasonableness and necessity” opinion is going out from the IME doc in four different directions—do all four parties split the cost? We are certain this is a new issue that isn’t addressed at all in the new proposed law.

We are confident the rebuttal to shared IME cost(s) from the Claimant bar will simply assert that the party who ordered the exam must pay for the exam/report and copying/transmission/FedEx, just as before this new law. On the other side of that argument is the fact the employer/insurance carrier/TPA ordered the IME document, owned it and only had to disclose in limited circumstances.

Traditionally, the IME doctor has a reasonable and healthy fee for the exam and report combined. It has traditionally been one fee. The doctor may not turn it over to any party before he or she is paid, but we feel the secret parties-that-be-who run the IWCC feel Petitioner is not going to pay anything for the IME report, just as before. I believe they feel doctors will copy and send four reports and only charge Respondent for the newly required handling/copying/mailing.

As John Campbell reads the statute, it is simply adding a deadline to complete the IME process and tender four reports—three of which will be sent for “free.” If Respondent fails to pay for the IME, John is sure the doctor will not turn it over, even if the 90 days expires.

There is no penalty to the doctor, but Respondent may bear the ramifications if the doctor fee is not paid and a report is not tendered. Therefore, I think our more sound advice is for the Respondents to be sure the IME fee is paid timely so the report is not delayed.

UR Re-Done in IL WC

In addition, there are similar changes to Section 8.7 of the Act regarding utilization review. Just as required by an IME physician, a utilization review medical provider must have a current certification by a recognized American specialty board in the area appropriate to the subject of review. Further, any certification or non-certification shall be valid for 3 months after the date which the employee and healthcare provider receives certification.

Section 8.7 now specifically excludes a Section 12 IME exams as a form of Utilization Review and further asserts that “Any other denial or refusal of the necessity of medical services except by utilization review constitutes unreasonable and frivolous delay” This language appears contradictory to the provision in Section 12, where IME’s are often employed to specifically address the reasonableness and necessity of medical services. 

We do feel UR providers will quickly catch up to these new challenges.

Summary

Absent an effective date, we should assume these changes will be in effect upon signature by the Governor. We further expect these changes will apply to both pending and future claims where an IME has not yet been perfected. Therefore, our best advice is to implement a new protocol for IME’s ASAP to meet this 90 day requirement.  Any current claim where an IME is being contemplated, Respondents should presume the 90-day clock has begun to run on the need to produce an IME report, once you have all relevant treatment records necessary for the exam.

Finally, for our readers in the trenches of day-to-day claim handling, it is important to also note the new bill increases the burial expense on death claims from $8,000 to $10,000.

We appreciate your thoughts and comments, please post them on our award-winning blog.

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Synopsis: New and Irritating IME trend that may be coming to an IL WC claim you are managing.

Editor’s comment: We have recently seen notes from a treating doctor that summarily finds a Claimant cannot travel 

• Short distances or

• Any distance

Due to injury. It appears clear this physician is probably being coached to write this note. In using this path, the treating doctor is blocking access to doctors/surgeons and specialists outside of the immediate area where Claimant resides.

We are letting the IL WC defense industry know this laughable idea is probably coming at you soon. Our suggestion is to make clear there is no part of the IL WC Act or Rules that provides a “limit” on how far an injured claimant has to travel for medical care or an IME.

Two other thoughts in response:

• Have the IME doctor go to Claimant’s home (we said it was a thought!!) or

• Do a remote IME in the appropriate case with Arbitrator approval. 

We appreciate your thoughts and comments, please post them on our award-winning blog.