Synopsis: IL WC Propaganda from the Friendly Folks at ITLA—Our Best Thoughts for the Legislature and our Business Readers.
Editor’s comment: Governor Rauner’s very first Illinois State Budget address to all of us is set for this Wednesday, Feb. 18, 2015. Lots of things may change in our state as the new Governor tries to make up the massive multi-billion gap between expected income and government spending. It is possible he will try to “sweep” the over-500 funds out there to try to make ends meet. We hope our WC administration doesn’t get “swept-away” in the budget overhaul.
While preparing for the budget fallout, we saw a recent Illinois Trial Lawyers Ass’n (or ITLA) “fact-sheet” about Illinois workers’ compensation being distributed around the halls of our State Capitol last week. We wanted to give our legislators and readers our best thoughts and comments—some of this stuff is poorly reasoned and some of the ITLA facts are accurate and spot-on.
1. First, they ask the longstanding and challenging question—Despite claims Illinois is not profitable for WC insurance, there are 330 insurance competing for and writing WC insurance in our state. If IL WC is so unprofitable, why are these insurance companies climbing over one another to sell insurance here?
We take issue with this entire concept that competition makes any product wildly cheaper and less profitable. We point out gold, silver and diamonds are sold by literally thousands of merchants in Illinois. The competition for these products is intense. Retailers of gold, silver and diamonds don’t and can’t sell them for less than their wholesale cost. They may come at customers with interesting deals or normal marketing spiels but they still have to cover their costs and make a reasonable profit. The same thing happens in workers’ comp insurance—they are all trying to make a buck regardless of profitability. And when anyone has time, who claims WC insurance isn’t at least marginally profitable?
2. The ITLA fact sheet again makes reference to the NCCI advisory rates and the fact NCCI had recommended a near 20 per cent reduction in premiums since 2011—this statement is inaccurate and misleading. NCCI published “advisory rate reductions” and not premium reductions. The ITLA fact sheet indicates the “advisory rate” reduction should result in a $1B savings in insurance premiums but insurance companies “refused” to reduce premiums in response to industry recommendations.
This section goes back to the silly and challenging problem of NCCI publishing WC insurance premium advisory rates that aren’t mandatory and don’t truly mean anything in the context of actual IL WC insurance premiums. To our knowledge, the IL WC advisory rates have always gone down—our research indicates these ethereal advisory rates have been “dropping” for well over a decade or more. Since you can’t actually buy WC insurance at the advisory rates, the whole concept is misleading.
3. The ITLA fact sheet touts the fact Illinois is well below average in the number of claims per 1,000 workers.
We assure our readers this is true and something our readers on both sides of the WC matrix should be aware of. Illinois is a safer state and has less work injuries, not because of anything ITLA has actively championed but because of you—risk managers and safety consultants and claims handlers have learned from mistakes. We truly have a safer business environment than many other states. We also feel the hyper-aggressive folks at OSHA in this state make it hard to allow anything unsafe to be present in the IL workplace. If someone gets seriously injured, the hammer of IL OSHA fines is soon to follow.
4. The fact sheet heralds the fact IL WC claims have dropped and continue to drop. In 2003, the number of litigated WC claims in this state was at 62,000; we are now at 42,500 for 2013.
Again, we assure our readers this is accurate and sometimes surprising. We feel some of this is due to bad job creation numbers. Please note the “shelf-life” of IL WC claims is about three years and the drop means there used to be almost 200,000 claims; now there should be less than 130,000 claims currently pending. The trend of fewer claims should continue as IL job creation continues to fall. If WC benefit levels continue to move into the mainstream, we hope more jobs will come to our state. Please remember the State of Texas “created” 400,000 new jobs last year while Illinois’ jobs growth for the whole year didn’t match one month of the jobs increase that happened in the Lone Star State. If we had 400,000 new jobs in Illinois, we might have lots more WC claims.
5. The ITLA position paper indicates NASI or the National Academy of Social Insurance indicates WC remains the second most profitable line of insurance after auto insurance.
Like the analysis of gold, silver and diamonds above, profit comes from the sale of goods. More profit comes to the sale of pricier goods. The NASI report has so many statistics, you could basically prove anything you want with it.
6. The ITLA paper indicates the Oregon WC Premium Rate study indicates Illinois had a 24% reduction in WC rates from 2012 to 2014. They assert this was the biggest drop in the U.S.
We have told our readers over and over, these statistics are accurate. Illinois was much too high and is now simply high—we rank number 7 in the U.S. for WC premiums. We hope our progress continues and the State of IL catches up to Wisconsin, Iowa and Michigan in the middle of the pack with fair and reasonable coverage and benefits. KCB&A doesn’t feel we need to be as penurious as Indiana in doling out pennies to injured workers like they were sewer covers.
7. Finally, comparing IL WC to IN WC, the ITLA fact sheet indicates
· Indiana pays it workers 27% less than Illinois and lower wages create lower WC costs. We consider this accurate.
· IL is 8th in the country for average weekly wages while IN is 35th. Again accurate.
· IN restricts the right of workers to pick their own doctors/hospitals while IL injured workers can still pick their own docs. Also accurate.
· The ITLA sheet complains about equal treatment for the same injuries in the never-ending debate about impairment vs. disability. Accurate and boring.
· Finally, the last beef is about the IN early return to work program or ERTW. We support early return to work in all states—we recommend IL WC consider such a program.
We hope the best for the hard work being provided by our new Governor as he issues his first budget and fights to make our State a better place. If you would like to review the ITLA fact sheet and compare our analysis, send a reply. We appreciate your thoughts and comments. Please post them on our award-winning blog.
Synopsis: When do you pay an icy/snowy IL WC fall-down claim?
Editor’s comment: The true answer is “no one knows.” We get so many questions about this topic, we wanted to give you some quick thoughts.
First, you have to fully investigate and lock in the facts. If you don’t, the facts may “change” and not in the way you might like. Pull security video/take statements/insure you know what happened.
Second, in theory, Illinois WC does not adhere to the concept of positional risk. Just because someone is at work when they fall, it doesn’t mean they are automatically entitled to benefits. They have to show some increased risk caused the fall. Sort of. Accident must have its origin in some risk connected with or incidental to the employment. The risk the injured worker faced must be greater than the degree of risk faced by the general public.
Does the fact a worker is in a parking lot owned by the employer automatically mean coverage for any injury will be present? The IL Workers' Compensation Act does not mention or define parking lots or “company parking lots.” The law governing compensability of parking lot injuries is based on common sense and reviewing court decisions. That said, injuries occurring on an employer’s premises are found to be compensable when the actions leading to the injury arise out of and are in the course of employment.
Homereding v Industrial Commission--Claimant was a nail technician in a salon located in a strip mall and there was a parking lot in front of and in rear of the salon. The parking areas were owned by the mall and her employer paid a share of the common area maintenance to maintain the adjoining parking lots This employer directly instructed the injured worker to park in the rear lot behind the salon. When Claimant fell on ice going to her car to obtain work supplies during the work day her injuries were ruled compensable.
In Wal-Mart Stores, Inc. v Industrial Commission, the Wal-Mart worker was walking in the store parking lot to her car which was being driven by a friend who was picking her up after work. Wal-Mart generally requested employees park in a designated area but this was not "required" or closely enforced. The general public parked anywhere in the lot, including the area where Wal-Mart requested employees to park. The claim was denied. The message to the larger Illinois business community was not to tell workers where to park or enforce employee-only parking rules.
In Caterpillar Tractor Co. v Industrial Commission which is the last statement by the IL Supreme Court in a fall-down claim, Claimant stepped off a curb onto a blacktop driveway in route to his car parked in the company parking lot. There was a slight cement slope for drainage between the curb and the blacktop driveway. As Claimant stepped off the curb his right foot half landed on cement and half on the blacktop driveway and he twisted his ankle. The cement incline was dry and there were no holes, obstructions or rocks. Claimant did not slip, trip or fall.
The IL Supreme Court denied compensation ruling there was no defect or hazard. Claimant did not trip, slip or fall and nothing had increased claimant's risk of harm. All members of the general public confront the same risks of traversing curbs.
Contrast the Caterpillar Tractor ruling with the IL Appellate Court ruling in Metropolitan Water Reclamation District v. IWCC claim where a woman was walking to the bank with a bank deposit and tripped on a driveway. The Appellate Court relied on a “risk of the street” analysis that, in our respectful view, directly contradicts the Supreme Court ruling in Caterpillar Tractor.
There are numerous factors that may lead to acceptance or denial of a fall-down claim. In the first instance, if the injuries are minor, there is no reason to fight like crazy over a small amount of money. If you face a serious claim with significant injuries and want the best possible path to dispute the claim, send a reply and the defense team at KCB&A will answer with research and our best thoughts on a 24/7/365 basis.
Synopsis: Can an IL WC Lawyer Send You a Check for $25 and Demand Unlimited Copies of Your File(s)?
Editor’s comment: This article touches on the Clayton v. Ingalls Hospital ruling. In that ruling, our reviewing court wrote what we consider to be a very confusing decision that is technically accurate but somewhat misleading, as we will indicate below. There is no true “discovery” in IL WC like in general liability claims. Most subpoenas you will receive are sent with misleading correspondence asking for you to cash the check and then make and send unlimited photocopies of medical or other records in your possession.
Nothing in the IL WC Act or Rules requires you to make photocopies at any cost. Please remember the IL WC Act was first passed in 1909. At that time, “photocopying” was unheard of and hadn’t been invented. The Act and Rules haven’t been updated to resolve this “new” technology. If you think the law or the rules should be changed, send a letter to the IL WC Advisory Board.
The $25 check is a “witness fee” plus a small amount for mileage to defray the expense of getting to the hearing. If you cash the check, you are then supposed to bring the original records you have to a hearing before the Arbitrator. The Arbitrator could review the original records and you could then take them back to your office. You don’t need to allow them out of your possession to be copied—they are your property and your only duty as a witness responding to a subpoena is to bring them to the hearing, show them to the hearing officer and then take them back.
Petitioner attorneys don’t want you to bring original records to a hearing so they say you don’t have to bring the records if you will just make thousands of free copies at no further expense to them other than the witness fee of $25. We consider that mildly misleading.
There is a provision for copying of medical records on the IL State Comptroller’s website. Take a look: http://www.ioc.state.il.us/index.cfm/resources/general-resources/copy-fees/
If you get a subpoena and a check for $25, what we suggest you do in the future is to have a clerk price the copying of records under the schedule above and send the pricing to the attorney seeking the records.
If they pay the amount you seek or settle with you for a middle-ground amount that you are willing to accept, copy and send the records. If they won’t pay anything other than $25, tell them you won’t provide the records. If they get mad at you or threaten you, contact Gene Keefe at 312 756 1800 or send a reply.
Synopsis: Illinois WC Rates Jump Again UPDATED AGAIN FOR PPD and Your PPD Reserves May Be Wrong(!) and Need Retroactive Updating. Send a Reply to Get a Free Copy of Shawn R. Biery’s Updated IL WC Rate-Sheet!
Editor’s comment: There continues to be an upward spiral of IL WC rates. Starting in the 1980’s, the IL WC Act provides a formula which effectively insures no matter how poor the IL economy is doing, our WC rates keep climbing.
We caution our readers to pay attention to the fact the IL WC statutory maximum PPD rate is now $735.37. When it was published, this rate changed retroactively from July 1, 2014 to present. If you reserved a claim based on the prior rate for the period from July 1 to right now, your reserves are wrong. If you have a claim with a date of loss after July 2014 and a max PPD rate, you need to take a look and see if the new maximum PPD rate applies. If this isn’t clear, send a reply to Shawn at firstname.lastname@example.org.
The current TTD weekly maximum has risen to $1,361.79. A worker has to make over $2,042.69 per week or $106,219.62 per year to hit the new IL WC maximum TTD rate. Do such folks truly need full TTD value? Does any state in the United States have a TTD maximum that high?
The new IL WC minimum death benefit is 25 years of compensation or $510.67 per week x 52 weeks in a year x 25 years or $663,871.00! The new maximum IL WC death benefit is $1,361.79 times 52 weeks times 25 years or a lofty $1,770,327.00 plus burial benefits of $8K. On top of this massive benefit, Illinois employers/governments have to pay COLA increases.
The best way to make sense of all of this is to get Shawn Biery’s colorful, updated and easy-to-understand IL WC Rate Sheet. If you want it, simply reply to Shawn at email@example.com and he will get a copy routed to you before they raise the rates again!
Synopsis: Engage Directly with Experts in the Workers' Comp Arena at this Year's Illinois Workers' Comp Forum.
Editor’s comment: Do you administer workers’ compensation claims? Are you involved in strategic planning? Concerned with medical costs and utilization? Looking for a better understanding of workers' compensation?
Then you won't want to miss the Illinois Workers' Comp Forum, now in its 5th year. Moved to downtown Chicago at Loyola's Quinlan School of Business on May 4-5, 2015, the event provides attendees the opportunity to hear perspectives from and engage directly with experts in the workers' comp arena including:
- Joan Vincenz, Managing Director – Workers’ Compensation and Managed Care, United Airlines
- Larry Krause, Risk Manager and All-Around Good Guy, Champaign County, IL
- Gene Keefe, Esq., Partner, Keefe, Campbell, Biery & Associates, LLC
- Don Phillips, Safety Coordinator, City of Naperville
- Devin Stoll, Human Resources Manager, Cintas Corporation