Synopsis: Governor Rauner’s State of the State Speech—What It Means for the IL Workers’ Compensation System, by Timothy J. O’Gorman, J.D.

Editor’s comment: Governor Bruce Rauner delivered his much anticipated State of the State speech this past Wednesday, February 4, 2015. Governor Rauner addressed several issues including proposed workers’ comp reform which clearly is an early focus of his new administration. The Governor did not discuss WC issues with much specificity. However he did address the problems of businesses in Illinois paying large workers’ compensation premiums in comparison to our neighbors in Indiana. The Governor discussed Modern Drop Forge as an example, which has manufacturing operations in both states. Governor Rauner indicated the manufacturer’s Illinois costs are $750,000-$1,500,000 compared to a $250,000 premium in Indiana. We point out the defense team at KCB&A has saved major national employers millions in IL WC costs. We don’t know who is currently handling Modern Drop Forge’s IL WC claims/defense but we are happy to help them dramatically cut their IL WC costs, if asked.

Can Indiana WC Benefits Be Too Low?

Our problem in comparing Illinois WC to Indiana is the comparison is too easy—Indiana WC is much lower than any of the United States other than North Dakota. We also point out Indiana’s average annual cost-of-living expense is also lower than IL. Per the 2014 Oregon WC Premium Rate Rankings, of our other sister states, Missouri is at 21, Wisconsin is at 23, Iowa is at 24 and Michigan is 34. All of them are wildly high when compared to Indiana WC benefits. We feel Illinois WC is trending in the right direction and with the recent reforms, we will be well within the range of the above middle-ground states for the 2016 Oregon study. We don’t know if Illinois workers, union or non-union, will readily accept the penurious benefits provided to injured workers in Indiana. Please note a catastrophically injured worker in Indiana who all doctors agree can never work again only gets 10 short years of benefits and then is left to fend for themselves, their spouses and children.

Please Fix Your Own State WC House, Governor!

What was missing from the State of the State speech was any indication by the Governor or his new administration to take a hard look at future management of WC claims by Illinois State Gov’t workers. The State itself is one of its biggest employers and is supposedly paying out a whopping $125M a year in workers’ comp benefits to its employees—that is clearly part of our overall interstate ranking. We feel constant overpayment of WC benefits to state workers demonstrates longstanding mismanagement that was chronicled by Illinois Attorney General Lisa Madigan three years ago. Very little has changed in the State of IL WC defense program. The new Governor didn’t cause the problem but he can fix it. We strongly encourage Gov. Rauner to attack this issue. We are sure he can save IL taxpayers millions by doing so. As we indicate above, we are happy to assist, if asked.

Let the Current IWCC Do Its Magic

KCB&A has long described the problems associated with decades of high workers’ compensation premiums in Illinois and the problems it causes for our State’s businesses and government bodies. We have been, and continue to be, excited about the steps already taken by the much-more-professional Illinois Workers’ Compensation Commission since the 2011 changes to the IL WC Act which have empirically caused workers’ compensation premiums in Illinois to drop. We are hopeful the changes already made will mean further savings for Illinois self-insured employers and insurers. We are hopeful those savings will pass on to businesses and government bodies through continued reductions in workers’ compensation premiums.

Our defense team has recently noticed a clear shift in results from hearings and oral argument at the IL Workers’ Compensation Commission. Under current Acting Chair Ronald Rascia, the Commission and its Arbitrators have issued decisions that, as a whole, tend to be more employer-friendly than in previous years. If you want examples, send a reply. We also point out the number of claims has dropped dramatically—in 2014, there were only about 45,000 new claims filed. As we outline above, the trend for IL WC is to the middle.

Three Main WC Legislative Goals for Gov. Rauner

Although the Governor did not discuss specific issues regarding proposed workers’ compensation reforms, we feel a number of the following issues are on the Governor’s political agenda in the coming years. It appears to be his hope to implement further workers’ compensation reform legislation that:

1. Updates how injuries are apportioned to ensure employers pay for injuries that occur at their workplace;

2. Clarifies the definition of “traveling employees” to ensure a reasonable legal standard that excludes risks a traveling employee encounters that match the risks faced by the general public; and

3. Implements mandatory American Medical Association (AMA) guidelines when determining impairment.

We point out lots of legislative reforms have been attempted by some legislative zealots with little traction. Please see the article from Arik Hetue below that chronicles these failures. We further feel Gov. Rauner could get much better results if he would reach out to KCB&A and other members of the IL WC defense community who could provide guidance on how to make IL WC benefits and administration more reasonable and middle-of-the-road.

Which Impairment Rating Will Apply? Are We Going to Get Into The “Battle of Ratings?”

Of particular interest to KCB&A is the possibility of mandatory implementation of permanent partial disability (PPD) awards which are based entirely on AMA impairment ratings. We have heard discussion from a number of parties that PPD values should be based solely on “the reported level of impairment.” We note the terms “disability” and “impairment” are sometimes used interchangeably however medically, they are very different. According to the AMA Guides, the only impairments to be rated are permanent impairments. A permanent impairment is defined as one that has reached maximum medical improvement (MMI) and is well stabilized and unlikely to change substantially in the next year with or without medical treatment. The AMA Guides define disability as "activity limitations and/or participation restrictions in an individual with a health condition, disorder, or disease.” We note by the AMA’s own definition, the term “impairment” only describes a portion of a person’s whole condition after suffering from a health condition, disorder or disease and may not accurately encompass the full extent of an employee’s condition after a work injury.

On a more practical level, we note adhering strictly to AMA impairment ratings may not create a system that leads to reduced WC costs for Illinois employers. Routinely we have seen Petitioner’s treating physicians generate impairment ratings which may far exceed any traditional disability determination made by an Arbitrator after considering all five factors in the IL WC Act. If the Act were changed to only allow Arbitrators to consider impairment ratings in finding the nature and extent of an injury, such a change might lead to a scenario where an Arbitrator can only choose between a Respondent-obtained impairment rating and a treating physician or Petitioner-obtained impairment rating. Forcing an Arbitrator or panel of Commissioners to choose between one of two extremes may not lead to the cost cutting results a change would be intended to bring about. Considering the conservative approach to determinations of all issues the current IL WC Commission administration appears to be implementing, we at KCB&A do not feel handcuffing our fact-finders to one of two possible ends of a spectrum would be fruitful.

The next major event which may affect the IL WC system is the release of the Governor’s proposed IL State Budget on February 18, 2015. We will keep our readers posted on news we feel you need to know. Tim O’Gorman, J.D. researched and wrote this article. You can reach Tim on a 24/7/365 basis with questions at togorman@keefe-law.com.

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Synopsis: What We May Learn About IL WC reform Efforts Going Forward by Reviewing Bills that Floundered in Recent IL Legislative Sessions, by Arik D. Hetue, J.D.

Editor’s comment: Every year, new bills are submitted to our IL Legislature. Most of these bills are debated somewhat, but stagnate. Let’s take a look at the IL WC reform bills recently submitted, and see if they tell us anything about changes to come.

The last IL legislative term was the 98th General Assembly, which lasted through 2013-2014. During that time many bills were proposed for WC reform. When the congressional session ends at the new year, any bills that were left pending without a vote essentially die, as the new congress comes in. The term of art for this is “Session Sine Die” which means the congress adjourned without assigning a day for a further meeting or hearing on those bills. Since the new legislature comes in, this effectively kills the bill. Not to worry – bills are re-introduced routinely by members who remain after winning a new term, and Governor Rauner has certainly made a lot of noise about WC reform, as Tim O’Gorman outlines above.

Looking back on the WC bills that faded away last session (there were 17 of them) we can see some were more comprehensive than others. They can be viewed online at http://www.billtrack50.com/PublicStakeholder/f3rqaAOfUUiAmU3fyWElLg. Below we have summarized their objectives and noted how many bills supported each proposition, in order of which objectives had the most support.

· Primary Causation/”Major Contributing Cause” – 7

· Providing credit for MAW injuries and capping PPD loss for cumulative awards at 500 weeks – 6

· Converting Shoulder to the Arm/Hip to the Leg – 6

· Reigning in the “Traveling employee” concept to still require an injury arise out of work – 5

· Eliminating TTD/TPD when workers discharged for cause with work available (doing away with Interstate Scaffolding) – 4

· Address AWW calculation for part time work or dual employment, eliminating “parts of a week” theory – 3

· Cutting full duty release CTS cases to Impairment Rating awards – 1

· Tightening up notice in repetitive trauma cases – 1

· Expanding the intoxication defense – 1

This gives us a clear picture of what may be sought in a compromise process, presuming the Governor chooses not to push for a complete overhaul of the system. We note the changes put in place in 2006 and 2011 are having an impact, and we suggest some of the changes above would bring us up in relation to some of our sister states – we are happy to see broad-based support for doing away with what we feel is the unusual ruling in Interstate Scaffolding – there is no reason an employee terminated for reasonable cause should be entitled to ongoing TTD/TPD when they could have been working but for their own actions. Another solid and easily supported proposition is the adding back in of statutory credits for shoulders and moving those to the arm as they were for roughly 100 years before the Appellate Court decided to alter century-old precedent to eliminate credits for a shoulder surgery. The third objective which had a lot of bills supporting it was to clarify the “traveling employee” doctrine.

What can we take from this? The vast majority of the bills deal with issues which only arose after an activist Appellate Court significantly expanded and/or confused issues in our WC system. Interstate Scaffolding’s holdings lead to situations which are not logical. The travelling employee doctrine was widely expanded, although thankfully the IL Supreme Court has weighed in on at least one instance of this type of expansion. The elimination of statutory credits on the shoulder by converting them to MAW awards is just an abnormal occurrence with no basis in precedent.

It is the job of the legislature to make laws, and the job of the courts to interpret them. When the courts use that interpretation to expand laws beyond the legislative intent for those laws, it falls back to the legislature to amend those laws to state more clearly what the intention was. Kudos to the hard working legislators who are still working diligently behind the scenes to craft reasonable WC reform. We hope they get the ear of the Governor, and can move forward with some of these easy to argue issues.

This article was researched and written by Arik D. Hetue, J. D. who can be reached at ahetue@keefe-law.com. Feel free to email him with any comments or concerns, or post them to our award winning blog!

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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 sbiery@keefe-law.com.

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 sbiery@keefe-law.com and he will get a copy routed to you before they raise the rates again!

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Synopsis: Dr. Michael Vender and the great specialists at Hand to Shoulder Associates Now Have Office Hours in Belvidere, IL.

Editor’s comment: Dr. Vender is one of the top hand surgeons in the United States and has a great team of docs working with him. They have announced they are bringing their practice to Belvidere to provide solid care for workers in that area. Hand to Shoulder Associates began in the early 1970?s as a single physician hand surgery practice located in the growing industrial area of Elk Grove Village, Illinois. Over the last 40 years, they have grown to become a renowned center of excellence, recognized across the Midwest U.S. for specialization in injuries and problems of the shoulder, elbow, wrist and hand. The first replantations of upper extremity amputations in the greater Chicago-area were performed by one of the co-founders of HSA in the 1970s.

With their main office still located in the northwest suburbs of Chicago, HSA is the largest non-university single specialty hand group and one of the largest in the Midwest. They have six board certified or board eligible orthopedic surgeons, each having additional training in the upper extremity and microvascular surgery. They operate numerous office locations throughout the Chicago area.

Their main number is 847 956-0099. Their website is http://www.handtoshoulders.com/

KCBA Blog

2-9-2015; Gov. Rauner's State of the State Address for WC; Arik Hetue Reviews Recent WC Legislation; Shawn Biery's IL WC Rates Updated Again and more