11-26-13; IWCC Gets 3 New Arbs + One New Commissioner; Drug Sampling/Testing Redux; Best Practices Invite and much more

Synopsis: Three New IL Arbitrators Secretly Selected, Mike Brennan Gets Nod As New IL WC Commissioner; Governor Claims WC Reforms are Working Despite “Traveling Employee” Nuclear Warhead Waiting to Go Off on IL Business This Fall/Winter.

Editor’s comment: Last week, Governor Quinn announced the appointment of three new arbitrators who will join the 27 sitting IL WC Arbitrators, bringing the total to 30.

What Rhymes With Bloated Bureaucracy?

As observers for IL Business and with respect to these new workers, we don’t feel our state needs that many line administrators and would have preferred the monies had been saved and/or rebated to our clients and readers. As the IWCC is the only state agency funded solely by IL Business one would think the Illinois State Chamber, the Illinois Manufacturers or Illinois Self-Insurers Ass’n would be kicking and screaming about their members’ rising WC assessments. Is KCB&A the only statewide organization that cares about such issues?

We note the number of new IL WC claims continue to dramatically drop as IL workplaces get safer. Less than 50,000 new claims should be filed this year and many of them are pro se settlements. Companies large and small continue to react to the looming presence of federal OSHA that is hitting employer after employer with hefty fines for any unsafe situation or severe injury. With 30 Arbitrators and 8 Commissioners and our Chairman, the total IWCC payroll for administrators has to be one of the highest in the U.S. Along with a high current payroll, Illinois has the great habit of making taxpayers pay the lion’s share, currently 60% of post-employment pay for retired government workers that we misleadingly call “pensions” in this state.

How Does Hiring More Administrators Equate with Efficiency?

As the 2014 Gubernatorial Election is looming, our plucky Governor couldn’t miss the chance to call the 2011 IL WC reforms as “historic” and they assert this legislation “overhaul[ed] the system in Illinois.” The press release further highlights the “Governor's commitment to making Illinois government more efficient, accountable and effective.” We counter to point out adding more IWCC payroll doesn’t equate with efficient, accountable or effective—it is just more government workers.

One galling aspect of Illinois government is the continuing decision by even a “reform” Governor to keep Arbitrator positions purely political and secret. The IWCC didn't openly advertise these new Arbitrator or Commissioner positions. You and I can’t apply for such positions, you have to know someone who knows someone to be considered.

We don’t agree adding more Arbitrators, albeit great candidates, is necessarily efficient. We also didn’t see any discussion or meeting minutes from any advisory board about a defined need to fill these positions. There are many other ways to infuse efficiencies into the IL WC system like putting hard deadlines on trial, settlement or dismissal. The IL legislature did not conduct hearings and mandate there is a need for 20, 30 or 40 Arbitrators to facilitate claim closure. As the number of new IL WC claims continues to drop, we hope Chairman Latz, the Commission itself and the IL WC Advisory Board openly weigh and consider precisely how many Arbitrators and Commissioners are truly required to fulfill the mission of our IL Workers' Compensation Commission. When they start to do that, we may start to see if they are being efficient, accountable and effective in doing so.

While we are on the buzzwords of efficient, accountable and effective, we note the IWCC continues to have four satellite offices across the state that are simply there to provide more "lifetime-salaried-political-plum” government jobs. The addresses of these controversial offices are listed on the IWCC’s first web page. You may note the IWCC’s Collinsville office isn’t staffed and the job isn’t posted for reasons known only to the secret-powers-that-be. In our view, the value of satellite offices to IL business and taxpayers is virtually non-existent and the money to operate them is wasted. The folks who are assigned to the satellite offices do very little work of any demonstrable value; the only task it appears they perform is to provide printed WC forms that are continuously available online and therefore don't need five full-time office-minders across our state to occasionally give them out. Again, the folks who run those offices have payroll that has to exceed $200K plus those pensions that you and I will be certain to eventually pay.

The Three New Arbitrators include an Assistant Attorney General, One of IL Top WC Defense Attorneys and a Former Circuit Court Judge!
 
Molly Dearing, J.D. – our research indicates she is a solid WC attorney who was licensed in 2007. She has a WC background working in Attorney General Lisa Madigan’s office.
 
Jeffrey Huebsch, J.D. – Jeff was a very solid and knowledgeable WC defense attorney, licensed in 1984. He was one of the senior attorneys at a great west suburban-based defense firm and probably took a substantial pay cut to take this position. We are certain Jeff will bring strong WC expertise to his new job every day. If the stars were to align, at some future time, Arbitrator Huebsch could become IWCC Chairman Huebsch.
 
Ketki Steffen, J.D. – our research indicates she is a retired judge but also is a current judicial candidate. She was a Cook County prosecutor for 18 years before being appointed to the bench by our Supreme Court in 2010. There is no indication in her many online resumes and law firm website that she has any WC background but she does appear to be a quick learner.

The Governor appointed the following New Commissioner and Left the Other Vacancy Open
 
Michael Brennan, J.D. – Mike is a veteran and longtime IL WC lawyer who was with the storied Kane, Doy & Harrington firm for much of the middle of his career. Mike has written books and lectured about IL WC for years and is one of those brilliant and quiet folks who has forgotten more about workers’ comp than most folks may ever know. We salute this appointment as a great choice for the IWCC panel.
 
The Governor reappointed the Arbitrators listed below.

We feel every one of them represent the best of the IL WC legal community in terms of knowledge, honesty, training and professionalism. None of them like or will stand for WC phonies and frauds. We tell our readers they aren’t all conservative but they show up on time, listen carefully and decide claims to the best of their ability. We don’t think you can ask for more than that and salute our Governor for reappointing them.
 
William Gallagher, J.D., Carolyn Doherty, J.D., Joshua Luskin, J.D., Robert Williams J.D., Barbara Flores, J.D., Deborah Simpson, J.D., Brian Cronin, M.B.A., Kurt Carlson, J.D., Gregory Dollison, Edward Lee, J.D., Molly Mason, J.D., Douglas McCarthy, J.D.

The End of IL WC As We Know It May Still **Explode** Later This Year

Last but not least, we again saw the ruling in Mlynarczyk v. IWCC is final and the Appellate Court Workers’ Comp Division would not stay execution of the award of send the ruling to the IL Supreme Court for further analysis—this is the second of the three aberrant IL WC “traveling employee” rulings of which we are aware. We consider this concept to be an IL workers’ comp nuclear warhead waiting to go off and destroy all businesses and governments in our state. This ruling extended WC benefits to a cleaning lady who wasn’t at work or working—she  went home for lunch. While off the clock and in her own driveway, she fell down and injured herself. Because she supposedly didn’t work “on the premises of her employer” whatever that may now mean in this nutty state, her employer has to pay for what are unquestionably off-work injuries for a dangerous condition at her home.

Please note if she fell and injured herself and died due to the fall in her own driveway, the employer would have to pay all her bills and lost time and at least $650K in death benefits for an injury that was miles from where she was going to work. If she had to drive two hours to get to and from her job, the employer would owe for anything that happened to her the entire trip.

One has to wonder if her employer couldn’t sue her under Section 5 of the IL WC Act for negligence in maintaining her own driveway and therefore contributing to her own injuries. While that sounds mildly insane, we feel the whole “traveling employee” doctrine, as created and currently implemented by our courts is wholly inconsistent with the intent and purpose of the IL WC Act that is designed to provide insurance coverage for workers who are injured while working. To the extent our current Governor feels IL WC has been “reformed,” we caution this traveling employee bombshell is going to cause our WC costs to dramatically skyrocket. We continue to closely monitor the Venture-Newberg-Perini Webster & Stone v. IWCC claim to see what the IL Supreme Court does with all of it. We again point out Illinois will not need 30 Arbitrators and lots of Commissioners if every “traveling employee” is entitled to full benefits for any risk they face all day, as a matter of law. We hope our Governor and Attorney General Lisa Madigan and  great business leaders like Doug Whitley of the IL State Chamber of Commerce and Doug Oberhelman of Caterpillar openly go on the record to let the entire WC community know what a disaster this will be for businesses and jobs in our state.

If you have thoughts and comments, please reply or post them on our award-winning blog.

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Synopsis: Question from a reader in follow-up to our medical marijuana article last week—do drug and alcohol tests have to be performed by a certified professional to be “valid” in IL WC?

Editor’s comment: Our vote for lots of clients is to get a personal breathalyzer and walk around your plant with straws, insert a fresh straw for each worker and test everyone all the time. The question you might want to ask yourself is what to do if you, as an amateur alcohol/drug tester get a positive result? To our understanding, the alcohol or drug test doesn’t have to be administered by certified personnel but the samples have to be carefully stored. Illinois has several hundred pages of rules on storage of drug/alcohol test results.

We have included sections of the IL WC Act below that are pertinent. Please note the “testing” of a sample has to be performed by an accredited or certified testing laboratory. However, testing of a sample doesn’t necessarily equate with administering the initial taking of the sample.

We do not have a problem with our reader’s advice of getting a second sample and test by certified personnel when a non-professional gets a positive test outcome. We consider that a prudent decision. If you are going to deny a moderate or larger IL WC claim, you can’t be too safe and it is worth the additional money.

In our estimation, most post-accident drug and alcohol sampling and testing is done at the clinic or hospital where the injured worker has been taken for care. Such institutions should have certified personnel to obtain samples and test urine, blood, breath, hair follicles or other appropriate sampling concepts.

Please note the IL WC Act below--if the employee refuses post-accident sampling and testing of blood, breath or urine, the presumption is they were intoxicated and the intoxication proximately caused their injury.

No compensation shall be payable if (i) the employee's intoxication is the proximate cause of the employee's accidental injury or (ii) at the time the employee incurred the accidental injury, the employee was so intoxicated that the intoxication constituted a departure from the employment. Admissible evidence of the concentration of (1) alcohol, (2) cannabis as defined in the Cannabis Control Act, (3) a controlled substance listed in the Illinois Controlled Substances Act, or (4) an intoxicating compound listed in the Use of Intoxicating Compounds Act in the employee's blood, breath, or urine at the time the employee incurred the accidental injury shall be considered in any hearing under this Act to determine whether the employee was intoxicated at the time the employee incurred the accidental injuries. If at the time of the accidental injuries, there was 0.08% or more by weight of alcohol in the employee's blood, breath, or urine or if there is any evidence of impairment due to the unlawful or unauthorized use of (1) cannabis as defined in the Cannabis Control Act, (2) a controlled substance listed in the Illinois Controlled Substances Act, or (3) an intoxicating compound listed in the Use of Intoxicating Compounds Act or if the employee refuses to submit to testing of blood, breath, or urine, then there shall be a rebuttable presumption that the employee was intoxicated and that the intoxication was the proximate cause of the employee's injury. The employee may overcome the rebuttable presumption by the preponderance of the admissible evidence that the intoxication was not the sole proximate cause or proximate cause of the accidental injuries. Percentage by weight of alcohol in the blood shall be based on grams of alcohol per 100 milliliters of blood. Percentage by weight of alcohol in the breath shall be based upon grams of alcohol per 210 liters of breath. Any testing that has not been performed by an accredited or certified testing laboratory shall not be admissible in any hearing under this Act to determine whether the employee was intoxicated at the time the employee incurred the accidental injury.

Please note the following language from the IL WC Act about sample collection and the need for proper scientific testing.

All sample collection and testing for alcohol and drugs under this Section shall be performed in accordance with rules to be adopted by the Commission. These rules shall ensure:

(1) compliance with the National Labor Relations Act regarding collective bargaining agreements or regulations promulgated by the United States Department of Transportation;

(2) that samples are collected and tested in conformance with national and State legal and regulatory standards for the privacy of the individual being tested, and in a manner reasonably calculated to prevent substitutions or interference with the collection or testing of reliable sample;

(3) that split testing procedures are utilized;

(4) that sample collection is documented, and the documentation procedures include: 

    (A) the labeling of samples in a manner so as to reasonably preclude the probability of erroneous identification of test result; and

    (B) an opportunity for the employee to provide notification of any information which he or she considers relevant to the test, including identification of currently or recently used prescription or nonprescription drugs and other relevant medical information; 

(5) that sample collection, storage, and transportation to the place of testing is performed in a manner so as to reasonably preclude the probability of sample contamination or adulteration; and

(6) that chemical analyses of blood, urine, breath, or other bodily substance are performed according to nationally scientifically accepted analytical methods and procedures. 

Please note the bigger the WC claim, the more important the adherence to the rules. Please reply with your thoughts and comments.

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Synopsis: Self-Insured Best Practices for IL WC, HR, Safety and Risk Professionals.

Editor’s Comment: You are invited to the following:

What: An informal gathering of occupational health and workers compensation professionals, brought together to communicate and collaborate on leading and best practices in the areas of absence management including worker’s compensation, FMLA, short term disability, and group health.

Where: Edward Hospital in Naperville. Edward Hospital is located at 801 S. Washington Street, Naperville IL 60540. When parking on campus please park in the North Parking garage. You will then proceed to the Main Hospital entrance. At the front desk ask to be directed to the Education Center. Take the Education Center elevators to the 2nd floor. Once exiting off the elevator go to the right as we will be located in the Board Room E200.

Click here to see the location on Google Maps.

When: Friday September 20, 2013. Space is limited so please RSVP via email by August 24.

Time: 11:00 am to 1:00 pm.

Cost: No cost but bring your “A Game” to the discussions!

Meal: Hosted/provided by Go Self Insured, catered by Edward Hospital and Health Services.

What to bring: Your leading practices and best practices that you want to share; areas of concern, roadblocks, processes in needed of improvement, anything that you wish to share that someone else at the roundtable might have a best practice to share with you that will meet your need.

Best Practices: Click here to download the Best Practices Guide..

10-14-13; Did Rising WC Costs Kill Dominick's Finer Foods; What the Credit Default Might Mean to WC and You; Important PSEBA Ruling, analysis by Nathan Bernard, J.D. and more

Synopsis: Did Rising IL WC Costs Kill Dominick’s Finer Foods?

Editor’s comment: Our readers were saddened to hear Safeway, the parent corporation of Dominick’s grocery stores pulled the plug on 72 grocery stores and approximately 8,000 workers who all had generally excellent union jobs in our state with pensions and other benefits. One concern voiced by a reader is whether their climbing WC claims and costs took them out of business.

Dominick DiMatteo was born in Sicily and founded the grocery chain in 1918. In 1950, the DiMatteos opened their first supermarket, a 14,000-square-foot store. By 1968 the chain had reached 19 stores. The DiMatteos continued to operate the chain under the financial backing of Fisher Foods. The DiMatteos continued to expand and acquired both Kohl's Chicago area locations and Eagle stores. In 1993, Dominick DiMatteo, Jr. died from lung cancer. News sources indicate his daughters and son did not have the same passion for the supermarket business. Safeway bought Dominick's in 1998 and kept it open until right now.

Supermarket chains live in a business with fierce competition and razor-thin margins. Dominick’s would have had numerous employees who are truck drivers and transportation workers of various sorts. They also have managers and other workers that provide support for more than one location and visit several stores, when needed. Following current IL WC law, all such workers are now “traveling employees” and would be covered as a matter of law for non-work-related risks, like falling in your own driveway or getting into a motor vehicle accident miles away from your job. You don’t have to be “traveling” to be covered; you just have to establish “traveling employee” status and have any injury or illness. Such workers are now covered in a global and no-fault fashion while workers who don’t “travel” or only work at one store are limited to only work-related risks. With respect to the members of our judiciary who created this unsustainable concept, we are certain it is going to result in skyrocketing WC costs, particularly for cash-strapped municipalities and government bodies, as most of their workers are now “travelers.”

As we have advised, no other state in the U.S. provides such coverage but Illinois employers are currently being forced to do so while we await a ruling from our IL Supreme Court in The Venture-Newberg-Perini, Webster and Stone v. IWCC decision. Their ruling is expected next month. It is the hope of all business observers that our highest court will reject the judicially created concept and return our state to traditional principles of WC law.

On the IL WC front, Dominick’s Finer Foods has lots and lots of pending IL WC claims. Most of the claims are for actual work injuries. Their WC claims and defense team has been appropriately fighting the IL workers’ comp claims that didn’t “arise out of and in the course of” employment. Now, that limit-switch no longer applies and such claims have to be automatically accepted and paid for their “travelers.”

In our view, the managers at Safeway, their parent corporation are watching our state continue to get more and more business unfriendly. We are seeing our Illinois legislature fighting and kicking to keep unfunded government worker “pensions” in place that is certain to cost billions for our kids, grandkids and great-great-grandkids. Our favorite government “pension” tidbit is the recent news confirming the highest “pension” in our state is held by Dr. Leslie Heffez who was a professor at the U. of IL Hospital in Chicago. Reports indicate he is now being paid $516,413 per year from our state government “pension” program. Dr. Heffez doesn’t appear to need the taxpayer cash, as he is still working at not one but two different medical offices in Chicago and Highland Park. His “pension” will continue to receive compounded COLA increases at over $15K per year. In 23 years, his annual “pension” payout will exceed $1M per year.

One reason we put “pension” in quotes is 60% of the money or more than $300,000 per year Dr. Heffez is currently receiving isn’t from personal contributions, matching state funds or interest on his “pension” investments—the money is “unfunded” which means he is being paid by you and me with our current tax dollars! Over the next 23 years, Dr. Heffez is certain to receive at least $15-25 million dollars from Illinois taxpayers in exchange for what had to be a fraction of that amount in pension contributions. Please don’t focus solely on this great physician; thousands of other former state workers are getting billions from us in the same fashion. And we don’t and can’t blame Dr. Heffez for taking the tens of millions of taxpayer dollars to which he is clearly entitled—our criticism is focused on those who created, didn’t properly fund and are fighting to keep this unsustainable mess intact.

On another front, our judiciary remains the highest paid in the United States and they are guaranteed 3% annual raises in the IL Constitution. Cook County Board Chair Toni Preckwinkle noted the 432+ judges and justices in this county were paying less than $1 per month for family healthcare contributions that cost the county as much as $1,700 per month! One has to wonder if the effectively free benefits shouldn’t be subject to income taxes. Someone noticed the bailiffs and clerks who worked for the judges/justices were paying over 100 times more for their healthcare share than their judicial bosses! We applaud Ms. Preckwinkle for working to change that anomaly and get “fair share” contributions from our judges. On a similar front, after only eight years of service, all IL judges and justices could retire and get “free” or taxpayer-paid lifetime family healthcare coverage. Governor Quinn passed a law requiring them to make reasonable contributions and four class actions were filed by our judiciary to try to block any contributions. That matter is now moving directly to our IL Supreme Court for their ruling.

Business leaders see these sorts of shenanigans in our state and shake their heads and wonder how it could get much worse. If you don’t feel the “traveling employee” expansion was the sort of thing that caused Safeway to drop their interest in doing business in our state, you don’t know much about business. We hope the secret-powers-that-be that run the Illinois Workers’ Compensation Commission start to understand the “traveling employee” idea, like government worker “pensions” and the freebies accorded to our well-paid judiciary, are brought into line with other states.

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

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Synopsis: The United States at the Precipice of Global Financial Disaster—What Does It All Mean for Workers’ Comp?

Editor’s Comment: If you have been reading about the “government shutdown” at the federal level, you might not understand the brinkmanship going on has little or nothing to do with you, as our readers—we aren’t truly affected by government workers being furloughed with or without pay for several months. What might be coming October 17, 2013 (or in four short days) is truly ominous and dangerous. At that time, it is possible our heavily leveraged federal government that is now almost $17 trillion dollars in total debt may default or not timely pay some of what it owes to borrowers. If you aren’t sure, very few people across our globe like to even think of the massive financial tsunami that might follow. We aren’t trying to scare anyone but we do think you should at least know the battlefield in which you may soon be deployed. Basically, what has to happen is the U.S. President and legislature have to negotiated and agree to timely pay our debts or we may be, for lack of a better term, smoked.

We Have Actually Defaulted in the Past, Contrary to Popular Belief

·         The U.S. first “defaulted” on what they owed in 1790, when our newly formed nation deferred until 1801 interest obligations on debt it assumed from the states. We did make the late payments when due.

·         In 1933, our country suddenly refused to make payments in gold to redeem bonds that gave holders the option of requesting gold in payment. While investors were paid on time and in full with cash, many argued it was a “default” because bondholders weren’t paid in the fashion to which they were entitled.

·         In 1979, the U.S. was late on about $122 million of bills, in part because of “severe technical difficulties” the Treasury Department claimed was due to a word-processing failure.

If you recall what the popular movie Despicable Me called the Bank of Evil, i.e., Lehman Brothers Holdings Inc. and their collapse about five years ago meant, you might understand the global financial disaster that lies before us this Thursday. A U.S. government default could be a worldwide economic calamity unlike any in recorded history. Failure by the United States, the world largest borrower to timely pay its massive debt will

      Devastate stock markets around the globe;

      Halt an erstwhile $5 trillion lending mechanism for investors who rely on U.S. Treasury bonds;

      Immediately skyrocket borrowing/mortgage costs for billions of people and employers large and small;

      Decimate the U.S. dollar along with many other countries’ currencies; and

      Throw U.S. and world economies into a recession that probably would become a depression.

The $12 trillion of currently outstanding U.S. government debt is 23 times the $517 billion Lehman Brothers owed when it filed for bankruptcy Sept. 15, 2008. The U.S. stock market lost almost half its value in the five months following Lehman’s collapse. The country had its worst recession since the Great Depression that our fathers and mothers lived through, taking the global economy down with it. In 2008-9, U.S. unemployment surged to the highest levels in three decades. If those things happen, starting this Thursday, our personnel, workers’ compensation and human resource systems are certain to be strained. Massive layoffs and other nasty things may happen in the coming months, if our politicians can’t get their acts together.

In 2008, the Second Great Depression was prevented only by unprecedented action by the Federal Reserve, which again borrowed the money and recycled $3 trillion into the financial system. The U.S. Treasury provided about $300 billion of capital for the nation’s banks to put them back on their feet.

What is on the line

The U.S. Treasury Department has $120 billion of short-term bonds coming due in four days on Oct. 17, 2013. An additional $93 billion of bills are due in ten days on Oct. 24. On Halloween, $150 billion needs to be paid to bondholders, including two-year and five-year notes that mature. The total due from Oct. 17 through Nov. 7 is $417 billion. The President and Congress have to agree to pay it. We also hope they start to see

What does all this mean to Workers’ Comp?

In short, remember the government shutdown is boring and has almost nothing to do with anything other than for the furloughed federal government workers who can all catch up in their normal, snail-like fashion. In contrast, a U.S. credit default will be a financial cataclysm of historic proportions.

From a workers’ comp perspective, a credit default will insure rapidly rising interest rates for companies borrowing cash and folks taking out mortgages. If it happens, it is going to cost jobs, jobs and more jobs. Expect and plan ahead for layoffs—consider using our KCB&A pre-layoff disclosure report to have your employees confirm they aren’t injured, don’t know any other worker that is injured and don’t need accommodation for injuries, other than as outlined. We are happy to provide our form for your review and consideration; send a reply.

Finally, our advice to all of our readers is to consider writing a NastyGram to your U.S. Senator and Congressman and then basically hold your breath. We feel we owe it to you to tell you this is looming financial catastrophe is out there and may affect your lives in a very significant way. We are certain if our leaders in Washington can’t get their ducks aligned, things are going to go badly in lots of directions starting this Thursday. If you have one, you might want to talk to or at least email your stock broker for their thinking. Either way, there isn’t a whole lot you or I can do about it, so hang in there while hoping for the best and prepare for the worst.

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

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Synopsis: Moving Loose Asphalt Chunks is an “Emergency” if Our Courts Say So. We Feel Such Rulings Have a Major Financial Impact in Providing Lifetime Healthcare for Police Officers/Firefighters Employed on the “Highway to the Danger Zone!” Analysis by Nathan S. Bernard, J.D.

Editor’s Comment: The Illinois Appellate Court in Springborn v. The Village of Sugar Grove, 2013 IL App (2d) 120861 (issued September 25, 2013), considered a claim for pension and healthcare benefits out of Kane County, confirmed the employer of a full-time law enforcement officer must pay the entire lifetime premium of the employer’s health insurance plan for that injured employee suffering a “catastrophic” injury. Please note for a young or middle-aged officer, lifetime healthcare benefits could cost several million dollars for taxpayers.

In the case at bar, the critical issue was whether an “emergency” component was met in a given situation. Specifically, the Court concluded an officer attempting to clear a two-lane highway in traffic of 15 chunks of 20 pounds of asphalt a piece which fell into the roadway was improperly denied benefits under Section 10. The officer requested assistance from the village public works department for assistance in removing the asphalt but their reply was the Illinois Department of Transportation (IDOT) had responsibility for clearing the road. Instead of waiting for IDOT to arrive and believing the asphalt in the roadway presented an “emergency” and an “immediate safety hazard,” the officer took it upon themselves and activated his lights, positioned his vehicle in the roadway, then attempted to remove the asphalt by hand, and sustained a strain injury that will disable him from such work for life.

Additionally, in a different scenario, an officer responded to a traffic accident with potential injuries and arrived to find a 10-15 foot traffic signal light pole lying across the road after it appeared to have been struck by a vehicle. Instead of waiting for a tow truck to arrive and believing the pole with live wires presented an “emergency” and an “immediate safety hazard,” two officers assisted in removing the pole manually and one sustained injury.

Section 10 of Public Safety Employee Benefits or PSEBA provides in relevant part:

“(a) An employer who employs a full-time law enforcement, correctional or correctional probation officer, or firefighter, who, on or after the effective date of this Act suffers a catastrophic injury or is killed in the line of duty shall pay the entire premium of the employer’s health insurance plan for the injured employee, the injured employee’s spouse, and for each dependent child of the injured employee

b) In order for the law enforcement, correctional or correctional probation officer, firefighter, spouse, or dependent children to be eligible for insurance coverage under this Act, the injury or death must have occurred as the result of the officer’s response to fresh pursuit, the officer or firefighter’s response to what is reasonably believed to be an emergency, an unlawful act perpetrated by another, or during the investigation of a criminal act. Nothing in this Section shall be construed to limit health insurance coverage or pension benefits for which the officer, firefighter, spouse, or dependent children may otherwise be eligible.”

Accordingly, the injury or death must have occurred as the result of the officer’s response to what is reasonably believed to be an emergency, an unlawful act perpetrated by another, or during the investigation of a criminal act.

In each scenario, both officers were ostensibly concerned for both the public’s safety and their own safety while positioned on the road. Additionally, they were concerned with vital resources being improperly allocated and prevented from being used elsewhere while they provided traffic direction waiting for other village services. The taxpayers are going to pay for lifetime duty disability pay—should they also have to pay healthcare benefits, as if these relatively innocuous events were a true “emergency.”

The Appellate Court noted Section 10 requires a determination of

(1) whether there was a subjective belief that they were facing an emergency and

(2) whether that belief was objectively reasonable.

The subjective component was met by testimony whether they felt they were in an emergency. The objective component was met if a reasonable person would find an instance involving imminent danger to a person or property requiring an urgent response. It also requires an unforeseen circumstance or event requiring that immediate action. The requirement of an unforeseen event is shown by the illustration stating, “they were far from help when the emergency overtook them.”

Although in both the above mentioned scenarios, the officers conceded it would have been possible to wait for assistance, the Court noted it would not have been “appropriate” given the hazards of the situation. In each case, manual removal was the most readily available means and so the most suited to the pressing need to clear the roadway of both the obstruction and the squad car. From the defense side, it is hard to understand how it is an “emergency” if the officers involved had lots of options and are calmly making calls and asking when appropriate assistance to arrive. We ask what a police officer or firefighter might do in the course of their work that might result in injury but isn’t an “emergency.” From our view, our Courts are bending over backwards to insure such workers always receive lifetime healthcare coverage, paid by the taxpayers.

Please contact expert defense attorneys at Keefe, Campbell, Biery and Associates, LLC for an analysis on whether a specific example of a catastrophic injuries or death sustained to a full-time law enforcement, correctional or correctional probation officer, or firefighter is applicable to Section 10 of Public Safety Employee Benefits requiring payment of the entire lifetime premium of the employer’s health insurance plan. Upon receipt of complete file materials, we can determine whether aggressive handling of the claim is appropriate, or acceptance preventing unnecessary litigation expenses.

This article was researched and written by Nathan S. Bernard, J.D. who can be reached at nbernard@keefe-law.com or 312-756-3726.

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Coming events from KCB&A:

REBEX 2013  

REBEX 2013

The Westin Chicago North Shore, Wheeling, IL
Preliminary Program
REBEX 2013 - The Regional Risk Management Conference and Exhibition, Sponsored by the Chicago and Wisconsin Chapter of RIMS
You are invited to register for REBEX 2013, the Midwest's premier learning environment for risk managers.

Registration

Online Registration - Follow this link to register today.
Questions?
Contact Brenda Howe at REBEX 2013 Headquarters at +1-847-480-9712.

10-7-13; If You Need Ethics for Adjusters CEU's, Let Us Know!; Subcontractor Off the Hook on Defending General Contractor, Analysis by Chris St. Peter, J.D.; Stat...

Synopsis: Continuing Education Units—Does Your Claims Team Need Presentations on Ethics for Adjusters 2013-2014? Do You Want the Needed CEUs This Year??

Editor’s comment: We had a reader approach us at the recent smash presentation by Accelerated Rehabilitation Centers® about the need for adjusters to get CEUs, particularly on Ethics. In response to her suggestion, we have worked hard and developed Ethics for Adjusters 2013-2014. Our goal was to touch on all the ethical issues important for your claims staff. As you read this, we have sent a draft of the presentation to a number of clients and claims managers for their final review, comments and suggestions. Our goal is to provide an entertaining and informative presentation that will meet your CEU requirements.

Some of the topics we will cover include:

·         Defining Ethics for Claims Handlers;

·         Who’s On First--No Side Deals or Dealings;

·         Ethics in Handling Medicare Set-Aside Accounts;

·         Ethical Considerations in Dealing with Resignations;

·         How Do You Insure You Are Talking to an Attorney?;

·         What If a Lawyer Starts to Act Unlike a Lawyer?;

·         Understanding HIPAA in Handling Personal Injury/WC Claims;

·         Avoiding Conflicts of Interest;

·         Always Tell the Truth;

·         Be Clear and Open about Important Claims Decisions;

·         Don’t Leave Your Defense Attorney Dangling;

·         Be Crystal-Clear about Settlement Demands and Offers;

·         Keep Your Claims to Yourself, Account and Company;

·         Bad Faith Claims Handling;

·         You May Be Responsible for Vendors Acting in Bad Faith;

·         Attack Claims Fraud When You are Sure of It;

·         And more!!

We are happy to present these comprehensive and thoroughly researched materials in a lunch and learn at your offices. We can tailor the time involved to your needs. If you want that presentation communicated to claims staff across the country in a webinar, we are happy to assist to set that up. Our presentation team includes your editor, Shawn R. Biery, J.D., M.S.C.C. and John P. Campbell, Jr., J.D. who all teach Workers’ Compensation Law and Ethics at The John Marshall Law School in Chicago.

If you have interest in a presentation, please reply. Please feel free to post comments and thoughts on our award-winning blog.

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Synopsis: The Illinois Appellate Court rules a subcontractor’s liability carrier had no duty to defend the general contractor from a negligence claim brought by the subcontractor’s injured employee alleging the general contractor alone was directly negligent. Analysis by Chris St. Peter, J.D.

Editor’s comment: We feel the Illinois Appellate Court correctly applied the plain language of the policy to the facts alleged in the original underlying complaint—and not to additional facts in the general contractor’s third-party complaint—to hold there was no duty to defend where there were no allegations of vicarious liability. Any other result would allow a party seeking coverage to plead additional “self-serving” facts in a third-party complaint for the sole purpose of obtaining coverage.       

By way of background, in November 2009, R. A. Cullinan & Son, Inc. (“Cullinan”) became the general contractor of a construction project for the Illinois Department of Transportation in Peoria, Illinois. Cullinan entered into a subcontract agreement with Durdel & Sons Tree Service & Landscaping, Inc. (“Durdel”) to clear trees and logs at the work site. In June 2010, one of Durdel’s employees, Charles Hill, Jr., was injured when the equipment he was operating struck a live overhead power line.

In May 2011, Hill filed a two-count negligence complaint in Peoria County against Cullinan and another defendant alleging both defendants were directly negligent in supervising, maintaining, and/or providing warnings regarding the live overhead power lines near the work site. Of note, Hill’s complaint did not contain any allegations that his employer, Durdel, was negligent in any manner. In April 2012—nearly a year after the original complaint was filed—Cullinan filed a third-party complaint alleging Durdel was solely negligent for Hill’s injuries. Cullinan then contacted Durdel’s liability carrier, Pekin Insurance Company, Inc. (“Pekin”), claiming it had a duty to defend Cullinan as an additional insured under Durdel’s policy. Pekin refused to represent Cullinan, claiming Durdel’s policy did not cover Cullinan when the complaint alleged Cullinan was directly negligent for Hill’s injuries, and not vicariously liable for Durdel’s negligent actions. Pekin sought declaratory relief asking the court to find Pekin had no duty to defend Cullinan. However, the trial court ruled against Pekin and held it did, in fact, have a duty to defend Cullinan under the terms of the policy.

In Pekin Insurance Co. v. United Contractor Midwest, 2013 IL App (3d) 120803 (Sept. 18, 2013), the Illinois Appellate Court, Third District, reversed and remanded the trial court’s ruling. The Appellate Court first looked to the plain language of the insurance policy and noted it only provided coverage for vicarious liability proximately resulting from Durdel’s “ongoing operations performed for that Additional Insured during the Policy Period.” In interpreting this provision, the court noted the general rule that a person who employs an independent contractor is not vicariously liable for the acts or omissions of an independent contractor except under very specific circumstances where the general contractor retains control over the independent contractor’s work.

Next, the Appellate Court looked to the underlying allegations of Hill’s negligence complaint to determine whether it alleged sufficient facts that the injuries occurred during Durdel’s “ongoing operations performed for that Additional Insured during the Policy Period.” In doing so, the Court noted the complaint did not allege any facts identifying a negligent act performed by Durdel which resulted from the directives of the general contractor. Instead, the court noted the complaint alleged Cullinan, acting alone, negligently failed to supervise and warn Hill of the dangers posed by the live overhead power lines on the work site. Accordingly, the Court held that the failure to specify a negligent act committed by Durdel not only failed to trigger coverage to an additional insured in Durdel’s insurance policy, but also defeated a theory of vicarious liability.

Of note, the court further declined to consider Cullinan’s “potentially self-serving, third-party complaint” for allegations of Durdel’s negligence, as such a complaint filed after declaratory relief was sought could be used “to supply the missing allegations from the original complaint in an attempt to gain coverage as the additional insured under the policy.”

As noted above, we feel this is the correct result. The allegations of the original underlying complaint contained no facts that would trigger coverage as an additional insured under the theory of vicarious liability. Simply stated, if the insurance policy does not cover an additional insured’s direct negligence, then there is no duty to defend in an action alleging the additional insured was directly negligent. Moreover, an additional insured should not be able to plead additional “self-serving” facts as an end-around to obtain coverage.

This article was researched and written by general liability and employment practices liability law specialist Chris St. Peter, J.D. Contact him at cstpeter@keefe-law.com or (312) 756-3714 and ask him to review your insurance policies and other contracts.

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Synopsis: The Fun Bunch at NCCI Provide More WC Statistics Than You Can Shake a Stick At.

Editor’s comment: If you can’t sleep some night and want to do some in-depth analysis of how the IL WC system compares to the rest of the country, take a look at this excellent statistical treatise from NCCI that is online at: https://www.ncci.com/documents/SAF_IL.pdf

Titled Illinois State Advisory Forum and dated September 13, 2013, the report is lengthy, detailed and challenging to fully comprehend. We do note our solid and hard-working IWCC Chairman Michael Latz participated in creating and presenting this analysis. Illinois highlights are listed as:

·         Approved loss costs are 14% below their level prior to the 2011 IL Workers’ Compensation Reforms—we consider this very positive news;

·         Despite lagging economic recovery, increases in payrolls are contributing to workers’ compensation premium increases;

·         Our Combined Ratio is below 100% for the first time in more than a decade.

The report confirms when many businesspeople already know about our state—job losses in the past two recessions greatly exceeded the national average and show no signs of lessening. Further, the IL unemployment rate and lack of growth in recovery is well over the U.S. average—there is a pronounced and growing gap we feel is due to the miserable way our State and City of Chicago governments are run.

We were mildly aghast to see IL State Rep. Barbara Flynn Currie attacking long-time Illinois-based agri-processor Archer Daniels Midland for seeking tax incentives from State government—she specifically characterized it as “blackmail” in a fashion we consider ludicrous. Obviously, she could just stand opposed and avoid the hysterical attack on this major IL employer. We are certain how elated other states and cities might be to have ADM move their HQ there. As the vast majority of IL taxes are now going to fund and pay what some people call “government pensions” for folks that no longer work for our state, certainly State government can’t lose any tax dollars to keep major businesses here or have them expand their operations in our state. One has to wonder how long our government unions can continue to block “pension” reform in Springfield and whether that might occur before the hollow house of cards falls into the same dark hole in which the City of Detroit’s pensions are currently sitting.

The NCCI report also provides clear documentation of the industries in IL that continue to struggle. Construction employment is down over 30%--this may be exacerbated by the silly new court-created “traveling employee” rule that extends WC coverage of non-work-related accidents/illnesses to all construction workers in our state. Manufacturing jobs are also down more than 13%. We were mildly surprised to see jobs in the information industry demonstrate a 13.7% loss, as it seems that job sector continues to grow. Trade/Transportation and Utility jobs showed an almost 5% loss—again this sector is certain to continue to show more job losses as the “traveling employee” concept takes hold.

Other statistical metrics of note include:

      Illinois lost time claim frequency is down 35.2% for the period from 1997-2011 (we feel this is one of the main reason overall WC claims are down);

      Average claim frequency in IL is down and remains under the level of our sister states;

      IL Permanent Partial Claim Frequency is higher than all of our bordering states and close to double the national average;
Indemnity benefits in IL are dramatically higher than medical benefits—we pay so much for PPD and lost time compared to other states and the national average;

      Indemnity severity in IL has noticeably declined since 2008.

All of it continues to change and morph as we move into the rest of this decade. We are sure most of the current IL Arbitrators/Commissioners are greatly improved and are doing their best to keep Illinois in line with other states.

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

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Synopsis: Chairman Latz and the IWCC announce the 2014 Arbitration Assignments.

Editor’s comment: Whoever the Arbitrator might be that is currently handling your downstate claims right now is almost certainly going to change. Most business observers feel the changes are relatively reasonable—please remember you can’t pick 30 Arbitrators that I might like and I can’t pick 30 Arbitrators that you might like—we are all human and the nature of litigation is resolving differences fairly and amicably. We again assert the IL WC Arbitrators are dramatically honest, generally fair and professional. They are much more sensitive to WC fraud by claimants than in years past. We encourage all business representatives to attend pretrials and hearings and meet our hearing officers to insure you are getting solid value from our state WC administration that you pay for.

2014 IL WC Arbitration assignments announced

Effective January 1, 2014, these IL WC Arbitrators will have the following assignments:

Zone 1:   Collinsville, Herrin, Mt Vernon: 

Lee, Lindsay, Zanotti

Zone 2:   Springfield, Quincy, Urbana: 

Dearing, Gallagher, Pulia

Zone 3:   Bloomington, Peoria, Rock Island: 

Erbacci, Holland, McCarthy

Zone 4:   Geneva, New Lenox, Ottawa:  

Granada, Mathis, O'Malley

Zone 5:   Rockford, Waukegan, Woodstock:  

Andros, Falcioni, Fratianni

Zone 6:  Chicago, Wheaton:  

Cronin, Doherty, Luskin

Zone 7:  Chicago:  

Black, Carlson, Dollison, Flores, Huebsch, Kane, Kelmanson, Mason, Simpson, Steffen, Thompson-Smith, Williams

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

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Synopsis: Dr. Steven Delheimer, rest in peace

Editor’s comment: Dr. Steven C. Delheimer, MD, 64, of Peru died last week in his home. He was a longtime participant in the IL WC system and testified in numerous hearings and reported decisions. He was a positive and healing force in many people’s lives.

Dr. Delheimer was born in Streator, IL. He earned his undergraduate degree from the University of Illinois at Urbana-Champaign and earned his doctorate in medicine from the University of Illinois Rockford School of Medicine. He completed a surgical internship at Dartmouth College in New Hampshire and a neurosurgical residency at Mayo Clinic in Rochester, Minn. After finishing his studies, he was a practicing neurosurgeon in Rockford for several years then in La Salle-Peru and Bloomington. In lieu of flowers, memorials may be directed to the charity of the donor’s choice or the family of Steven C. Delheimer. Online condolences may be directed to the family at duffyfuneralhome.com.
 

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