11-26-13; IL Troubled Judicial Selection Process-What It Means to WC; WC Advisory Rate Drop Means Nothing; Fla WC Conference is Rocking and much more

Synopsis: Justice for Sale in Illinois and It is All Completely Legal—It Just Looks Bad.

Editor’s comment: We join with Ed Murnane of the IL Civil Justice League to again call for judicial selection reform in our state. Last week, 40+ judicial candidates were selected to the ballot by the Cook County Democratic Party. Cook County, largest by far of the 102 counties in Illinois, has 268 circuit court judges and most are selected in the manner outlined below. There is no true “democracy “ involved because there is no opposing party to provide any competition—if you get on the ballot and pay the $30K that comes with that spot, you are in.

This twisted judicial selection process is one of the reasons Cook County currently has an “insane” person as a judge—she pled not guilty to criminal charges and was acquitted based on a finding of insanity by a  court of law. Judge Cynthia Brim, 54, was named in a complaint filed last Monday by the Judicial Inquiry Board alleging conduct "prejudicial to the administration of justice and that brought the judicial office into disrepute." Brim has been suspended with pay from her $182,000-a-year job since March 2012 after she launched into a lengthy tirade during her traffic court call in the Markham courthouse and then shoved a Cook County deputy outside the Daley Center a day later. She has been hospitalized for bipolar mood disorder at least six times since 1993, including for three weeks after shoving the deputy, according to the complaint. Brim was retained by voters for an additional six-year term in 2012 even after being suspended and charged with battery.

Please note Cook County taxpayers have paid her about $300,000 not to work as a judge for the last 17 months. As she has been a judge for about 20 years, IL taxpayers will have to keep paying her a judicial “pension” for the rest of her life, whether she keeps her robe or is forced to give it up.

Illinois and more important, Cook County judges are not picked based on merit or legal experience or brilliance or  LSAT scores or the name of the law school on their diploma. Cook County judicial hopefuls are asked questions by the Judicial Selection Committee of the Cook County Democratic Party. One’s status as a great lawyer does not appear to be the primary concern.

Here are three questions most of the Cook County judicial candidates are asked:

      If you are chosen for endorsement by the Party will you support the entire ticket?  

      If you are not chosen for endorsement will you run against the ticket?

      The Party incurs certain costs on behalf of the ticket, for mailing and other expenses. Will you or your campaign be willing and able to raise the $30,000 necessary to defray those expenses?

Please note there are over 40 candidates that have been selected by the party for the can’t-miss election openings. If they each donate $30,000 (and the party leaders don’t waive that donation), the Cook County Democratic Party picks up a cool $1,200,000 for its coffers making it even more powerful than it already is. Once you are in as a judge, you rapidly make more money than Governor Quinn and get guaranteed wage increases at 3% per year—we know of no other government job with guaranteed annual increases. The same judges are vested in their pensions in 8 years, less time than is needed to contribute one full year of salary to their guaranteed judicial pensions that also have guaranteed 3% increases for their lifetimes. Taxpayers are paying the lion’s share of this post-employment cost out of current tax dollars—it isn’t actually a “pension.”

How does this impact the IL Workers’ Compensation system? Well, all of the five justices on the Illinois Appellate Court, Workers’ Compensation Division generally act as a unit. We haven’t seen a staunch representative of IL business on that panel since Justice Allan Stouder retired in the early 1990’s. We almost never see a dissent that even mentions the interests of IL business. The Illinois Appellate Court WC panel is strongly influenced by the judicial selection process in Cook County and the Cook County Appellate Court justice is typically the leader of the WC panel. Those justices lawfully run for election and legitimately collect donations for their campaigns from the Plaintiff-Petitioner lawyers who appear before them. As you read this, the amount of such donations don’t have to be disclosed to the other side in the litigation.

With respect to the members of the panel, we feel they are effectively tossing the entire WC system on its collective ear with their new version of the “traveling employee” concept that is now embodied in three separate rulings. Please note you don’t have to be “traveling” to be a “traveling employee” or injured during actual travel. A “traveling employee” is covered under WC for lots of personal risks that have literally nothing to do with work and don’t have to be either on the clock or in the workplace—such workers are covered on a 24/7/365 basis when they are working at home. If they don’t work in their homes, they are covered while driving to and from work or on breaks for any reasonable and foreseeable activity, including falling in their own driveways. We again point out the members of the Appellate Court panel can’t be interpreting the Act or the Rules because the term “traveling employee” isn’t in either.

For other recent and major changes to traditional WC concepts, in the Metropolitan Water Reclamation District v. IWCC ruling, they coined the new workers’ comp term “street risk” that also doesn’t appear in the Act or the Rules but it does insure benefits will be awarded. It is mildly odd to note the “traveling employee” tag wasn’t provided to that worker. In the Forest Preserve District of Will County ruling, the panel reversed 100 years of Illinois WC law to “remove” the shoulder from the arm in a fashion designed to strip away the statutory credit to which employers have been entitled for prior injuries.

At some point, we hope someone in this state starts to see the judicial selection process needs to be given a long hard look. Men as astute as Ed Murnane and his overall approach to selecting a great state judiciary need to be considered when they are pointing out how dysfunctional our current system is. It is our strong hope this twisted process doesn’t select lots more judicial candidates who are legally insane for future spots behind the bench.

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

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Synopsis: Illinois WC Insurance “Advisory Rate” Drop is Not News, Happens Every Year and Doesn’t Mean Anything.

Editor’s comment: One funny thing we have seen once a year for decades and decades is an annual announcement in August about the stat-rats at NCCI recommending advisory rates for WC insurance should drop, by either a little or a lot. We consider this to be similar to selling stock in the Golden Gate Bridge—it sounds good but it isn’t worth anything to anyone. The PR mill at the IL WC Commission just dropped the most recent advisory rate hot flash for everyone to read. It says:

NCCI files for 4.5% decrease in 2014 WC advisory insurance rates

The National Council on Compensation Insurance (NCCI) filed for an 4.5% decrease in voluntary advisory insurance rates, effective January 1, 2014, following the 3.8% decrease in 2013. These significant savings follow the enactment of House Bill 1698 on June 28, 2011.

Before we start popping champagne corks and tossing confetti, we recommend everyone calm down. We have no true idea what advisory rates might be and why anyone thinks they are news. If rates dropped as much as NCCI says they should, WC insurance should be free in this state! Every year, year in and year out, NCCI recommends decreases in IL WC advisory rates. In the 2009 IWCC annual report, the IWCC heralded the fact advisory rates dropped 33% from 1990 to 2008. The IWCC indicated the massive reduction in advisory rates was calculated using advisory rates filed annually by the National Council on Compensation Insurance (“NCCI”), a rating organization authorized to file rates on behalf of companies pursuant to Section 459 of the Illinois Insurance Code (215 ILCS 5/459).

Blah, blah, blah. In 2012, IL WC advisory rates dropped 3.8%.

http://insurance.illinois.gov/newsrls/2012/08/DOIReviewsReductionOfWorkersCompRate.pdf

In 2011, IL WC advisory rates dropped 8.8%.

http://www.insurancejournal.com/magazines/features/2011/09/19/216159.htm

Please don’t tell us any more about IL WC advisory rates and how they are dropping. Advisory rates are clearly trumped by actual WC insurance premiums. This is the best source for the actual WC premium ranking that will change again on January 1, 2014:

http://www.cbs.state.or.us/external/dir/wc_cost/files/report_summary.pdf

There is nothing advisory about it—the State of Oregon looks at what IL business is actually paying and we are number 4 in the country. By number 4, they mean fourth highest or, to be more blunt, fourth worst. As the defense team at KCB&A is currently predicting, if the “traveling employee” concept sticks and IL business is going to have to pay for personal risks that have nothing to do with work, we are certain to soon be the worst state in the U.S. for workers’ compensation premiums. Yes, folks; we care about actual premiums; not advisory and ethereal rates.

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

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Synopsis: Hello from Orlando and the Florida WC Educational Conference(s)!!

Editor’s comment: The 68th Annual Workers’ Compensation Educational Conference and the 25th Annual Safety and Health Conference is rocking along as you read this. The Conference focuses on national workers’ compensation and safety industries. Particularly as it relates to workers’ compensation, it has always been felt each state, having different laws, had to deal with its own issues separate from other states. No longer is this the case. This emerging national WC conference has evolved into a gathering of all stakeholders, regardless of jurisdiction or state, to study and be educated on issues of common concern - issues that have no geographical boundaries. Regardless of your interests, your positions in these two important industries, and your role, this conference is designed to provide something of significance for everyone. The unprecedented number of breakouts and the quality of presenters representing states throughout the country truly make this a national event not to be missed.

Conference of Partnerships:

This nationally acclaimed annual conference remains the premier forum for the study of workers’ compensation, workplace safety and health, and related issues primarily because of the continued partnerships of state and national associations, all being recognized as leaders within their particular interest areas. Partners within this group include The Safety & Health Institute, The National Institute for Occupational Safety and Health (NIOSH), The Centers for Disease Control and Prevention (CDC), The University of South Florida, The Workers’ Compensation Institute, the Florida and National Associations of PEOs, The American Staffing Association, The Southern Association of Workers’ Compensation Administrators (SAWCA), The Workers' Compensation Defense Institute, The Florida Orthopedic Society, The Florida Chiropractic Association, The Florida Association of Occupational and Environmental Medicine, The Florida Academy of Pain Medicine, The Florida Society of Interventional Pain Physicians, The Educational Research Centers at The University of South Florida, The University of North Carolina at Chapel Hill, and The Deep South ERC at The University of Alabama at Birmingham and Auburn University, The Professional Mediation Institute (PMI), The National Association of Workers’ Compensation Judiciary, Inc. (NAWCJ), Medical Group Management Association, and Eastern Pain Association. Leading providers have become prime sponsors and exhibitors of the conference and join the partnerships to create the most comprehensive workers’ compensation and workplace safety conference in the nation. First time partners for this year’s conference are the American Health Lawyers Association, Washington, DC, and the Elder Law Section of the Florida Bar.

Program:

This year’s program offers creative and innovative speakers from throughout the United States. The hottest issues in workers’ compensation and safety are being discussed. All aspects of workers’ compensation and workplace safety will be the topics of discussion with breakouts for risk managers, regulators, safety professionals, health care providers, adjusters, insurance professionals, attorneys, medical case managers, professional employer organizations (employee leasing), temporary staffing, mediators, and medical office administrators. Ancillary sessions will be held on the Social Security Act, the Longshore and Harbor Workers Compensation Act, the Jones Act, the Defense Base Act, the OSHA 10-Hour General Industry Course, the Affordable Care Act and Medicare, and the new, recently passed, SMART Act, with specific emphasis on their effect on workers’ compensation.

New This Year:

2013 represents a significant change in the Conference, a change that saw the creation of a new interactive website and social media emphasis with a full-time online communications office and an emphasis on workers’ compensation and safety on a National scale - www.wci360.com. This year, significant expansions have been made in the Risk Management program to include prominent speakers from throughout the country, with this breakout being extended for a full 8-hours of presentations.

Safety:

This is the 25th anniversary of the existence of the Safety & Health Conference. Originally created as a stand-alone “Governor’s Conference on Safety,” the Safety & Health Institute partnered with the Workers’ Compensation Institute to establish a comprehensive national safety and health conference. In conjunction with NIOSH, CDC, and sponsoring Universities, these educational offerings provide reasonably priced, comprehensive educational opportunities for front line safety professionals. In addition to the usual breakouts on safety, a 10-hour General Industry course will be presented. An OSHA completion card will be issued to those who complete the full 10 hours of instruction. Registration for this special course offering is required. Refer to form to register.

Medicare Secondary Payer Act and Supplemental Security Income/Medicaid:

This year’s conference features an all-day breakout on the Medicare Secondary Payer Act and related subjects. One of the most difficult areas to deal with in handling workers’ compensation and general liability matters in the current environment is understanding and dealing with the serious pitfalls that this expanding law presents.  

Entertainment:

Entertainment for this year’s conference is “Styx.” They are downstairs rocking as your editor is writing this KCB&A Law Update! Starting in Chicago in the early 70s, the group has become one of the U.S. top rock acts due to such big hit singles as “Lady,” “Come Sail Away,” “Renegade,” “Blue Collar Man,” “Fooling Yourself,” and “Too Much Time on my Hands.” Styx continues to conquer the planet, one venue at a time.

It has been hot and muggy and the golf greens are holding the best shots. Mark your calendars for next year’s Florida WC Shindig!

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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