11-26-13; Goodbye Doug Whitley, You Will Be Sorely Missed; Shawn Biery on New GL Settlement Law; Ellen Keefe-Garner about Work Fatality Stats and much more

Synopsis: Illinois Business to Lose Doug Whitley, Its Long-time Workers’ Compensation Legislative Guru and Guardian Angel. We thank him for his hard work, humor and intelligence and wish him all the best in his next venture.

 

Editor’s comment: We are truly going to miss the top leader for Illinois business in one of the gloomiest states to do business in the United States. Last week, Doug Whitley, president of the Illinois State Chamber of Commerce, announced he plans to retire in June 2014. Whitley, now 63, became president in September 2001 which had to be one of the odder months to start a job, as our nation was in the midst of recovering from one of the worst attacks on U.S. soil in our history.

 

During his great tenure, the State Chamber has stridently represented IL business interests including two sweeping workers’ compensation reforms. Doug and his team also helped to defeat a gross receipts tax. He founded and co-chaired the Transportation for Illinois Coalition which advocated infrastructure investment. Doug has fought for fiscal integrity in our always-bankrupt IL State government that just bought giant copper doors for the State Capitol but can’t timely pay billions in overdue government bills. Doug also worked to draft and support legislation to bring long-term solvency to Illinois impossibly underfunded government employee pension systems that borrows and pays more to retired government workers than it pays to active state workers.


Doug entered his position at the IL State Chamber during one of the more tumultuous times in our State’s sordid political history. When Doug got the position in 2001, former Governor George Ryan was under a cloud of indictments. George Ryan had 76 different staff members eventually convicted of crimes and was then convicted himself. Out of the ashes of George Ryan’s repugnant legacy rose Crooked Rod Blagojevich who falsely promised to “clean up Springfield” and was tried twice and convicted once and will be enjoying the cuisine in federal prison until at least 2024.

 

Few people remember Crooked Blago “sold” the Illinois Workers’ Compensation Commission to win his first gubernatorial primary in 2002. As we stroll down memory lane, you might remember Blago was in a tight three-way primary in 2002. He went to Southern IL and made a deal with the folks in Metro-East to get political support by promising control of the good ole Illinois “Industrial Commission” to those politicians. When the election was over, the Commission’s name was quietly and rapidly changed at the whim of the new administration to “Workers’ Compensation Commission.” IWCC Funding was switched from our state general revenue fund to a levy solely on IL Business—the Commission’s budget tripled and, in our view, remains very high right now. Lots of new Arbitrators, including many former Petitioner attorneys were appointed; awards went up, goofy pro-Petitioner legal theories abounded. IL WC premiums/costs went from 24th to 4th highest in about six years. The Commission’s own 2012 Annual Report indicates from 2006-2010, IL WC benefits grew over four times the rate of other states.

 

In the middle of all that craziness, Doug Whitley quietly, smoothly and strongly kept working for the interests of IL Business. Doug and his team toiled behind the scenes and out front of the public and legislature to make lots of needed and effective changes. Illinois WC has changed a lot and changed for the better under his quiet aegis. The defense team at Keefe, Campbell, Biery & Associates worked with him and his IL State Chamber Employer’s Law Council to provide training and news of WC trends and changes to IL WC law. KCB&A has provided IL WC training, consultation and webinars for IL State Chamber members for many years. If you are interested in such training, send a reply.

 

Doug Whitley worked to create and implement the 2005-6 Amendments to the IL WC Act that did have some effect in cutting costs. Much more important were the 2011 Amendments to the IL WC Act that brought:

 

      WC PPP’s to our state for the first time, cutting choice of medical care for companies smart enough to use the new networks;

      A significant cut to the Illinois Medical Fee Schedule, reducing medical reimbursements to 53% of billed amounts;

      Strengthened UR provisions, cutting overtreatment;

      For the first time, implemented Impairment Ratings to bring our generous permanency awards into line with other states;

      Strengthened WC Fraud provisions;

      Reinforced WC Alcohol-Drug Use defenses;

      Limited Wage Loss Differential Awards.

 

In the next nine months to the end of his tenure as President, we hope Doug Whitley will keep working to stop the wild and unprecedented expansion of coverage of the IL WC/OD Acts following the mildly misleading “Traveling Employee” court-created legal concept that provides generous IL WC/OD benefits for workers who aren’t on the clock or at work or even near work when injured or ill. Illinois now has two parallel systems for workers’ compensation and occupational disease and this new model is going to be very, very expensive for business and government. We don’t feel the “Traveling Employee” expansion to cover non-work-related injuries is sustainable—it is a cancer on IL business that is certain to drive whole industries out of our state, as these increased WC/OD costs land. If you aren’t sure how, send a reply.

 

Doug and his legislative team are uniquely positioned to let State Government, the City of Chicago and all Illinois governments understand how this crazy enlargement will triple or quadruple their WC costs and put greater pressure on budgets and will rapidly cause taxes to rise. We hope Doug Whitley gets the message out to all his members and keeps on doing the great work he has done for the last dozen years. From all the partners and associates at KCB&A, we thank him one more time. If you know anyone interested in taking over his position in the eye of the IL State Chamber hurricane, go to their website for more information at www.ilchamber.org.

 

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

 

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Synopsis: Forewarned is forearmed. IL GL/EPLI adjusters and risk managers need to exercise triple caution in “creating” and paying settlements in a  timely manner to avoid penalties and interest in Illinois. Analysis by Shawn R. Biery, J.D., M.S.C.C.

 

Editor’s comment: Governor Quinn signed a new law which takes effect January 1, 2014 which is designed to expedite payment of settlement funds to plaintiff attorneys and contains language which is going to lead to increased penalty issues for the uninformed and slow-to-pay adjusters, risk managers and defendants.

 

This law does not apply to typical IL WC settlements that have to be approved by the Arbitrators/Commissioners and have their own IWCC rules. It may apply to IL WC settlements that are intertwined with general liability settlements—if you aren’t sure, send a reply to sbiery@keefe-law.com and we will get you a rapid answer.

 

Public Act 98-548 creates a new "Part 23" of the Civil Practice Law in the Illinois Code of Civil Procedure which will be titled "Settlement of claims; payment" (735 ILCS 5/2-2301). This new law essentially amends the Code of Civil Procedure to create an enforcement mechanism for cases in which the parties agree to settle, but Defendant or its adjuster won’t comply with the agreement. It appears limited to cases seeking money damages involving personal injury, wrongful death, or tort action and will require a settling defendant to pay all sums due within 30 days of tender of all applicable documents required under this new section. It will also require a “settling defendant” to tender a release to the plaintiff within 14 days of written confirmation of the settlement. 

 

BE AWARE—this means if plaintiff attorney sends a confirmation agreeing to settlement in any written form (fax-email included), 14 days starts to run to send them the applicable documents and once those documents are sent, you have to have payments issued within 30 days of the tender of those documents. We are cautioning all of our clients and readers—if you discuss settlement in any fashion with opposing counsel and don’t reach agreement, you may want to consider sending an email or fax confirming you didn’t reach an agreement to cover you from OC unilaterally sending a confirmation of settlement letter and causing issues and litigation you won’t want.

 

There is one caveat for cases needing court approval, such as a settlement involving a minor or an estate--If the law requires court approval of a settlement, Plaintiff must tender to Defendant a copy of the court order approving the settlement.

 

If there is a known third-party right of recovery or subrogation interest, Plaintiff may protect the third party’s right of recovery or subrogation interest by tendering to Defendant:

 

(1) A signed release of the attorney’s lien; and

(2) A letter from the plaintiff’s attorney agreeing to hold the full amount of the claimed lien in the plaintiff’s attorney's client-fund account pending final resolution of lien amount; or

(a) A signed release of the healthcare-provider lien or documentation of the agreement between the plaintiff and Medicare or private health insurance company as to the amount of the settlement that will be accepted in satisfaction of the right of recovery; or

(b) An offer that defendant will hold the full amount of the claimed right to recovery pending a final resolution of the right to recovery; or

(c) Documentation of any other resolution of the liens as agreed to by the parties.

 

If the court finds, after a hearing, that payment has not been made within 30 days of tender of the necessary documents, judgment must be entered against that defendant for the amount in the executed release, costs incurred in obtaining the judgment, and 9 percent interest from the date of Plaintiff’s tender.

 

Ironically, one of the slowest payers in the state, the State itself is exempt as the new law exempts units of local government, the State of Illinois, and state employees. The new law will make it more difficult to achieve Medicare Secondary Payer compliance as well unless the terms are very clear about when payment would be made for such issues. For that reason, it appears a number of insurance and industry groups objected to the new law.

 

The law is triggered when a “settlement” occurs as noted above so it will be very important for defense attorneys and adjusters alike to exercise caution in all writings (e-mail, letters, notes, faxes, etc.) so as to not trigger a “settlement” unless all terms are clearly laid out as conditions precedent including any hold back on potential Medicare funds. Our usual advice for any conditional payment is to agree to resolve conditional payments to Medicare directly, since providing the conditional payment amount direct to plaintiff/petitioner does not protect from Medicare seeking payment directly if not paid.  So the settlement will need to be very clear or you may end up double paying and paying with interest. The law requires the defendant to pay the settlement amount to plaintiff attorney within 30 days, if plaintiff attorney includes a letter that he or she agrees to hold the money in their trust account until the conditional payments are resolved.

 

With regard to Medicare, defendants will still be  required to electronically report to Medicare pursuant to 42 U.S.C. §1395y(b)(8) and this will lead to issues if defendant is unclear as to how plaintiff has or will resolve the conditional payment (again—a bad idea to leave it up to them rather than agreeing to directly reimburse after Medicare identifies the amount due) and the data submitted by defendant may differ and result in gaps between what was reported by the defendant and the information submitted by plaintiff attorney which could toll the Medicare statute of limitations.

 

We suggest agreement to resolve conditional payments directly and proactive identification of conditional payments owed Medicare if possible. Proper prior planning will prevent having to allow the plaintiff attorney to simply hold the money in his or her trust account, as the law does allow the defendant to hold back the funds at the offer of the plaintiff attorney or agreement of the parties.

 

As always, if you have any questions about successful resolution of your claims or the impact of Medicare on your claims, you can contact our office. This article was researched and written by Shawn R. Biery, J.D., M.S.C.C. and you can reach him at sbiery@keefe-law.com.

 

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Synopsis: Workplace Fatality Statistics Show Promising Trend. Analysis by Ellen Keefe-Garner, J.D., R.N.

 

Editor’s comment: There is good news and bad news in the workplace these days. On the good side, the Bureau of Labor Statistics, U.S. Department of Labor has reported fewer work place deaths in 2012 with the numbers falling from a 2011 high of 4,693 to a lower number of workplace deaths in 2012 of 4,383. However, the bad news is the Bureau also reported the first increase in construction workplace fatalities since 2006.

 

Dying is as inevitable as breathing. However, no one wants to die in a terrible accident at work. Unfortunately, death while working at a construction site usually follows from a disaster or mistake. In such cases, the worker does not slip away into the after-life peacefully. Instead, work-related deaths are frequently the result of a fatal traffic accident, a violent encounter in the workplace, or a harrowing fall. 

 

Last week, the Bureau of Labor Statistics issued a preliminary report indicating a total of 4,383 fatal workplace injuries were reported in the U.S. in 2012. This number represents a decrease in the number of workplace deaths since 2011. In fact, the 2012 total is the second lowest since such totals were first reported in 1992. Despite the overall decrease in fatal workplace injuries, the number of such deaths has increased by 5% in the private construction sector, with the number of such deaths in 2012, 775, representing an increase of 37 from the number of such deaths in 2011, 738. This increase in the number of fatal occupational injuries in private construction marked a deviation in the trend of declining annual rates of death in private construction during each of the five previous years, from 2007 to 2011.

 

So who is dying? The data shows some differences in deaths among various races. Fewer deaths of white and Hispanic construction workers were reported than deaths of blacks and Asians working in the same occupation. In addition, younger workers fared worse than older ones, with the number of deaths of workers who were 16 and younger nearly doubling, from only 10 such deaths in 2011 to 19 such deaths in 2012. In contrast, the deaths of construction workers age 55 and older declined for the second straight year. 

 

The manner of death was also studied. Transportation injuries were a frequent cause of death and accounted for 2 out of every 5 fatal work injuries in 2012. Out of the total of 1,789 transportation deaths, 58% of those were roadway incidents involving motorized vehicles. Non-roadway incidents with motorized vehicles like tractors accounted for another 13% of the transportation-related deaths. Another 16% of the transportation-related injuries involved pedestrians who were struck by motorized vehicles. Fatal injuries involving airplanes, on the other hand, declined in 2012 by 14%.

 

Some of the workplace deaths were related to violence--with both suicides and homicides being reported. Altogether 767 workers died in violent encounters with people or animals, including 463 homicides and 225 suicides. Shootings were the most frequent manner of death in both suicides and homicides. Of the 338 fatal workplace injuries involving female workers, 29% involved homicides.

 

In 2012, a total of 668 workers died in slips, trips and falls. Falls, which totaled 544, accounted for 81% of such deaths. Strangely, the height of the fall did not have to be great, with about one in four fatal falls occurring from a height of 10 feet or less.

 

Sixteen percent of the deaths in 2012 occurred after workers came into contact with equipment or objects on the work site. The number of workers who died after being struck by equipment increased by 7% from 476 in 2011 to 509 in 2012. This number includes 233 workers who died after being struck by falling equipment and 199 workers who died after being struck by powered equipment or vehicles. Only 3% of the workers died in explosions, and another 7% died from exposure to toxic chemicals. 

 

The industries in which the deaths occurred were also studied. The industries with the greatest number of deaths included construction, transportation and agriculture. These industries were followed closely by a large number of reported deaths in government, professional/business and manufacturing.  The fewest number of deaths were reported in the industries of financial activities, information and utilities. 

 

Occupations were also considered. Fatal work injuries in construction rose for the second year in a row, with a 5% increase from 2011 to 2012.  In 2012, some of the occupations with high fatality rates included logging workers, fishing workers and drivers (including truck drivers).  Fatal injuries to those working in management declined by 8% to 429. This decline was related to a 19% decrease in fatal injuries to farmers, ranchers, and other agricultural managers from 268 in 2011 to 216 in 212. 

 

Where are the deaths occurring? The state with the highest number of workplace deaths was Texas, with 433 deaths in 2011 and 531 in 2012.  Three other states reported a high incidence of fatal workplace accidents, though at a declining rate, in 2012, with California trending downward from 390 in 2011 to 339 in 2012, Florida declining from 226 in 2011 to 209 in 2012, and New York dropping below 200 deaths from 206 in 2011 to 196 in 2012.  Illinois reported 145 workplace deaths in 2012, marking a drop from 177 in 2011. 

 

Of course, whenever a fatal injury occurs at work, many factors need to be considered in determining the cause of death. If the family of a deceased worker brings a workers' compensation claim, the incident leading to the worker's demise will need to be very thoroughly investigated and evaluated.

 

This article was researched and written by Ellen Keefe-Garner, J.D., R.N. who is a licensed attorney and nurse. Please feel free to contact or reply to Ellen at EMKeefe@keefe-law.com.

 

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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 asap.
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 th

11-26-13; Shocking Statement From IL App. Court--IL WC Now Has Two WC Systems; Solid Rule-Making on Repackaged Drugs; Insurer to Pay Defense Costs in "Groundless" Claim and much more

Synopsis: Shocking Words in a “Traveling Employee” Semi-Secret Ruling for the Illinois-You-Don’t-Have-To-Be-At-Work-To-Get-Workers’-Compensation Commission. Is Illinois Really Going to Have One WC Act for Some Workers and Another Act for Whatever Traveling Employees Are?

 

Editor’s comment: We join with the Chicago Tribune editorial team when they ask In Illinois, it's 'Where's the Labor?' DayTheir editorial is online at http://www.chicagotribune.com/news/opinion/editorials/ct-edit-laborday-20130902,0,7810420.story

 

The Chicago Tribune editorial points to the five border states and confirm they have an average unemployment rate of 7.12 percent. In contrast, Illinois is looming at just under 10 percent with everything pointing towards our state soon reaching all-time record high unemployment. Unlike our neighbors across the country, Illinois raised personal and corporate income taxes just as other states cut their tax burden. To pay for government workers who are retired and no longer work for their respective governments but still get paid, Illinois borrowed and spent its way into massive government debt.

 

It is hard to imagine any national or international employer that doesn't know Illinois has worst-in-the-nation credit ratings and multi-billion dollar unfunded pension obligations? Many Illinois political leaders don't openly welcome employers and foolishly dictate terms to companies like Wal-Mart and Ford Motor Co. who might otherwise bring jobs here. Having looked at those issues, we now see this new anti-jobs WC “parallel universe” that is certain to further infuriate longstanding business people across our country.

 

The Chicago Tribune editorial team clearly doesn’t know what is happening in our reviewing courts and the IL WC system. We received a comment from an influential Plaintiff/Petitioner attorney in response to earlier KCB&A Updates about the new “traveling employee” concept indicating ITLA or the Illinois Trial Lawyers Association not having much influence before the IL legislature to the extent they were unable to block legislative amendments like impairment ratings in the last IL WC Amendments in 2011. The implementation of impairment ratings has caused permanency awards to drop and the bankrolls/fees of ITLA members to go down. All of the hard work from the 2005-6 and 2011 IL WC Amendments were causing costs to be more reasonable. But that is soon ending, folks.

 

In our view, where the IL Trial Lawyers Association may have limited sway in the legislature, they have strong influence in the reviewing courts. We truly feel they are the behind-the-scenes force on this new anti-jobs WC duality and coverage expansion. If you don’t know, along with massive government debt and unfunded pension chaos, the five men who compose the IL WC Appellate Court, Workers’ Compensation Division have moved to a new WC standard where most Illinois workers don’t have to be working or anywhere near work to be entitled to our generous workers’ compensation coverage. In our view, the most shocking statement we have read as WC lawyers is the Court’s willingness to completely ignore or “not address” the IL WC Act in making rulings. In another of those controversial “unpublished” rulings under IL Supreme Court Rule 23 that only appear on the IL Appellate Court’s website, we read the ruling in Admiral Mechanical Services v. Illinois Worker’s Compensation Commission, No. 02-12-0694WC, filed May 31, 2013. In that ruling, this language indicates:

 

Respondent next argues that, using a traditional analysis, claimant’s injuries neither arise out of or occurred in the course of his employment. See Illinois Bell Telephone Co. v. Industrial Comm’n, 131 Ill. 2d 478, 483 (1989). However, we have determined that claimant was a traveling employee. Therefore, we need not address these arguments.

 

What we find shocking and unprecedented about the language in this ruling is the clear indication from our penultimate reviewing court they don’t have to follow or, in their words, “address” the mandatory statutory WC coverage language given them by the legislature. Most legal scholars state the IL legislature provides the enabling law for the IL WC Commission and our courts to review and enforce—in this simple statement, this Illinois court has made it clear they are not limited by nor do they even have to address the statutory coverage scheme and are free to create their own laws and rules. In so doing, we have new and impossible-to-ascertain court-created definitions of things like “traveling employee” and “street risk” and “reasonable and foreseeable” activity. As we indicate above, this new theory creates a dual WC system. What we feel the bottom line is IL Plaintiffs get money in ways no other state provides and jobs are certain to suffer as this judicial trend continues to grow and take hold. We are certain lots of trucking/construction/staffing and other companies with this Court’s definition of “travelers” are going to seriously consider moving out of our state due to this confusion along with added WC/OD coverage and certain-to-increase insurance premiums/costs.

 

In Admiral Mechanical Services, claimant was an HVAC worker who was going to drive from his home to a place where he was going to work. He was in a car wreck miles and miles away from his eventual workplace. It is a classic “going to and coming from” ruling and, since he wasn’t working and wasn’t yet on the clock, our sister states and every state/country that we know of doesn’t provide WC benefits, as the worker picks the place you put their home, picks their route to and from work and spends what they need to get to work. When the worker arrives at the job site, the traditional law confirmed they are then covered under WC. Seems simple, doesn’t it?

 

Why Do We Feel this New Judicial Creation is a Disaster for Jobs and Labor in our State?

 

Well, the “traveling employee” concept means IL business is now covering folks on the way to work, on breaks, at lunch, on the way home for just about anything that befalls them. The admission by this court confirming in this somewhat hidden “traveling employee” ruling that “arising out of and in the course of” no longer has to be addressed by our Commission and reviewing courts “reverses” hundreds, if not thousands of prior IL WC judicial rulings. For one example, in the Caterpillar Tractor v. IIC ruling, our Supreme Court denied benefits for an off-work worker on his way to his car who tripped on a typical street curb. The Court majority found Claimant had “no increased risk” from that of the public in crossing a typical street curb and outlined that as the basis for denial. Now, if the worker was a “traveling employee” under about six different bewildering court-created definitions of the new term, he would have received benefits, as tripping on street curb is reasonable and foreseeable.

 

Almost all traditional WC defenses are now stripped away to allow compensation for millions of workers.

 

·         AOO/ICO is the biggest IL WC accident defense and this ruling now tosses that on the rocks and says the IWCC and courts can now ignore it or not “address” it.

·         Horseplay is no longer a defense for traveling employees—for example, two Illinois firefighters got into a school-boy wrestling match, as they were found to be “traveling employees” benefits were awarded. Horseplay was stripped out by our courts as a defense to this personal risk.

·         Idiopathic conditions that are somehow “reasonable and foreseeable” are compensable and this defense is now ended for such workers.

·         Fights—the “Aggressor” rule is no longer a defense for “reasonable and foreseeable” fights.

·         Intentional injuries to self/suicide would covered when “reasonable/foreseeable.”

·         Alcohol/drug abuse causing or contributing to injury is no longer a defense for the intrepid “traveling worker.”

·         Safety violations—probably gone for intrepid “travelers” with jobs.

·         Fall-downs without proof of increased risk—Mlynarczyk claimant received compensation without having to prove an increased risk; this defense is gone for all “travelers.”

 

In effect, we now have two different IL WC/OD Acts—there is the traditional IL WC Act for some workers and the new “hybrid” Act that wildly expands coverage for benefits.

 

When should IL Business, the Defense Bar and the IWCC Take Action to Address This New and Unprecedented Uber-Concept?

 

What do we mean the IWCC has to take action? Well, the IWCC hearing, decision forms and handbook all continue to remain in the traditional mode—like the IL WC Act, the term “traveling employee” isn’t mentioned anywhere in IWCC documentation but now should be. After jurisdiction and coverage of the Act, the “traveling employee” finding is the single most important thing in determining when WC/OD coverage would immediately apply. There are now four Appellate Court rulings that adhere to it--isn’t it kind of odd it isn’t mentioned anywhere at the IWCC? Maybe a news flash?

 

From the perspective of the defense bar, right now, we think our competition is ignoring it and hoping (as we do) that it will go away. Please also note for hundreds of so-called “traveling workers,” you may not need defense attorneys in the future and should do what you can to keep “traveling employees” away from Petitioner’s/Plaintiff’s lawyers—it is going to be very, very hard to win claims involving anyone who is first found to be a “traveling employee.” The IWCC may turn into one big “pro se” settlement place. If your defense attorneys aren’t telling you what has happened to IL WC/OD law, we are certain they aren’t fully advising you.

 

What should IL Business do? Well, we join with all of our friends and colleagues to hope and pray the IL Supreme Court hasn’t already made their minds up on this one. We hope this fall or early next year, we will see a favorable ruling on the Venture-Newberg-Perini claim that doesn’t throw the whole IL WC/OD system that has been in place for 104 years down the tubes. Like higher taxes and pension debt and unpaid government bills, this new WC/OD legal mess and lasting uncertainty can’t be good for jobs and IL labor.

 

Does the Media Know about This? Does the Legislature?

 

In our view, everyone is confused by the term “traveling employee” and thinks there is some sort of hubbub about people who are traveling abroad and getting hurt. We again point out Claimant in Venture-Newberg-Perini would have gotten benefits if he had a bad dream and rolled out of bed and broken his harm. He was an hourly worker that was not on the clock, not being paid to travel and was at least 20 miles away from the worksite when injured; he has been awarded over $1M in benefits currently pending on a final appeal before the IL Supreme Court.

 

We feel the IL legislature isn’t yet aware of all of it due to the pension fights that are raging across our state. They may take this issue up when that settles down. If the Supreme Court doesn’t flip Venture-Newberg-Perini, we hope the legislature returns our state to the traditional WC/OD format.

 

We don’t think the Chicago Tribune or Crain’s Chicago Business or WorkCompCentral or the various TV stations across our state know about the new dual system for IL WC/OD benefits. Feel free to send this article to them or provide your own thoughts and comments to us and the media. Please!!

 

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Synopsis: Finally! The IWCC implements new “combo-drug” price-fixing rules, bringing some sanity back to the world of IL WC/OD medication pricing. We applaud all those involved for a rare instance of rapid and reasonable reform in Illinois.

 

Editor’s comment: We have previously advised you of the egregious practice of “repackaging” medication and selling it out of a doctor’s office. As discussed in previous law updates, the 2011 Amendments to the IL WC Act had this tiny provision snuck into the legislation that was unassuming and innocuous, however it ended up potentially costing Illinois business millions of dollars. The provision has at long last been modified.

 

Repackaging drugs is a process by which a pharmaceutical shop essentially comes in and sets up a dispensary in a doctor’s office. They will take a 10 cent medication, put it in a new bag, and slap a 75 cent price tag on it, then have the doctors hand out the medication at that price at patient visits. Meanwhile, the outside vendor will issue charges to the payor without complicating the doctor’s practice. It is a clear price gouge, but unfortunately the practice was written into law by unwitting or uncaring politicians.

 

The proposed rules were published in the Aug. 17 issue of the Illinois Register, and according to the IWCC website, they took effect as of November 20, 2012. The amendment that took effect reads as follows:

 

If a prescription has been repackaged, the Average Wholesale Price used to determine the maximum reimbursement shall be the Average Wholesale Price for the underlying drug product, as identified by its National Drug Code from the original labeler.

 

What this does is essentially eliminate the increase in price that could have been created by the repackaging process. We applaud our legislators and the Commission for recognizing a problem, and moving rapidly to resolve it in a very reasonable manner.

 

Per the IWCC website notification, the final text of the rule will be published in the December 7, 2013 edition of the Illinois Register. This article was researched and written by Arik D. Hetue, J. D. who can be reached for question or comment at ahetue@keefe-law.com.

 

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Synopsis: The Seventh Circuit Court of Appeals rules an excess insurer must pay an employer’s defense and settlement costs consistent with broad terms used in policy, even though the underlying lawsuit was “groundless.” Analysis by Chris St. Peter, J.D.

Editor’s comment: We feel the Federal Seventh Circuit Court of Appeals correctly took an insurer to task and required coverage consistent with the broad terms of the policy at issue. Any other result would allow an insurer to dispute coverage based upon an exception that does not exist in the plain language of the policy itself.      

 

In TKK USA, Inc. v. Safety National Casualty Co., Nos. 12?1988 and 12?2091 (7th Cir. Aug. 21, 2013), Safety National Casualty Corporation sold an excess liability insurance coverage policy to TKK USA, Inc., (formerly known as The Thermos Company). The policy covered excess losses resulting from liability imposed on TKK “by the Workers’ Compensation or Employers’ Liability Laws” of Illinois. The dispute centered on whether the policy covered TKK’s costs to defend and settle a “groundless” lawsuit brought under Illinois common law by the widow of a former TKK employee alleging TKK’s negligence caused the employee to become ill with and eventually die from mesothelioma. The common law negligence claim was subject to a “rock?solid” affirmative defense under the Illinois Workers’ Occupational Diseases Act, which bars common law claims by or on behalf of an employee against a covered employer “on account of damage, disability or death caused or contributed to by any disease contracted or sustained in the course of the employment.” 820 Ill. Comp. Stat. 310/11.

 

TKK filed suit after Safety National denied TKK’s claim for coverage of losses above the policy floor. The U.S. District Court for the Northern District of Illinois granted summary judgment in favor of TKK for its costs in defending and settling the widow’s suit. The District Court found the policy’s reference to “Employers’ Liability Laws” included the widow’s negligence claim even if it ultimately could not prevail. The district court denied, however, TKK’s claim for attorney fees and costs in the coverage lawsuit itself.

 

In a decision issued August 21, 2013, the Seventh Circuit Court of Appeals affirmed the District Court’s decisions in all respects. The Seventh Circuit explained the key policy term—“Employers’ Liability Laws”—was broad enough to include claims brought under the common law, even if the claims are “wholly groundless, false, or fraudulent.” The Seventh Circuit also found no error in the district court denying plaintiff’s motion for attorney’s fees in the coverage lawsuit, holding Safety National took a reasonable position on an unsettled issue of law.

 

As noted above, we feel this is the correct result. The policy at issue broadly covered any losses incurred as a result of “Employers’ Liability Laws” with no exception based upon the type or merits of the claim. Where a policy uses such broad policy language, the insurer should not be able to dispute coverage by asserting an exception that does not exist in the policy itself. This should also remind our clients to pay close attention to the language used in an insurance or any other contract—if the language purports to provide unlimited coverage, it probably does.     

 

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.

11-26-13; When Will IL Have Its First WC Pregnancy?; Four Kinds of Drug/Alcohol Tests Compared; New Driving Laws for IL WC Participants and much more

Synopsis: When Will IL Have Our First WC Pregnancy? Can IL Possibly Extend Our Generous WC and OD Benefits to Folks Who Aren’t Working?

 

Editor’s comment: We were discussing the “Traveling Employee” Trilogy of controversial IL WC rulings in Venture-Newberg, Mlynarczyk and Kertis that IL Business observers feel is going to expand global, all-day, don’t-have-to-be-on-the-clock WC coverage to the unprecedented judicially created definition of “traveling employees” at a webinar last week. One of our participants asked “what do we mean by global coverage?” What we realized is this outlandish new legal concept is going to expand both WC or accident coverage to “traveling employees” along with OD or occupational disease coverage.

 

If you are aren’t sure, Illinois has two parallel acts to protect workers, the Illinois Workers’ Compensation Act and the Illinois Occupational Disease Act. The two legislative works are closely parallel and have minimal differences. If one is covered under the IL WC Act, you are similarly covered under the IL OD Act. Assuming the IL Supreme Court doesn’t get to consider and then flip these rulings, and Mlynarczyk wasn’t sent to the them and has already gone final and benefits have been paid, we are going to see the following scenario:

 

·         Traveling employee = now means anyone with a job who

 

o   Doesn’t work on the “premises of their employer” or

o   Anyone who works at the premises of their employer but occasionally travels to two or more “premises” a la Kertis or

o   Workers where “traveling” is an essential part of the job.

 

·         This new judicially created definition encompasses millions of IL workers who are now covered under WC/OD when off work. Please understand the three appellate rulings confirm “traveling” has nothing to do with the definition of “traveling employee” status. One becomes a “traveling employee” if you match one or more of the three definitions above per these three rulings. If you don’t understand this concept, please send a reply. If you are reading other IL WC publications that say a “traveling employee” injury was work-related due to travel status, we feel they aren’t being forthcoming and are propagating confusion.

 

·         WC/OD global all-day/all-night coverage of any risk, injury or illness may now exist in this state for any worker who attains “traveling employee” status = this means any “reasonable and foreseeable” activity or risk from the moment they leave their home until the moment they return home. For “at home” workers, we think they are arguably covered 24/7/365. This is going to provide IL business strong incentive to have their “at home” workers move out of our state or hire “at home” workers outside our state. If you aren’t sure why, send a reply.

 

·         Please note there was no question and it was wholly agreed by both sides Claimant Ronald Daugherty in Venture-Newberg and Claimant Stanislawa Mlynarczyk from the Mlynarczyk ruling were not on the clock, not being paid and not performing any work for their employers at the time of injury. They were on personal time and should have been at their own risk. The Court ruled WC/OD coverage for Claimant Ronald Daughtery was 24/7/365 for his entire trip to Cordova, IL and its surroundings; he would have been covered all day + all night whether working or not.

 

·         We assert the judicially created and blurring definition of “reasonable and foreseeable” activity/risk to cover about 99.9% of everything a human does—in short, “traveling employees” are globally covered for accidents/illnesses all day for all activities inside and outside their home.

 

·         Isn’t it a “reasonable and foreseeable” activity or risk to get a disease, any disease from the time you leave your home until you return?

 

·         Wouldn’t pregnancy, cancer, adult-onset diabetes, flu, common cold, menstrual cramps, HIV, heart disease, obesity (which is now a disease), liver failure, gall stones and you-name-it-disease-or-other-medical-condition all come from formerly personal but now all work-related risks associated with “reasonable and foreseeable” activity away from home for “traveling employees?” While we are cautious when characterizing pregnancy as an occupational illness—you have to admit pregnancy can cause a level of temporary disability from heavy jobs and it is a medical condition that would typically occur during personal time that our courts have now mystically made a part of “work.” Isn’t it going to become a little pricey to have to pay 100% of all medical care and lost time for hundreds of personal medical conditions? Who needs Obamacare in Illinois if you have a “traveling employee” job?

 

·         If every “traveling employee” is covered under the IL WC and OD Acts as a matter of law from the moment they leave their home to the moment they return at the end of the day, how hard will it be for a worker to claim “I must have caught the [insert disease] away from home because no one in my home has this condition.” How will anyone ever defend that claim?

 

·         Again, Claimant Mlynarczyk or anyone like her could have gone home for lunch and while on her own time had a romantic encounter and become pregnant. As there is no question our lower court has ruled she was a “traveling employee,” isn’t such conduct both “reasonable and foreseeable?” If she did so, would medical bills and time lost from work have been the responsibility of her employer? From the perspective of her employer and its insurer, how is that liability any different than her falling in her own driving and breaking her wrist on her own property and on her own time?

 

Is The “Traveling Employee” Concept Good For IL Employers?

 

In our view, it is an unmitigated disaster. For our readers who noted the IL WC advisory rates were again confusingly recommended to drop, we point to actual premiums and the State of Oregon every-other-year listing of U.S. WC premiums. From years 2004 to 2010, IL WC/OD premiums ascended from ranking number 24 in the U.S. in 2004 to number 3 by 2010. At the time, we didn’t include WC/OD coverage for millions of workers on personal time and risk. We do now.

 

Is that going to cause WC/OD premiums to spike? Well, try to remember the employer in Venture-Newberg wouldn’t owe Claimant Daugherty a penny in any other state in the United States—he never made it to work that day and was 20 miles away when injured! Right now, over $1M in medical bills are due and have been awarded by the lower court. No state that we are aware of provides global all day/all night WC/OD coverage for injuries and illnesses. If this claimant passes away from his injuries now or in the future, the value of the IL/WC death benefit is over $1.7M! All IL employers are now on the risk for any “traveling employee” for cigarette smokers who get lung and brain cancer—they are all going to claim they smoked at work and that it is a “reasonable and foreseeable” activity invoking this new OD coverage. It won’t be much of a jump for heart problems, lung dysfunction, liver, pancreatic concerns and lots of other diseases to all be covered under the wildly expanded IL WC/OD coverage. For anyone that passes from them, the death benefit runs from $600K-$1.7M. If you aren’t sure IL WC/OD rates are going to rise, we are certain, absolutely certain they are going to skyrocket. Please don’t shoot the messenger but we are certain of it. We are going to be the worst or highest state in the U.S. within three-four years. Illinois unemployment is over 9% and this isn’t a good sign for employers to start hiring in our state.

 

Is the “Traveling Employee” Concept Good for Lawyers on Both Sides and the IWCC?

 

As we have advised in the past, we also consider it an unmitigated disaster. Litigation isn’t going to be required for globally covered “traveling employees”—coverage for these risks, injuries and illnesses are automatic; the “Traveling Employee” Trilogy confirms WC/OD coverage is “as a matter of law.” Therefore all the worker has to do is demonstrate “traveling employee” status which shouldn’t be challenging. We are confident underwriters at all the major carriers will create a handy list of  workers with those positions and once they look at the list, WC/OD insurance adjusters are simply going to pay and pay and pay. The adjusters will tell the worker they don’t need and will only waste money to get a lawyer.

 

If WC/OD coverage is a lock and benefits are due and there is nothing to litigate, we won’t need the IWCC.

 

What Should We Do About It?

 

This is a great question we are asking you, our readers. Here are unedited thoughts as written in response to the question by one of our top clients:

 

All companies in the transportation business are now going to have accept responsibility for the employee from the point they leave their home to the point they return, regardless if they stop at a local bar on their way home, have a few, get into an accident, fall down and hit their head, get run over by another bar customer, all going to become our responsibility under w/c. Really? How do we control how an employee drives from home to work? What an employee eats, how they sleep, their employee’s extracurricular activities. They buy a cup of coffee on the way to work and spill it on themselves and are burned-workers’ comp? They get hit with a fly ball at their kid’s baseball game and didn’t go home first-workers’ comp? Do we need to now start controlling our employees’ lives outside of their working hours? Next they are going to make us pay them from the time they leave their house and back. Who makes this stuff up and who is thinking it through? Do they realize the implications? This state is driving employers out and this is going to make employers put the pedal down. 

 

Please remember in 2011, the IL legislature restated the requirement that injuries and illnesses “arise out of” and occur “in the course of” the employment. In our view, the IL reviewing courts are ignoring that simple requirement of WC/OD law. If you disagree, please understand there is no chance, literally none the unfortunate injuries suffered by Claimant Daugherty in Venture-Newberg were “in the course of”—all sides agree he was twenty miles away from work and wasn’t on the clock when the car crash occurred.

 

Our vote is to get a petition together or start writing letters to Governor Quinn, Speaker Madigan, Senate President Cullerton, Attorney General Lisa Madigan and IL Supreme Court Chief Justice Thomas Kilbride. We hope business leaders like Doug Oberhelman at Caterpillar and Doug Whitley at the IL State Chamber and David Vite of the IL Retail Merchants get engaged. We would love to hear Chairman Michael Latz and the IWCC itself make a stronger statement about their approach to this crisis that clearly will affect their jobs and their lives. If you don’t use KCB&A as your defense attorneys, please ask your IL WC defense lawyer for their thoughts, recommendations and actions to block this new legal concept.

 

The defense team at Keefe, Campbell, Biery & Associates seeks your thoughts, assistance and concerns in this legal crisis that threatens our system and our state. Please reply as you feel best. Please feel free to post comments on our award-winning blog. We thank our brilliant client/reader quoted above for her thoughts.

 

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Synopsis: Getting and Keeping Drugs and Alcohol Out of Your Workplace.

 

Editor’s comment: After our recent article about medical marijuana becoming somewhat legal, we have had a lot of readers inquire about drug and alcohol testing and wanted to provide additional thoughts for your consideration.

 

Employers can test in

 

A.   Pre-employment,

B.   Random,

C.   Reasonable suspicion and

D.   Post-accident settings.

 

A.   Pre-employment testing is a great way to start your overall program and confirm for any job candidate that you are serious about safety and keeping your workplace drug and alcohol free.

 

In short order, pre-employment testing means all job applicants in a class of workers may be required to be screened for drug and alcohol use prior to being hired. Prospective employees may be tested for drugs or alcohol in the workplace.

 

The types of drug tests which show the presence of drugs or alcohol include urine drug tests, blood drug tests, hair drug tests, breath alcohol tests, saliva drug screen, and sweat drug screen. Hiring should be contingent upon passing pre-employment drug and alcohol tests and screenings. Drug testing laws vary by state. In some cases, the law requires drug testing. For example, industries regulated by U.S. Government may be covered by federal or state drug testing requirements.

 

Breath alcohol testing devices or breathalyzers measure how much alcohol is currently in the blood. Blood alcohol tests show current levels of impairment or intoxication; they do not show past use. A blood drug test may be used when job applicants or employees are screened for illegal drugs. A blood test measures alcohol or drugs in the blood at the time the blood is drawn. Drugs screened for in a typical blood test for employment purposes include amphetamines, cocaine, marijuana, methamphetamines, opiates, nicotine, and alcohol. A hair drug test provides a 90-day window of drug use. It doesn’t indicate current impairment due to drugs, only past use. A hair drug test does not detect alcohol use. Hair can be tested for cocaine, marijuana, opiates, methamphetamine, and phencyclidine. A mouth swab drug test, also known as a saliva test or oral fluids test, collects saliva from inside the job applicant or employee's mouth. The saliva is tested for use of drugs during the previous few hours up to one to two days. Saliva is easy to collect and test, so this is the simplest and least invasive type of drug testing. A urine drug test is the most commonly used test when job applicants or employees are screened for illegal drugs or alcohol use. Urinalysis shows the presence of drug residues that remain in the body after the effects of the drug have worn off.

 

B.   Random testing is exactly that – systematic and random testing of existing workers.

 

One approach is all employee names from a class of workers are entered into a computer system and the computer selects those to be tested. The computer needs a unique identifier, such as an SSN or employee ID #, the frequency of testing (monthly, quarterly, etc), and the percentage of the employee population to test through the yearly program (25%, 50% etc). For DOT testing, the percentages are required and set by the operating administration regulating the employer, such as the FMCSA or FAA. For non-DOT testing, the employer has to make decisions regarding which employee categories to include in the random pool, the frequency of testing, and the percentage of the employees to be selected for testing. Computer generation of the folks to be selected is important so there is a system to produce unbiased random selections of personnel subject to drug and alcohol testing.

 

Simple random sampling without replacement is not usually used in random testing programs designed to deter or identify drug use. When an employee is subject to testing only once during the year, there may be no deterrent or no chance of identifying a drug user for the rest of the year. Most random drug testing programs use SRS or sampling with replacement; all employees in the pool are eligible for selection each time a selection is made. Employees may be chosen more than once in a year and sometimes in consecutive selection periods. This can be aggravating to employees who have already been selected previously and passed the drug test; however, it is necessary for true random testing designed to both deter illegal drug use and identify substance abusers. In our view, systematic and random testing can work if you want it to; it has proven to be an effective tool in reducing or eliminating substance abuse in the workplace. Once notified of being selected for a random test, an employee should immediately report for that test. Any delay takes the random part out of the equation and permits adulteration or substitution. What makes the test successful as a deterrent is the fact the employee does not know they have been selected until they are required to submit a specimen.

 

C.   Reasonable suspicion testing is conducted when a supervisor has reasonable cause to believe an employee may be impaired as a result of drug or alcohol use.

 

The supervisor's assessment and decision to test is based on personal observation of the employee's behavior. Supervisors should document in writing the behaviors that give rise to the suspicion the employee is impaired and/or under the influence of drugs and/or alcohol. For overall workplace safety, reasonable suspicion drug testing is a valuable aid if it is properly used and carefully documented. Training for determining reasonable suspicion of impairment and the process to refer an employee for a drug or alcohol test is readily available. Large employers have EAP programs that include access to this type of training; in addition, trainers can be brought in to provide this training. Smaller employers can take advantage of on-line or video training options. This issue revolves around the safety of the employee, their coworkers, customers, and the general public – it is not so much about the test itself. Without question, reasonable suspicion testing has probably the highest level of legal liability due to the initial decision by a supervisor on when to test or not test.

 

D.   Post-accident testing is also fairly simple to grasp.

 

Anyone who is involved in an accident is tested, either by the care providers at your request or by your team. It is important to remember if you test one employee in a post-accident setting, test all. If you don’t follow that rule, you are almost certain to get sued. The easiest way for test results to be obtained is to advise your PPP network providers to always test in post-accident settings and properly preserve the samples.

 

It is legally important to properly categorize a drug or alcohol test. If you need a sample drug and alcohol testing program, send a reply and we will forward it for free. If you need legal assistance in setting up a program, let us know. Please give us your thoughts and comments or post them on our award-winning blog.

 

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Synopsis: Driving in IL Has Changed—A Lot!!

 

Editor’s comment: While not truly a WC issue, we want our readers to know of the many changes, in case you are in or visit our state.

 

ü  No more phones to your ear!! Starting January 1, 2014, if you are driving and put a cell phone to your ear and get caught, it will result in fines of $75 to $150.

 

ü  Don’t use your cell phone and crash into anything! Another law increases penalties for drivers who cause an accident while using an electronic device to talk/text or email, including possible prison time. Current law only allows these drivers to be charged with traffic violations.

 

ü  Cellphones off around accidents! Can’t take pix, text or talk on a mobile phone while driving within 500 feet of an emergency scene, such as a traffic accident or responding firefighters or police. We have no idea what rocket scientist thought this one up or why it was passed but it is a law you should know about.

 

ü  No more hot rodding, sort of—A conviction of going 30mph over the limit on a highway and 25mph over the limit not on a highway will result in a sentence that cannot include court supervision. We assume this will mean more jail time or license suspensions.

 

ü  New access to past driving records--Sentencing for traffic offenses will now include real-time access to online databases for all states to allow judges to throw the book at us.

 

ü  Rural speed limits to go up to 70mph—Since everyone is already driving 80mph, it is nice to see the law catch up to the rest of us. Cook County and the collar counties can nix the increase if they want but all other counties are now at 70mph.


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