6-29-15; Gay Marriage as It Relates to Workers Comp; IL PPD Accrues and Due After Death of Petitioner, analysis by John Karis, JD; EEOC Hits UAL But Ignores Gov't Discrimination of Disabled Workers...

Synopsis: Whether You Like This Controversial Topic Or Not, You Need To Know the WC Rules on Gay Marriage for Your Risk Management/Claims Job.

Editor’s comment: Last Friday, SCOTUS effectively mandated gay marriage is here to stay in all 50 states. If you aren’t happy about it for religious or other reasons we understand but as adults we have to deal with what is in front of all of us. A clear effect of the U.S. Supreme Court’s decision legalizing gay marriage nationwide is same-sex couples can travel, vacation or reside out of state knowing their marriages will be recognized across our country. Illinois legislatively approved gay marriage in our state starting in 2014. Whatever the outcome, our highest court’s ruling was not expected to directly affect Illinois law since the case was focused on court judgments and not unions approved by a legislature, as in Illinois. The SCOTUS ruling means 14 other states will have to stop enforcing legislative or judicial bans on same-sex marriage, effectively “approving” or mandating recognition in all 50 states.

The freedom to reside elsewhere on either a temporary or permanent basis along with freedom to travel was among the things Illinois’ gay couples were celebrating after Friday’s decision. Here are other aspects of the ruling:

For Illinois and All of the United States, Gay Marriage Is Here To Stay

The Illinois General Assembly approved gay marriage in late 2013 with an effective date in 2014 and former Governor Quinn signed the bill. This made Illinois the 16th state to allow same-sex unions. Since the law took effect in June 2014, more than 10,400 same-sex couples have married in Illinois. Cook County Clerk David Orr says more than 7,500 marriage licenses have been issued in the Chicago area. The SCOTUS ruling effectively closes the door on any possibility our Legislature or Courts could one day reverse the law under a conservative regime.

The Rights Married Gay Couples Have In Illinois Will Travel With Them To Other States; The Rights Gay Couples Have From Marriages In Other States Will Follow Them Here

Prior to the U.S. Supreme Court decision, Illinois couples could still have faced issues in the remaining states which had bans on gay marriage. When relocating, a gay spouse could be denied workers’ compensation benefits deriving from their relationship. Now, it appears such concerns are gone and not coming back. One of the two parts of the U.S. Supreme Court’s decision specifically dealt with the cross-border issue, finding same-sex marriages “legal” in any state must be recognized by all states.

The other part of the SCOTUS ruling declared gay marriage bans in four states, Kentucky, Michigan, Ohio and Tennessee were unconstitutional, effectively making same-sex marriage fully legal throughout the United States. A gay marriage from any state is going to have to be accepted by the IL Workers’ Compensation Commission and the IL reviewing courts.

No One Knows What To Do With Civil Unions—Our Advice to Gay Couples is Keep It Simple and Get Married

Illinois created civil unions in 2011 as a precursor to gay marriage. The law on civil unions makes the partners in a civil union “spouses.” We are not sure if the surviving spouse in a civil union has to be legally treated as a widow or widower—we think so but it is hard to be certain. See this link from the Illinois Department of Insurance: http://insurance.illinois.gov/General/civilunions.asp We don’t know if the SCOTUS ruling is going to make civil unions a nationally protected legal status. We assume other states may or may not fight that issue and suggest marriage is the simplest way to clarify any concerns moving forward as we are sure the SCOTUS ruling protects marriage and leaves “civil unions” in limbo.

How Does Gay Marriage “Translate” Into IL WC Rights and Benefits?

Well, our research indicates the word ‘spouse’ is mentioned in the IL WC Act on five occasions. Gay couples married in Illinois or any state are now legally ‘spouses.’ Basically, the AWW, TTD and PPD rate calculations are impacted by marital status—if you aren’t sure how, please send a reply. A spouse who remarries can have death benefits cut to a lump sum payment of two years in the right circumstances. Other than those legal facets of the term, WC benefits are not dramatically changed.

The words ‘widow’ or ‘widower’ appear in the IL WC Act on 30 occasions. The surviving spouse of a gay marriage is now legally a ‘widow’ or ‘widower.’ The words widow/widower only appear in Section 7 of the Act which provides for death benefits due to work-related injuries or illnesses. The defense team at KCB&A unequivocally asserts it is our reasoned legal opinion gay couples who tragically lose a partner due to a work-related accident or illness will have the same rights and benefits as all couples moving forward. For claims handlers who aren’t fully aware of how to investigate, document and properly pay death benefits under Section 7, we recommend you contact our KCB&A defense team at no charge and we can greatly simplify all aspects of it. Please remember death benefits in Illinois can cost an employer or insurance carrier/TPA up to $1,770,327.00 right now—please note the numbers are going to go up this week and on July 15. On July 20, 2015, our law partner Shawn R. Biery, JD, MSCC will have a new updated IL WC rate sheet for our readers to document the expected benefit increases. Send Shawn an email if you want his new IL WC rate sheet when ready. Our point is for a widow or widower, gay or straight, you don’t want to get IL WC death benefits wrong, as there is too much at stake.

How Does Gay Marriage Affect WC Benefits in KCB&A’s Other Covered States/Offices in Indiana, Wisconsin, Iowa or Michigan?

If you have questions about WC benefits in Hoosier-land or Indiana, contact Kevin Boyle kboyle@keefe-law.com or Pankhuri Parti pparti@keefe-law.com. For issues in Cheeseland, ooops, we mean Wisconsin, contact Jim Egan at jegan@keefe-law.com or Matt Ignoffo at mignoffo@keefe-law.com. For Iowa claims and benefits, contact Dan Boddicker at dboddicker@keefe-law.com. For Michigan WC claims, contact Ellen Keefe-Garner at emkeefe@keefe-law.com. Or just send a reply.

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

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Synopsis: IL WC Appellate Court Rules Accrued PPD Benefits Are Due To An Injured Worker’s Estate. Thoughts and analysis by John A. Karis, J.D.

Editor’s comment: In Bell v. IWCC (issued May 1, 2015) our Workers’ Compensation Division of the Appellate Court of Illinois reversed the IWCC and sent a claim back for a calculation of PPD and an award due to the estate of an injured worker. The majority ruling explained the basis for allowing Claimant's estate to seek and obtain permanent partial disability (PPD) benefits accrued and would have been arguably due to Claimant-decedent prior to her death.

Quick Thoughts From Your Editor:

·         We are glad to see the Appellate Court, WC Division concedes the IL WC Act mandates IL PPD benefits “accrue” on a weekly basis—we note our activist reviewing courts don’t seem to follow that simple rule in

o   Greene Welding and Hardware v. IWCC where they changed traditional views of the IL WC Act to find amputation benefits magically, completely and instantaneously accrue in the minute where the employer or insurance carrier/TPA learns of bone loss—from an academic perspective, we don’t agree that is what the IL WC Act says;

o   We have no idea what weekly “accrual” of PPD means in the IL Supreme Court decision in Beelman Trucking v. IWCC where an injured employee is now allowed to get lifetime weekly statutory total and permanent disability benefits along with “doubled” weekly PPD benefits arising under Sections 8c, 8d or 8e at the same time. We assert the legislature intended lifetime benefits to be the sum of what an IL employer owes.

·         We also feel the outcome of this ruling is anti-business and agree with our great and now-deceased Arbitrator Neva Neal-Mundstock and the solid appellate ruling from the IWCC panel. What possible reason is there for permanent partial disability benefits to be paid to folks that aren’t married to, children of or in any way dependent on decedent? Why do accrued PPD benefits have to be paid to distant relatives or legatees eight years after the accident and a half-decade after the passing of the injured worker? It again feels like Illinois business always has to lose money by paying unneeded benefits in the WC system in this state. With respect to the august members of our Appellate Court, WC Division—they may be signaling to our legislature the need to change the IL WC Act and modify the statutory language to have it make more sense.

There is no question Claimant Nash filed an Application for Adjustment of Claim under the IL WC Act, seeking benefits for a fall-down injury sustained while working for Respondent. Prior to the arbitration hearing, Claimant Nash died of causes unrelated to her work accident. Ms. Nash’s sister and the administrator of her estate filed an amended Application, substituting Claimant Bell as the new party-petitioner. The new Claimant sought recovery of the PPD benefits accrued from the date Ms. Nash reached MMI until her death on August 19, 2010. The employer disputed Claimant’s right to recover such benefits, arguing any PPD benefits to which Claimant would have been entitled abated upon her death.

We are wholly unsure why the issue of accidental injury was stipulated to at hearing, as the burden of proof would have been on the new Claimant to prove an injury to decedent. This would have brought various evidentiary challenges which might have resulted in a compromise settlement. It is also difficult to understand how this simple fall-down claim would merit six years of litigation, at what will now be the fifth level of hearing or appeal—the defense legal fees might exceed the overall exposure.

After conducting the hearing, Arbitrator Neal awarded temporary total disability (TTD) benefits and medical expenses and found Claimant sustained permanent partial disability from her work injury. However, the arbitrator ruled any PPD benefits which accrued prior to the passing of decedent’s death abated with her death and declined to award any such PPD benefits to her estate. Arbitrator Neal noted the IL WC Act “allows dependents to recover from the economic loss caused by [Claimant’s] injury,” and concluded “[a]llowing [Ms. Nash’s] estate to collect permanency benefits, where she had no dependents, really serves no purpose.”

Claimant appealed Arbitrator Neal’s decision to the Illinois Workers’ Compensation Commission. The Commission unanimously affirmed and adopted her decision. Claimant then sought judicial review of the Commission’s decision in the Circuit Court of Coles County, which confirmed the Commission’s ruling.

This issue presented on appeal is whether the estate of an unmarried Claimant who dies without leaving any dependents may recover PPD benefits accrued prior to the employee’s death, or, alternatively, whether any claim to such benefits abates with the injured worker’s death.

The Appellate Court indicated the IL WC Commission erred in their interpretation of Section 8(e)(19) and Section 8(h). The Appellate Court noted these provisions merely establish to whom benefits will be paid if the employee dies with a spouse or dependents before they have been fully compensated for the work-related injury. The statute does not limit the ability of a deceased employee’s estate to collect accrued, unpaid benefits were due and owed to the employee while he/she was alive. Neither provision addresses what happens when an employee dies without leaving a surviving spouse or any surviving dependents, as in this case. Accordingly, neither provision should be read as barring an employee’s estate to collect accrued PPD benefits under such circumstances.

In our opinion the Appellate Court set the precedent to allow Claimant’s estate to inherit accrued PPD benefits owed. They sent the matter back to the IWCC to determine the amount due to the estate.

This article was researched and written by John Karis, J.D. You can reach John at jkaris@keefe-law.com. We appreciate thoughts/comments. Post them on our award-winning blog.

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Synopsis: What We HATE about IL State Gov’t, the City of Chicago and Some Local Gov’t Units—Unlike Private Sector Employers, Some Gov’ts Pay Endless TTD but Don’t Accommodate Injured Workers Into Open Positions.

Editor’s comment: We saw a recent headline where the federal EEOC took $1 Million from United Airlines to settle a disabled-workers suit. In 2013, the Supreme Court refused to reconsider a 7th U.S. Circuit Court of Appeals ruling in EEOC v. United Airlines Inc., which held reasonable accommodations under the Americans with Disabilities Act requires U.S. employers to reassign employees to vacant positions when the employee cannot be accommodated in his/her current position. The EEOC charged by requiring employees with disabilities to compete for vacant positions for which they were qualified, the company's practice frequently prevented disabled workers from continuing employment with the airline.

The EEOC said in a statement the airline will pay $1 million to a small class of former United employees with disabilities and make changes nationally, under a consent decree. United Airlines will revise its ADA reassignment policy, train employees with supervisory or human resource responsibilities regarding the policy changes, and provide reports to the EEOC regarding disabled employees who were denied a position as part of the ADA reassignment process, the EEOC said.

While many cost-conscious Illinois cities, school districts and others will follow this rule, we assure you IL State Government, the City of Chicago and some local governments continue to refuse to do so. The reason very few folks beef about it is the workers keep getting paid by taxpayers with TTD, TPD or generous disability pay for months and years. In some cases, workers are provided “odd lot” total and permanent disability benefits for life despite the unquestioned fact the workers could be placed, like UAL now has to place such workers, in other open positions.

What is sauce for the goose ought to be sauce for the gander—we ask the EEOC to stop attacking private industry while giving a pass to the public sector. You may note the State of IL and City of Chicago, along with the CTA and Chicago Public Schools have combined debt of over $150B. One of the reasons for that high debt is the endless payment to former workers who no longer work for taxpayers when they could be put to available work and save billions.

Does or Should this Ruling End Fake Police/Firefighter Pensions?

In Illinois, a police officer/firefighter only has to demonstrate they are restricted from their police or fire job to be entitled to a lifetime pension. In rulings like the 2014 Appellate decision in Pedersen, et. als. v. Village of Hoffman Estates, the municipality owes lifetime line of duty disability pension benefits and lifetime family medical coverage for a man with moderate hearing loss due to an accidental siren which caused hearing loss. We assure our readers Plaintiff Pedersen isn’t deaf; he needs hearing aids to function normally. With respect to him and agreeing he has a disability requiring accommodation, we don’t consider that a life-disabling and catastrophic condition. This man can and should be working somewhere where hearing aids could allow him to safely be a building inspector or perform another available municipal job. If you go to the Village of Hoffman Estates website, you will note this year they filled Administrative Staff Assistant and Front Desk Customer Service Rep positions—Mr. Pedersen can safely do such jobs with hearing aids.

Hundreds of “not-so-disabled” police and firefighters across our state could be brought back to other available municipal jobs, as this EEOC ruling and settlement dramatically requires. If that happens, workers like Mr. Pedersen and others would not be put on our dole to receive lifetime line-of-duty disability pensions with taxpayer-funded family healthcare benefits which cost IL taxpayers billions. Current workers already on line-of-duty disability pensions should be taken off the fake pensions and returned to other available work. They can and should do lots of other available municipal jobs with reasonable accommodation. Trust us, the police officers and firefighters getting the pensions aren’t going to complain when they are getting thousands of our tax dollars without having to work—someone has to complain about it for taxpayers. We truly feel the General Assembly should investigate, hold hearings and consider legislation over this issue.

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

Staffing Company Risk Manager Alert! by Joe D'Amato, JD; IL WC Rules on Staffing Companies/Employees; Colo. Marijuana Ruling and What It Means to You and more

Synopsis: Staffing Company Risk Manager ALERT!—National Staffing Company Agrees to Implement Major Company-Wide Changes Following OSHA Beef, analysis by Joe D’Amato, J.D.

Editor’s Comment: The defense team at KCB&A has a number of WC/EPLI/GL Staffing Company legal specialists, including our law partner and defense team leader, Joe D’Amato. Joe confirms legal issues for staffing organizations have unique challenges for risk and safety managers. This new action and eventual agreement by OSHA is a must-read for anyone who uses staffers or handles risk in that growing industry.

In 2013, OSHA announced an initiative to improve workplace safety and health for temporary or staffing workers, who are at increased risk of work-related injury and illness. The initiative included outreach, training and enforcement to ensure temporary workers are protected in the U.S. workplace. OSHA and the National Institute for Occupational Safety and Health or NIOSH have issued a "Recommended Practices*" publication that focuses on insuring temporary workers receive the same training and protection permanent employees receive.

Marathon Staffing Services, a staffing service placing 15,000 workers annually throughout several states, was cited by the U.S. Department of Labor (DOL) for not providing hearing testing for employees exposed to high noise levels while working on assignment at a Massachusetts concrete manufacturing facility. As part of the company’s settlement with the U.S. DOL/OSHA, it agreed to implement “enhanced” workplace safety and heath protections for all client businesses where it places temporary workers; not just the concrete manufacturing facility were the violations took place.

The enhanced workplace safety measures are wide ranging and include:

• Initial and periodic safety and health inspections or audits at client work sites to ensure working conditions meet OSHA standards;
• Comprehensive safety training for Marathon’s account executives and sales representatives;
• Development of written contracts with its clients specifying respective responsibilities to develop safety and health programs applicable to each workplace where Marathon will supply temporary employees and
• Hiring or assigning a qualified safety and health professional to review and update a checklist to address foreseeable safety and health concerns at client workplaces.

The U.S. DOL regional solicitor for labor noted the settlement agreement with Marathon rippled beyond the case and “(o)ther suppliers and employers of temporary workers can and should take heed to ensure that all employees...work in an environment that enables them to come home each day safe and healthy.”

We are certain the cost of providing hearing tests for employees assigned to one location is incredibly minor compared to the costs of implementing major company-wide changes. An easy way to avoid costly legal entanglements with the DOL is to simply follow OSHA guidelines without deviation. If you are with or use a staffing company and need assistance in handling OSHA investigations or for OSHA compliance concerns involving the staffing industry, please contact Joe D’Amato as indicated below. Please note our thoughts on this issue are strictly legal in nature; KCBA does not provide safety advice or consulting services. If such services are needed, a licensed safety expert should be contacted.

This article was researched and written by Joseph D’Amato, J.D. He can be reached on a 24/7 basis for questions, legal concerns and comment at jdamato@keefe-law.com.

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Synopsis: The Illinois Workers’ Compensation Rules on Staffing Employees—Check Your Agreement!

Editor’s comment: Your organization may have temporary staffing workers on a temporary basis—to fill a need for a short period of time. Your company might also have staffing employees on a regular and continuing basis where the workers are vetted, hired by, paid and fully report to a staffing company and its managers but the line workers and managers work solely at your business locations. What is the rule if such a staffing worker or manager is injured in your workplace—who has to investigate, accept and pay IL WC benefits?

In such claims, the IL WC Act indicates both employers are simultaneously and continuously liable for all WC benefits. What the IL WC Act also outlines is one of the employers will have “primary liability” for a loss. In these situations, the employer directly benefiting from the services of the employee at the time of the accident will be found to be the primarily responsible party. Secondary liability will be on the company providing the worker—unless there is an agreement to the contrary.

However, if the borrowing employer does not pay or fails to timely pay benefits, the loaning or original employer must pay. The IL WC Act is clear--liability is joint and several in such situations. As a simple example, your company needs an admin staffer due to the pregnancy of a “regular” worker. You call ABC Staffing and they send a qualified admin over to take the position. ABC Staffing selected the worker, hired them and they will pay the worker from monies being sent to them from you. If/when that admin worker is injured due to a work-related occurrence, who owes the benefits? Well, if there is nothing in your agreement with ABC Staffing about primary liability, you do.

Our strong message to IL risk managers—check the agreement with your staffing agency/provider to see who has the risk. If you aren’t sure or the agreement is silent, the defense team at KCB&A is happy to assist at no charge—send us your agreement. What you don’t want is to find out after the accident who owes thousands of dollars in benefits.

Please also remember the concept of joint and several liability should protect you from third party liability if a staffing worker is injured—they should not be able to maintain a lawsuit against you in Circuit Court for what might arguably be negligence in your workplace. For example, if one of your workers inappropriately leaves an area with a slippery substance on your floor and a staffing worker falls, you and/or the staffing agency should only owe workers’ comp benefits. Depending on the agreement, you or the staffing company should be able to pay those benefits and both companies should be insulated from third party exposure. Consistent with Section 5 of the IL WC Act, you and the staffing company should be able to obtain dismissal if the staffing worker sues you for the negligence of your worker.

Again, remember the unstated rule is to insure the injured employee has WC insurance coverage from the staffing company or you as their client resulting in certain and rapid payment of WC benefits for the loss. If the staffing agency is primarily liable or not, you want a COI or certificate of insurance from them to insure there is some level of joint protection of your company and workers. There are many legal dangers for not having WC coverage for all losses. Please also note it is a crime and WC fraud to present a fake COI in this state. It is incumbent on risk managers and defense attorneys to make sure which entity has primary liability in defending or  managing such claims.

Who is responsible for compliance with OSHA when staffing employees are involved?

Is it the agency supplying the employees or the client employer for whom they are working? OSHA asserts it is a shared responsibility. Because of its ongoing relationship with the worker, the staffing service has some record-keeping and training obligations. However, as you can see from Joe D’Amato’s article above, primary responsibility resides with the client employer, which typically owns, creates and controls conditions at the workplace. For example, it’s the employer that insures their machinery is properly guarded and necessary personal protective equipment is present and utilized. However, the staffing agency would maintain medical monitoring and exposure records created by a client employer on staffing employees.

The issue of “client employer” versus “temporary service agency” responsibility is focused mostly on the area of employee training. There’s no implied waiver of safety training requirements simply because a staffing employee’s work or duties are of short duration. For instance, training or safety instruction must be given to construction or manufacturing employees, even for very short-term jobs. OSHA often finds permanent employees are properly trained as required by a particular standard but staffing counterparts aren’t causing dramatically increased risk and injuries. That potential results in OSHA citations and the possibility of significant penalties.

If you have questions or concerns about liability in relation to staffing companies or employees, contact Joe D’Amato at the email above or sent a reply. We appreciate your thoughts and comments. Please post them on our award-winning blog.

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Synopsis: Colorado Supreme Court Upholds Termination of Medical Marijuana-Smoking Employee—When Are You Going to Move to Zero-Tolerance?

Editor’s comment: In Coats v. Dish Network, the Supreme Court of Colorado unanimously held an employer may justifiably terminate an employee for their off-duty conduct in using marijuana, despite the employee’s adherence to state law governing medical marijuana.

The core issue before the Court was whether the use of medical marijuana, in compliance with the State’s Medical Marijuana Amendment, but in violation of federal law, is to be considered a “lawful activity” under Colorado’s Lawful Activities Statute. Affirming the lower court’s decision by a vote of 6-0, the Supreme Court ruled against Plaintiff Coats, a paraplegic employee. The Supreme Court arrived at its conclusion by reasoning the plain language of the term “lawful” within Colorado’s Lawful Activities Statute refers only to those activities that are clearly “lawful” under both state and federal law.

Plaintiff Coats worked as a telephone customer service representative for Defendant Dish from 2007-2010, when a routine company drug test revealed the presence of tetrahydrocannabinol or THC in his blood—THC is the major psychoactive ingredient in marijuana. As the employer had a “zero-tolerance” drug policy, it subsequently terminated Coats. Coats filed suit for wrongful termination, arguing he should have been protected by Colorado’s Lawful Activities Statute, which makes discharging an employee based on “lawful” off-duty conduct an unfair and discriminatory labor practice. The THC detected in the routine drug test was the result of consumption of medical marijuana. Coats had a valid state license to use marijuana or THC in order to reduce the pain of frequent muscle spasms—a symptom not uncommon among paraplegics. Therefore, Coats argued he was terminated because of “lawful” use of medical marijuana under Colorado law.          

Who Defines “Lawful?”

The Colorado Lower Court of Appeals reasoned the employer’s actions did not violate the Lawful Activities Statute because medical marijuana remains prohibited under federal law. The Court analyzed the meaning of the word “lawful”—“that which is permitted by law”—to reason for purposes of the statute, “lawful” is used in regard to activities governed by both state and federal law.

The Colorado Supreme Court adopted the Court of Appeals’ majority opinion, finding the term “lawful” to mean “not contrary to, or forbidden by law,” without restrictions. The federal Controlled Substances Act (the “CSA”) prohibits the use, possession, and manufacture of marijuana, makes the use of medical marijuana unlawful under federal law. Thus, Coats’ behavior was not a “lawful activity” under Colorado’s Lawful Activities Statute, and the highest court held Coats’ termination to be valid.

How Does This Ruling Affect Employers Across the U.S.?

The Colorado Supreme Court’s ruling indicates other states with statutes protecting “lawful” off-duty conduct should still be bound by federal law in its characterization of what constitutes “lawful” conduct. While the Coats v. Dish Network ruling is legally binding in Colorado alone, the decision may serve as persuasive authority in similar cases in other jurisdictions. Colorado is way ahead of the country on legalizing marijuana. They are one of a few states that already have statutes defining lawful off-duty conduct.

Please also remember it is not inconceivable to imagine the United States may some day decriminalize marijuana. If/when that happens, it may confuse this ruling and some states’ workplace restrictions on marijuana use. We feel Colorado and other states should avoid the term “lawful” and simply allow employers to block marijuana use at work, as IL law does.

As we indicate above, Illinois law allows an employer to bar marijuana use from your workplace. If you don’t take advantage of this provision of the law, your company may have increased risk if a marijuana user causes an accident or injury. For those reasons, we strongly recommend you get an Alcohol and Drug-Free Workplace policy in place right now—there is a new bill on Governor Rauner’s desk for his signature--it decriminalizes possession of small amounts of marijuana. Medical marijuana will also roll out across our state at some future point. This has to be a concern for all Illinois employers and you need to understand the importance of blocking the use of marijuana in your workplace. The defense team at KCB&A has a free policy for you to consider and implement—if you want to review it, simply send a reply.

We thank the reader who gave us the heads up on this important ruling. We appreciate your thoughts and comments. Please post them on our award-winning blog.

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In Your Workplace!

We are pleased to announce an upcoming half-day breakfast seminar on 7/17/2015 for our valued clients!

The topics include:

·        Supervisor Substance Abuse Training (meets DOT requirements)

·        The Legal aspects of Opioids and Medical Marijuana in workers’ compensation

This helpful seminar is designed to assist supervisors in addressing these critical issues in your workplace. Although the program complies with the Department of Transportation requirements, the material applies to all industries in addressing workplace substance abuse. Please let us know if you are interested in attending our upcoming seminar. Full details will be forthcoming. We will hold this seminar at one of our valued clients, Burke Beverage, Inc.:

Address: Burke Beverage, Inc., 4900 Vernon Ave, McCook, IL 60525

Registration: Please contact Sandra Castaneda, Phone: (708) 496 - 1515 ext.131

Email: scastane@MACNEAL.COM

6-15-15; Warning--Radioactive WC Legislation Pending Before IL Senate; Liberty Mutual May Prove WC Profitability is Over-Stated; One More WC Bill You Need to Know Of and more

Synopsis: Warning--Radioactive WC Legislation Pending Before IL Senate!

Editor’s comment: We aren’t reporting actual radioactivity, folks. Our concerns for our readers and IL Business are with IL House Floor Amendments 5, 6, and 7 to HB 1287 that are being presented to the IL Senate as “WC reforms” when they are certain to increase the cost of WC in this state. We note Senate President John Cullerton is sponsoring this legislative morass and we hope this solid leader drops his sponsorship and sends this whole concept to the nearest shredder.

IL House Floor Amendment 5 Is Certain to Cause IL WC Benefits to Skyrocket

House Floor Amendment 5 provides where an employee is required to travel away from his or her employer's premises in order to perform his or her job, the traveling employee's accidental injuries arise out of and in the course of his or her employment when the conduct in which he or she was engaged at the time of his or her injury is reasonable and when that conduct might have been anticipated or foreseen by the employer. In reasoned legal view, this is an enormous departure from the traditional concept of what a “traveling employee” might be and greatly expands workers comp coverage to just about anything a worker does when they are “in movement” or traveling. This language basically reverses the concepts turned aside/discarded by our IL Supreme Court in the ruling drafted by Chief Justice Rita Garman in Venture-Newberg-Perini Stone & Webster v. IWCC issued on December 19, 2013. We told our readers then and we restate right now, workers’ comp costs in this state will skyrocket to expand the “traveling employee” concept in this fashion. We again point out the term “traveling employee” isn’t in the IL WC Act and doesn’t have to be—this new and unprecedented legislative definition doesn’t help at all. If we simply follow the existing law about “arising out of” and “in the course of” employ, we have the needed limitations with arbitrators, commissioners and jurists who use the “English language” interpretations of those two phrases.

Please remember the traditional definition of a “traveling employee” was someone who is supposedly engaged in foreign travel. Such a worker faces unusual dangers and risks—there are language differences, varying kinds of currency, food that may cause lots of diseases or problems you wouldn’t face in your home state and other increased risks. In our view, the idea of expanding WC coverage for someone in a totally foreign and dangerous environment makes some sense. That said, “traveling employees” aren’t folks who are walking around their home town, like the city inspector in the IL WC Appellate Court ruling in Nee v. IWCC. The bordering-on-malpractice decision made by the defense attorney in that claim is they stipulated the worker was a “traveler” when he was in a totally familiar and risk-neutral environment. They made the mistake the IL House and maybe Senate could make if we enact this disastrous new legislation.

What is wrong with Amendment 5? Well, it defines a “traveler” as someone “required to travel away from his or her employer’s premises.” What in tarnation does that mean? What is a “premises?” Doesn’t that mean all truckers, bus drivers, construction workers, staffing employees, government workers of all sorts and anyone going to get coffee at Starbucks for their boss would be “travelers?” And what is covered for such workers—any “reasonable” activity leading to injury or illness that might be foreseen by the employer? Isn’t that just about anything short of playing with gasoline and matches?

IL House Floor Amendment 6 is almost as bad as 5—We Predict Passage Will Cause IL WC Claims and Resulting Contribution Litigation to Erupt

It greatly expands coverage to allow lots of employers to be brought into litigation and have to defend themselves with medical-legal opinions and more depositions. It sets forth provisions providing if an award is made for benefits in connection with repetitive or cumulative injury resulting from employment with more than one employer, the employer liable for award or its insurer is entitled to contribution or reimbursement from each of the employee's prior employers or their insurers for the prior employer's pro rata share of responsibility. This amendment provides after the Illinois Workers' Compensation Commission makes an award for benefits in connection with repetitive or cumulative injury, the employer liable under the award or its insurer may institute proceedings before the Commission for the purpose of determining the right of contribution or reimbursement. This collateral and post-award proceeding shall not delay, diminish, restrict, or alter in any way the benefits to which the employee or his or her dependents are entitled, but shall be limited to a determination of the respective contribution or reimbursement rights and the responsibilities of all the employers joined in the proceeding.

Some employers might innocently like the idea of contribution in repetitive trauma claims—we caution our readers and all observers it isn’t a solid idea. Why? Well, right now, one employer owes all of an IL work comp claim or none of it. If you allow for cross-claims for contribution, claimants are going to sue everyone they have worked for over the years. No single employer will have to lead the fight, insuring confusion. The statutory language and administrative outcome is going to insure WC benefits will be paid and rapidly due to the worker—thereafter all the carriers for all the employers are going to get to fight out who owes what and why. Trust us, you don’t want lots more “repetitive working” claims where it is almost impossible to avoid some tiny wedge of liability to then have to fight it out or settle with everyone who had the misfortune to hire the man or woman in the past. If you don’t see this as a legislative and administrative disaster—please let us know your thoughts as to why.

IL House Floor Amendment 7 Creates Another “Do-Nothing” Panel or “Task Force” That May Never Meet!

This Floor Amendment indicates the IL Department of Insurance shall report annually on the state of self-insurance for workers' compensation in Illinois and outlines the contents of their expected report. This Floor Amendment also creates the Workers' Compensation Premium Rates Task Force. The legislation provides for the membership and duties of the Task Force and requires the Task Force to issue its recommendations by December 31, 2015.

Yucch. We hate legislation that creates dopey “task forces.” To best demonstrate why we hate them, we remind everyone of the 2011 Amendments to the IL WC Act where they created advisory body or “task force” known as the IL State Workers’ Compensation Program Advisory Board designed to review, assess and make recommendations to improve the State workers’ compensation program. The Governor was to appoint one member of the Board with the Speaker Of The House and Minority Leader to appoint other members. The members of this board were to serve three year terms.

What happened after this was completed was about one year of fighting over who would make the Board and then…. Nothing. Absolutely nothing. We don’t think the IL SWCPAB ever met, even once. If they did, they didn’t do anything anyone is aware of. IL State WC claims remain high and costs are even higher. They still need someone to force IL State government to implement obvious and simple cost-saving concepts like bringing injured workers back to light work. When we consider what a failure the SWCPAB was, we predict the same sort of ennui and lack of action is going to happen with the IL WCPRTF. Such silliness sounds good and gives legislators grist for the campaign trail but in real-time, it is meaningless. We hope and pray this House Floor Amendment doesn’t pass either.

In summary, call your senator or state rep and ask them to put the kibosh on all this silliness. We assume the party-in-power might have floated these amendments out there to cause confusion and a crazy-counter-point to Governor Rauner’s proposals. We truly don’t want WC “de-form” legislation that would cause immediate consternation and confusion in the business community and lead to even more drainage across state lines.

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

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Synopsis: If Work Comp Insurance is Wildly Profitable, Why is Liberty Mutual Making More Dough with Less Work Comp Insurance?

Editor’s comment: A familiar whine of the IL Trial Lawyers Ass’n and their supporters is the proposition that workers’ comp insurance is a definite money-maker. Both National Public Radio and ProPublica also take up the same mantra, asserting every WC insurer is rolling in mountains of cash. We are sure there are over 300 insurance carriers writing WC insurance in this state—that may be the reason for the minimal margins.

Joe Paduda who is a long-time industry observer and blogger rebuts that suggestion. In his blog, Managed Care Matters, he strongly asserts, over the past decade or so, work comp insurance is barely a breakeven proposition.

Liberty Mutual Holding Co. followed through on its announced plan to reduce its workers compensation exposures and reported lower comp premiums for 2014, which one expert said raises the question of whether the insurer plans to completely leave the work comp market altogether. Liberty Mutual reported its voluntary workers comp net written premiums declined 14% last year to $2.15 billion.

The Boston Globe reports Liberty Mutual, who used to be the U.S. WC industry leader has greatly cut back its work comp participation and exposure over the last few years. In doing so, they are now ramping up personal lines and other insurance business lines while reducing their WC premiums by over a third. Liberty has dropped to now be the 4th largest underwriter of WC and they are paying Berkshire Hathaway $3 billion to take over a big chunk of its exposure for legacy WC and some environmental claims.

It appears clear the decisions above have dramatically increased their corporate profitability. The math indicates Liberty Mutual’s overall profitability increased from $284 million in 2011 to $1.7 billion last year. This clearly means the national work comp insurer that controlled the U.S. WC industry for decades has moved away to seek other opportunities. We agree with Mr. Paduda, the reason is basic, work comp insurance simply isn’t as profitable as many claim.

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

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Synopsis: One More Important Piece of Potential IL WC Reform Legislation You Need to Know About.

Editor’s comment: A bill requiring small to mid-sized IL WC insurers to collect collateral from employers with large-deductible workers' compensation policies was cleared by the IL Senate and has also been passed by the House. It now awaits Governor Rauner’s signature to become law. Our sources indicate this may be model legislation for the 30-something states that allow high-deductible WC policies.

Senate Bill 1805 sponsored by Sen. William R. Haine, D-Alton, would require any workers' comp insurer with less than an "A-" rating from A.M. Best Co. and less than $200 million in group surplus to require collateral from policyholders who purchase a policy with a deductible of $100,000 or more. The collateral could be posted in cash or securities, such as a bond or irrevocable letter of credit, held in trust by a third party.

The bill would require insurers to limit the size of a WC policyholder's obligations under a large-deductible agreement to 20% of the total net worth of the policyholder at each policy inception. This new bill would also give the state director of insurance authority to prohibit insurers that are determined to be in a financially hazardous condition from issuing or renewing large-deductible policies. The new bill would take effect July 1 if signed into law by Gov. Bruce Rauner.

Large-deductible workers’ comp policies have proven to be a headache for U.S. WC insurance regulators. The collapse of Park Avenue Co. and affiliate Providence Property & Casualty Co. -- blamed in part on the failure of policyholders to pay their deductibles -- have left insurance guaranty associations around the U.S. with more than $100 million in liabilities.

Problems Associated with Using a High Deductible WC Insurance Plan

• The shock of having to pay the insurance company the deductible – some employers go into deductible plans with the idea they will never incur a claim so they will never have to fund the deductible. This expectation creates lots of controversy. Small employers are enticed by the idea of significant premium savings. However, in reality, an employer with a guaranteed WC insurance premium of $20,000 might sign up for a $5,000 deductible plan, save $1,000 in up-front premium but then be charged with repaying the insurance carrier $5000 when the first WC claim occurs.

• Collection of the Deductible – Most states include a provision which kicks in when an employer does not pay the required deductible then the insurance company can quickly cancel the employers WC insurance policy for non-payment of premium. This now exposes an IL employer to civil and criminal liability.

• Payment of claims – Claims are handled by the insurance company claim department. There is the potential for bona fide WC claims not to be reported or disagreement as to how claims are accepted, processed and paid.

Now, if this new law is signed by Governor Rauner, IL employers will have to post collateral to even get a high-deductible policy in place. We appreciate your thoughts and comments. Please post them on our award-winning blog.

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