10-30-2017; Governor's Veto Blocks Two IL WC "Deforms" and The Focus on Lower WC Costs Turns to Our Hearing Officers

Synopsis: Two Kooky WC Legislative Efforts Die a Peaceful Death And The Focus on Lower IL WC Costs Turns To Our Hearing Officers.

Editor’s comment: To my understanding, this dumb idea started with the public relations forces of ITLA or the IL Trial Lawyers Ass’n. In response to high costs in the IL WC system being a source of criticism by Governor Rauner, the IL State Chamber and other business groups, some ITLA rocket scientist came up with the idea that multi-zillion dollar insurance carriers were somehow manipulating “profits” and thereby causing IL WC premiums to be higher than other States. It couldn’t have been all the favorable rulings and high awards and ever-spiraling rates that happened in the Blagojevich era when he traded votes for control of the IWCC to the nice Claimant bar from Madison and St. Clair County. NOOOOO!! It was those unnamed insurance carriers—in response, the idea was to snip $10M out of the IWCC’s annual budget to start a tiny, truly miniscule State WC Mutual insurance carrier that would put all the industry giants to shame. Right?

Wrong. I truly doubt this idea would have ever actually been implemented, even if the IL General Assembly had passed it. I think it would have gone to the same junk heap the IL State WC Oversight Panel For State Workers Committee is on—they spent hours and hours debating the makeup of that panel and what it would do and they never met, not even once. It all sounded good when it got passed but fizzled in execution while the State still shovels millions to our IL government workers who then support and vote for the politicians shoveling them money.

Either way, last week, you and I and all my readers hailed another victory when the bill that would establish an IL State workers' compensation mutual insurance company funded by a $10 million loan from the Illinois Workers' Compensation Operations Fund failed to receive 71 votes required to override Governor Rauner’s veto. Under the proposal, the $10 million was to be an intergovernmental loan to be paid back to the IWCC with interest. As I indicate above, financial repayment in our State gov’t is usually a wish and a prayer.

The amazing WC gurus at the IL State Chamber also opposed the proposal because it required this new State insurer to be included in the State's Guaranty Fund which pays claims made against insolvent insurance companies in all lines of insurance, not just workers' compensation. Should the State WC Insurance Fund be declared insolvent for their liabilities in unlimited amounts, this exposure/loss would be absorbed by the Guaranty Fund and then assessed back against all private property and casualty insurers, including homeowners' insurers, whose customers would likely share the new and unprecedented cost burden. Illinois homeowners and auto insurance customers would also have the potential responsibility to bail out this State workers' compensation insurance fund should it be poorly run and then fail.

The Other Dopey IL WC “Deform” Was HB 2525.

This bill would place price controls on workers comp insurers selling policies in Illinois. Steve Schneider of the American Insurance Ass’n said: “It's the harshest and most opposed regulatory type of structure that I have ever seen because we are going to have to seek permission from the government to charge a final price on the workers compensation insurance that we provide to our customers. Part of the decision-making by the state ... is whether those premiums are reasonable, and we just think that is an extraordinarily broad reach of power for the government to assume … we are opposing H.B. 2525 on that basis,” he continued. “The sponsors of the bill have put in some weak language designed to give us the gloss of reform, but it is simply insufficient. There is no independent verification of the amount or types of savings that this legislation would produce.”

This bill also tried to codify the “traveling employee” concept for the first time, as if the Supreme Court hadn’t rejected that concept when they last considered it.

The motion to override the veto of HB2525, a bill sponsored by Rep. Jay Hoffman (D-Swansea)/Sen. Kwame Raoul (D-Chicago), was not called for a vote. Consequently, under the IL Constitution the 15 day period to call a veto override expired. Good riddens to bad rubbish.

What Was Bad About These Nutty Bills?

They were designed to and did deflect any real WC legislative change or reform in this State. This important debate went down an endless side-track to nowhere with consideration of these two “fake” bills.

What is Good About The IL WC System?

We have lots of very solid Arbitrators and Commissioners who are dedicated to bringing this State back to the middle of the U.S. in terms of WC costs and premiums. We also feel the message has made it to the IL Appellate Court, WC Division that is taking a more traditional role in overseeing the IL WC system—happy to explain. Please note the impact of these new and improved hearing officers, judges and justice won’t happen in a day or three. It will be a couple of years for their rulings and settlements to show improvement for our WC risk, business, claims and insurance community. The hearing officers also want truly injured workers to be properly taken care of and protected under the IL WC Act and Rules.

As we have asked in the past, if you or your claims team see a rotten or shockingly bad IL WC decision, send it along for our complaint box.

That said, we truly feel things are looking up and ask our readers to be patient. We appreciate your thoughts and comments. Please post them on our award-winning blog.

10-23-2017; A Coda for the Soda Tax and What It Means to WC and IL Gov'ts; Brad Smith Analyzes Important Discrimination Ruling; IN WC Rates Go Down and Down Further and more

Synopsis: A Coda for the Soda Tax and What It Means to WC and IL Gov'ts. Analysis and Comments from Gene Keefe, J.D.

Editor’s comment: A “Coda” is an ending passage. What recently happened to a major IL gov’t body is they enacted a 1 cent an ounce tax on “sweetened drinks” to include lots and lots of fizzy stuff you and I might drink. When it was passed, it happened quietly with little rancor. The drafters put off the tax for a couple of months to insure it could sneak up on us. When it started in July 2017, the stuff hit the fan and folks in this area started to go nuts about having to pay the highest cost for cans of what some Illinoisans call “pop” or what everyone else calls soda in the civilized world.

A taxpayer revolt started and it worked. We have seen lots of donations to allow TV advertising that complained, complained and complained some more about this shocking tax.  Suddenly, several of the Democrat “wise guys” including IL House Speaker Mike Madigan and County Board member John Daley of the Richard J. and Richie M. Daley clan were opposed to the tax. Everyone confirmed the new soda tax might result in a widespread taxpayer revolt. Shortly thereafter, the Coda for the Soda Tax was enacted, ending it effective December 1, 2017.

Who Cares? Why Worry About a Penny of an Ounce Tax?

Well, the soon-to-be-defunct tax has already been spent. There will now be a giant gap in that budget. If you take a look at a report from Crain’s Chicago Business you may note millions upon millions in new and unprecedented benefits were doled out to the prison guards that are stationed at our County’s prisons. Among lots of other stuff, the agreement provides for

·         Shift differential

·         Maximum security guard duty differential

·         An increased uniform allowance

·         Roll call yearly bonuses

·         Specialty unit pay for transportation (and other non-routine matters)

·         What I understood was six months of paid maternity/paid paternity leave—not six weeks, six months!!

·         Paid fitness for duty time

·         Paid FTO time

·         Removal of the 4-day 32-hour cap on personal time

·         Five hour work/lunch guarantee

·         Sick time buyback which means if the guards don’t use it, the County—taxpayers—pay it or more precisely “double-pay it” any way

·         Changing the sick/comp time from eight hours comp to eight hours paid

·         Me-too short term disability

·         0 percent increase in health care premiums for the entire contract

·         A $1,200 bonus, $600 of it to be paid this year

·         And 4 percent in additional increases in pay, half in 2019 and half in 2020.

If you look online, these Correctional Officers used to start at about $58K a year. In my view, all the stuff above is going to kick their pay up by 20-40% and is certain to cost taxpayers zillions. The money to pay all the increases was in the Soda Tax and it will disappear in 39 days. Where will the needed dollars come from?

How Does This Insane Anomaly Again Demonstrate How Democracy is Certain to Fail In Illinois?

Well, a guy named Michael Shakman was able to get what is called the Shakman Decrees enacted in this nutty state about thirty years ago. The Shakman decrees were a series of Federal court orders regarding government employment in Chicago, which were issued in 1972, 1979, and 1983, in response to a lawsuit filed by civic reformer Michael Shakman. The decrees barred the practice of political patronage, under which IL government jobs were given to political supporters of a politician or party, and government employees used to be fired for not supporting a favored candidate or a given political party. Shakman filed his initial lawsuit in 1969 and continued the legal battle through 1983. The decrees were compromises, but were considered a victory for Shakman, as political patronage was technically abolished in this State.

What took the place of political patronage was inconceivably expensive benefits for government workers at every level of Illinois State, County and Chicago government. Why provide wildly expensive, luxurious and impossible-to-fund benefits to government workers? Well, the folks in power and we have any number of politicians who have been in government for decades started to notice if you overpaid and overstaffed government workers, they would organize, vote and fight to insure you remained in power. Please also note we overpay most government jobs while they are actually working and then grossly overpay the same folks after they are done working with fake government pensions that are grossly underfunded.

This system works because the rest of us rarely vote—voter turnouts keep getting lower and lower. In the 2016 election, our State had almost 13 million citizens and just over one in thirteen actually voted. The disparate impact of high voter turnout from over-compensated gov’t workers is easily demonstrated and similarly dysfunctional.

At every level of Illinois government, we also overpay and do very little to fight workers’ comp abuse by government workers. The State of Illinois does an absolutely miserable job watching its workers’ comp budget—they may pay out more than $200 million a year or more due to the lack of supervision and accountability. The same can be said for the County of Cook and City of Chicago. What all three governments will do is put injured workers on TTD and keep them on TTD for months and years, claiming they can’t return them to jobs due to work restrictions. At the same time, these same governments will regularly hire lots of other new workers to light and sedentary jobs when they open up. There is very little oversight and the minimal oversight provided usually comes from other government workers!

Stop with the Useless Liberal v. Conservative Battle—Is There Any Chance IL Gov’t Can Every Be Required to Match the Private Sector?

When it comes to analyzing the effectiveness of these governments, I like to make a single analogy—how do the costs of running things like a prison match what Illinois taxpayers could get from any other private source? There are private companies we could hire to take over for these over-compensated/over-staffed guards. I assure you the taxpayers affected are paying triple or quadruple and more of the cost of the many guards you are reading about above. Consider other government jobs, like picking up garbage and keeping our highways flowing—again, all of it could be done much more efficiently, if we had folks from private industry engaged to competitively do so.

What is wrong with paying more for our government workers? Well, one problem is about $250,000,000,000 in Illinois State Debt along with zillions in additional Cook County and City of Chicago debt. All of these governments are pointed toward a financial Armageddon if nothing is done to increase efficiency and cut spending.

Could the IL WC Commission Match the Cost of a Private Source Providing the Same Services?

Youbetcha. The IWCC is spending $30M + of Illinois business’ money. The IWCC has over 30 initial or front-line hearing officers and 27 folks to hear second-level administrative appeals if you include the 9 Commissioners and their complement of two well-paid assistant attorneys each. In my view, we keep hiring more hearing officers while IL WC claims keep dropping in number! Almost all of the claims eventually settle—statistically about 90% of the claims eventually are dismissed or settle at the first or second level.

My biggest problem with plucky Governor Bruce Rauner is precisely what I continue to see at the IWCC on his watch—little to no analysis on what this state agency is about and how much do-re-mi is needed to justify your tax dollars in running it.

There are numerous potential efficiencies that no one ever talks about. For the hard-working folks on the front line that might be affected by these comments, I apologize but please remember, if we don’t have the money, we don’t have the money. We need as much government as we can afford!

1.    One great idea—if an older claim is set for hearing it has to go to hearing or it is dismissed or the defense defaulted. That is a simple efficiency that I feel could be implemented this week. I am sure there would be lots of caterwauling and crying but everyone would adjust rapidly if/when they had to. I don’t believe the IL WC Act or Rules would have to be changed, I just think the IWCC administration would have to start applying the law and rules as written and not allow decades of continuances for silly stuff like “getting medical records.”

2.    Another great idea from many of my clients—An IL WC filing fee! Stop the practice of allowing attorneys to file sometimes frivolous WC claims at no cost to then hold the file open for years, driving up the costs of reserves, adjusting and defense counsel. Consider a $50 per file fee to add income to the pie and be more like the private sector in having the participants share part of the cost of administration.

3.    A third great idea—have someone actually do a time management study to see what our hearing officers and others actually do each day to have what some computer geeks call “statistics” to determine the right level of employees at every step of the IWCC process. I defy anyone and everyone in the IL WC process to stop blindly claiming we need this number or that number of hearing officers based on a seat-of-the-pants guess-timate of what everyone might be doing.

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

Synopsis: Real Estate Firm Sued for Discrimination by the EEOC for Rescinding Job Offer to Employee that Disclosed PTSD. Research and analysis by Bradley J. Smith, J.D.

Editor's Comment: Chicago’s very own Commercial Real Estate firm, with an office in Atlanta, Georgia was sued by the Equal Employment Opportunity Commission (EEOC) in the U.S. District Court for the Northern District of Georgia, Atlanta Division. The case is captioned as Equal Employment Opportunity Commission v. Jones Lang LaSalle Americas, Inc., Civil Action No. 1:17-CV-4017-ELR-JSA. The lawsuit was filed on October 11, 2017.

The EEOC alleges Jones Lang LaSalle Americas, Inc. violated federal law when it rescinded a job offer to a development and asset strategy production support analyst position in April 2016 after the applicant disclosed her diagnosis of post-traumatic stress disorder (PTSD). When she disclosed it, she also requested to work remotely once per week to attend medical appointments related to her disability. Prior to learning of this disability, the EEOC alleges Jones Lang LaSalle informed the applicant numerous times during the interview process that it offered flexible work arrangements and schedules.

The EEOC also claims once Jones Lang LaSalle learned of this, it rescinded the job offer. The applicant allegedly withdrew the accommodation request, but Jones Lang LaSalle purportedly still refused to reconsider its decision.

That begs the question of any seasoned employment lawyer: was this a reasonable accommodation that was necessary or could the applicant have been given partial time off work to attend the claimed medical appointments? Clearly, if Jones Lang LaSalle did not engage in the interactive process with the applicant to determine what reasonable accommodations would be appropriate or that it could offer, then it could be in the wrong. However, the EEOC’s one-sided allegations in this lawsuit do not tell the whole story. Once the case works its way through expensive discovery and motion practice, then a clearer picture may be ascertained. Nonetheless, this will likely cost Jones Lang LaSalle an exorbitant amount of money.

Obviously, if Jones Lang LaSalle engaged in the behavior alleged, then its conduct violated the Americans with Disabilities Act (ADA). The EEOC allegedly first tried to reach a pre-litigation settlement through its conciliation process, which is required prior to suing. Based on the allegations contained in the complaint, the EEOC seeks back pay and compensatory damages for the applicant, as well as injunctive relief designed to prevent similar discrimination in the future.

Despite the EEOC’s allegations, the accommodation requested by the applicant may have not been the most appropriate or even reasonable for that matter. But not engaging in any interactive process would certainly hurt Jones Lang LaSalle’s chances of defeating the lawsuit. The interactive process requires that both the company and the applicant determine what accommodations would be reasonable and available without causing the company an undue hardship. Here, based on the EEOC’s barebones allegations, this did not occur.

The research and writing of this article was performed by Bradley J. Smith, J.D. Bradley can be reached with any questions regarding the ADA, employment law, and general liability defense at bsmith@keefe-law.com.

Synopsis: Indiana approves 12.8% WC rate decrease.

Editor’s comment: Most businesses in Indiana will spend less on workers compensation insurance in 2018 after the Indiana Department of Insurance on Friday approved a 12.8% rate decrease, which was proposed by the Indiana Compensation Rating Bureau. The filing detailed an overall loss cost reduction of 12.1%, according to the bureau.

The 12.8% decrease is the largest change in more than 25 years and follows last year’s decrease of 9.3%, the bureau reported. “Looking at recent years changes, the last five years (2014-2018) result in an overall decrease in costs of -28.4%. The three-year period just prior to that (2011-2013) resulted in an overall increase of 9.6%,” per a memo issued Friday.

As we have advised our readers, the IN WC system does a miserable job taking care of widows/widowers and seriously injured workers. If you were to suffer closed head trauma and lose half of your IQ due to an admitted work accident, they only pay 10 years of benefits in IN before tossing you to the welfare line.

That said, Kevin Boyle and his IN WC defense team do defend numerous clients there and we have to report this business-friendly news. If you need guidance on an IN WC claim, send a reply.

Synopsis: This Wednesday!!! Join KCBA at the IL Chamber of Commerce 2017 Workers' Compensation and Safety Conference! Wednesday, October 25, 2017 at the Hilton l 3003 Corporate Drive West l Lisle, IL 60532.  The program runs from 8:30 am – 3:30 pm.

Editor’s Comment: As part of the program, there are several Workshops which will include a presentation on Ethical Management of Disability & Employment Law Concerns Arising in Workers’ Comp Claims presented by our own John Campbell, Shawn Biery, & Brad Smith

The IL State Chamber also wants you to know:

This is the most important annual Workers’ Compensation Conference for Illinois employers!

·        The 10th Annual Workers’ Compensation and Safety Conference will include valuableinformation for all Illinois Employers with all new topics and fresh presenters.  

Workers' Comp. Reform is being debated at the state Capitol.

·        Get the latest analysis and thoughts on WC reform at the conference, along with cost-controlling measures, safety issues to prevent workers’ injuries, and discussion of court cases as well as much more.

Continuing Education Available!

·        This conference has been pre-approved to offer 3 HRCI credits.

·        This conference has been pre-approved to offer 4 SHRM Professional Development credits.

·        This conference has been submitted for approval to offer 4 CLE credits for attorneys.

- Learn More -

You may also contact Shawn Biery at 312-756-3701 or sbiery@keefe-law.com or the Chamber directly via Laurie Silvey at (217) 522-5512 ext 223 or lsilvey@ilchamber.org

10-16-2017; Will The 2017 WC Deforms Return from the Dead to Kill New and Existing IL Businesses?; In IL WC, It Is Not Just Getting the Emails, It is Opening Them and more

Synopsis: Illinois General Assembly Returns in Nine Days for their Fall Veto Session—Will Their 2017 Workers’ Comp “Deforms” Return from the Dead to Kill New and Existing IL Business/Gov’t?

Editor’s comment: Earlier this year, Governor Bruce Rauner vetoed a number of bills were certain to make Illinois already troubled financial canoe even tipsier. Many of the bills were certain to increase the cost of doing business in our state. If they were all to become law, we are certain these bills would drive business from the state and pose a terrible blow to Illinois being able to compete for high-paying jobs with good benefits. I salute our plucky Governor's willingness to join with business groups like the Illinois State Chamber of Commerce and others while getting pressure to sign these bills from organized labor and other special interest groups who seem bent on destroying Illinois' jobs climate.

The General Assembly returns to Springfield for the veto session the week of October 23rd and the week of November 6th. The veto session likely will demonstrate the strength of the Governor's relationships with Republican lawmakers, especially Illinois House Republicans. With the friction created between the Governor over the budget deadlock and tax increase override vote, Governor Rauner will lobby and then rely on House Republicans to sustain his important vetoes. To override the vetoes, Democrats will need 71 votes in the House and 36 votes in the Senate. The current political makeup of the Illinois House is 67 Democrats and 51 Republicans. The Senate has 37 Democrats to 22 Republicans.

The two Work Comp Bills where a legislative override of the Governor’s veto might happen are:

·         HB 2525, sponsored by Rep. Jay Hoffman (D-Swansea)/Sen. Kwame Raoul (D-Chicago). This nutty bill is being promoted by the House & Senate Democrats as workers' compensation “reform.”

o   I consider it a “fake” bill that was created to counter the less-than-brilliant WC proposals of Governor Rauner in his “Turnaround Agenda.”

o   Now that the “Turnaround Agenda” basically disappeared, we hope this silly bill will similarly disappear but you never know.

o   The bills codifies very poor WC case law for "causation" and "traveling employee."

o   This bill, if the Gov’s veto is overridden, may expand workers’ comp coverage drastically, as it would lock IL employers into a poorly thought-out court-expanded liability that was later rejected by the IL Supreme Court.

o   In addition, it prevents employers from being able to achieve a change in case law from future courts. Some WC benefit relief is included but is far outweighed by increased regulation and litigation.

·         HB2622,  sponsored by Rep. Laura Fine (D-Glenview/Biss). This legislation uses employer and insurer tax dollars to capitalize the creation of a state-established, mutual Workers’ Comp insurance company to compete with the over 300 insurers that already provide hotly competitive workers' compensation coverage.

o   The $10 million of startup money are tax dollars that currently go to pay for the operations of the IL Workers' Compensation Commission.

o   No one knows how the IWCC would operate with an immediate and gaping $10M hole in their $30M budget.

o   The legislation provides the start-up funds are supposed to be a "loan" to be paid back by the new State-owned carrier with interest to the IWCC!

o   Given the hilarious track record of Illinois government, it is difficult to believe the loan would be paid by this start-up company.

o   Further, given the laughingly poor management proclivities of Illinois gov’t leadership, it is impossible to imagine this tiny insurance carrier could possibly compete with the international giants of the insurance industry.

o   If the new insurance company floundered, one has to wonder if they would again tap into the IWCC funding, further jeopardizing important administrative functions in adjudicating benefits for injured workers.

o   The whole silly concept is based on an ITLA-driven theory that all the major U.S. insurance carriers somehow “hide” box-car profits but only in this single state.

If the vetoes of either IL WC bill are overridden, rest assured the IL WC system is going to be steeped in confusion and chaos for some time to come. WC premiums/benefits and costs may literally skyrocket. The administration of our system of WC justice may be wildly changed.

Please keep your fingers crossed that our General Assembly doesn’t make a mess of things while Amazon is considering moving its second headquarters here.

Watch this space for news on this cliffhanger. We appreciate your thoughts and comments. Please post them on our award-winning blog.

Synopsis: In IL WC, It Is Not Just Getting the Emails That May Be Important, It Is Opening Them!!

Editor’s comment: We saw a recent IWCC ruling of some importance on the issue of managing emails from this administrative body. The facts are fairly clear. On party filed a Petition for Review of the Arbitrator’s decision.

Both parties agreed to waive receipt of the Arbitrator’s decision by certified mail and consented to receive the ruling via email. Both parties agreed their email addresses were accurate on the Request for Hearing form or “stip sheet.” The Arbitrator’s decision was filed on Feb. 2, 2016 and forwarded to both sides via email on Feb. 3, 2016. The appealing party did not file the requisite Petition for Review until March 31, 2016, well after the 30-day period required under Section 19(b) of the IL WC Act. On the Petition for Review the appealing party indicated the decision was filed on Feb. 2, 2016 but received on March 23, 2016.

Pursuant to IWCC procedure, decisions are emailed with a delivery receipt and read receipt requested. The delivery receipt is generated automatically when the email is successfully transmitted to the recipient’s email address. The read receipt is generated when the email is opened. The Commission notes it is possible for the read receipt to be manually prevented by the receiving party. In this claim, the non-appealing party sent the read receipt on the day the email was sent or Feb. 3, 2016. The appealing party’s email system didn’t send the read receipt until March 24, 2016.

The appealing party claimed the Arbitrator’s decision was emailed to an attorney who was no longer at the firm and the departing attorney’s email wasn’t monitored by anyone at the law office. Without citing anything in support, the appealing party asserted their supposed understanding that an emailed decision was not considered “received” until receipt occurs by opening the email.

The IWCC’s ruling indicates what happened with this appeal would be synonymous with someone getting a certified letter via USPS and then choosing not to open it for a month or more. The IWCC’s unanimous ruling indicated the appealing party’s law firm had an affirmative duty to monitor and open emails sent to all attorneys at the firm. If there was a change, the parties also had an affirmative duty to advise the Arbitrator of the change in email address to insure decisions are properly relayed to the parties of record.

The Commission ruling said: “To find otherwise would allow too much opportunity for the 30-day deadline to be subverted by simply waiting indefinitely to read any emails from the Commission.” The Petition for Review was dismissed for lack of jurisdiction.

I strongly salute this ruling. I wanted to report it to insure parties on all sides of any IWCC claim are aware of it. The matter may be further appealed and this article is not intended to effect that outcome in any way.

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