7-24-2019; When is a Loss Covered by the IL WC Act and more

Synopsis: When Is a Loss Covered by the IL WC Act?

Editor’s comment: The first thing an attorney, risk manager or adjuster must do when a new claim has been made is to evaluate whether the loss is covered by Illinois workers’ compensation law versus the various federal acts, general liability, or some other common law or other statutory remedy. If so, the next inquiry is whether Illinois workers’ compensation law applies versus the law of some other state or the federal system. Finally, if the case is properly an Illinois workers’ compensation claim, the adjuster must determine whether the policy in force at the time of the accident or disability covers the particular loss alleged.

            A. Is this an Illinois workers’ compensation claim?

This basic question is often overlooked. The assumption is that, if an Illinois workers’ compensation claim is filed, the case involves a loss that should be compensated under Illinois workers’ compensation law. However, in order to recover benefits under workers’ compensation law, the activities must be covered by the IL WC Act and not under any other benefit provision in a different system that may be considered exclusive.

For example, if an Illinois employee is working to maintain a watercraft when injured and the vessel is on a navigable waterway, such injuries would be covered by the exclusive provisions of the federal Longshore Harbor and Workers’ Compensation Act, administered by the OWCP. Such injuries would not be appropriately covered by the IL Workers’ Compensation Act, even though the employee was hired by and working for an Illinois employer. U.S. Postal workers are also covered by a similar federal-only WC Act. There are similar laws that have exclusive coverage to eliminate jurisdiction of the Commission to hear the claim.

Another aspect of the WC system coverage question is when the employee can bring a workers’ compensation claim against an employer and when the employee can also sue the employer for the same injuries in civil court. This concept is a possibility but under very limited circumstances. The basic model in the development of workers’ compensation throughout the industrialized world is the injured employee gave up his/her right to bring a common law action against the employer in exchange for workers’ compensation benefits that are more certain and more rapidly provided but potentially lower than what a jury might be able to provide for a similarly severe injury.

There have been a number of strange and complex legal devices that have allowed Illinois employees to maintain common law claims against third parties that might require the employer to pay a part of a jury verdict, but the general rule is supposed to be that the employee cannot sue the employer at common law if he/she is entitled to workers’ compensation benefits.

One clear exception to this concept is when an employer commits an intentional act or hires another to commit an intentional act to injure an employee. For example, if the employer were to hire a ruffian to injure/attack an employee due to a work-related dispute, the employee could seek workers’ compensation benefits and also sue the employer for the injuries suffered in the intentional attack.

In specialized circumstances, the employer and its carrier/TPA may have an ‘option’ with regard to payment of benefits under either workers’ compensation or general liability. For example, if an employer has an employee become injured as a result of slipping on ice and snow while working on company property, it is possible that you might successfully deny the claim for workers’ compensation benefits only to then face a premises liability or other general liability lawsuit which is possibly much more expensive to defend and potentially explosive due to the unpredictability of jury awards.

The employer can ‘opt’ not to fight the workers’ compensation claim and voluntarily pay workers’ compensation benefits which should block any third party claim against the employer if the employee knowingly accepts such benefits.

            B. Illinois jurisdiction

Once it has been established that the claim properly involves workers’ compensation benefits, the adjuster, attorney, or risk manager must determine whether Illinois is the proper jurisdiction for the claim to be heard versus a different state or the federal government.

It is critical to understand a claimant with a single injury, a worker could have a claim for workers’ compensation benefits in a multitude of states. The employer should receive ‘credit’ for any benefits paid in any state under the full faith and credit clause of the United States Constitution and not have to double or triple pay multi-state benefits. There is not much guidance on this legal principle, as such issues aren’t litigated often.

But remember, payment of Illinois benefits does not necessarily block the filing of a claim in another state or states. Conversely, the filing of a claim in another state for benefits or the receipt of such benefits does not preclude an Illinois claim.

Illinois has proper subject matter jurisdiction if one of the following tests are met:

            1. The accidental event occurs in Illinois. This concept applies even if the employee executed a written agreement prior to employment to only seek benefits in another state or forum;

            2. The accident occurs outside Illinois but the ‘contract for hire’ was formed in Illinois. This is the tactic most commonly used to bring out of state claims into Illinois. The contract for hire is said to be finalized where the employee ‘accepts’ the offer of employment which leads to a number of factual disputes;

            3. Employment was ‘principally localized’ in Illinois. This is utilized when the employer may have an out of state headquarters for employees who actually perform the majority of their work in Illinois. This situation frequently occurs in trucking claims where the petitioner establishes the principal localization of work in Illinois by logs indicating the aggregate number of miles driven in Illinois versus other states. There are also cases that hold where work is “centered” in Illinois—employment may be established here so as to create jurisdiction. The concept of “centered” work would mean the employee comes to or calls for assignments in Illinois but does most of their work outside the state.

Please also note the employment cannot be for the various branches of our federal government, nuclear industry or U.S. armed forces. Such workers are exclusively covered by the federal OWCP or Office of Workers’ Compensation Programs. State law does not regulate WC benefits for such workers.

Other factors sometimes cited by the Commission and the courts in subject matter jurisdiction claims include the state of petitioner’s residence, the location of the principal work site and the level of business conducted by the employer in Illinois. These concepts are not contained in the Illinois statute and shouldn’t be germane. The facts are sometimes utilized by the Commission or courts stretching to find jurisdiction by looking for factors considered in other areas of law involving jurisdictional fights.

            C. Pre-injury agreements with regard to jurisdiction

Several years ago, this was an interesting trend among some employers but has waned in recent years. We caution you to be wary of pre-injury agreements to have an employee select or agree to the jurisdiction where benefits will be received upon suffering an injury. We have seen employers with multi-state operations or traveling employees routinely require employees to execute such agreements.

These documents will generally be ignored in Illinois and do not have any real legal effect in this state. However, we are not aware of any prohibition in any state with regard to such agreements. If they are designed to confuse unsuspecting workers after they suffer injury, they may be considered an attempt to defraud the worker of benefits under the law and we consider them unethical for that reason.

It is possible an employee or their attorney will not become aware of his or her ability to make a claim for benefits in Illinois and may act consistent with the agreement with regard to jurisdiction. If workers’ compensation benefits will be paid timely in the state that they have agreed to and a dispute does not arise, this concept may be successful.

           D. ‘Multi-state settlements’

Also, when any workers’ compensation claim is settled, you may attempt to block the filing of other claims by indicating that the settlement is for claims in any state. This technique is employed more for the perception of the employee and his attorney than for its legal effect. Most IL Arbitrators won’t approve such agreements.

For technical reasons which do not bear repetition, this concept probably wouldn’t be legally effective. It does leave petitioner and his counsel with the sense that closure has been reached and may cause them to refrain from filing subsequent claims in other states.

For neophyte lawyers, please remember you can’t ethically provide legal advice and counsel about workers’ compensation rights in states in which you aren’t licensed. If you are asked to do so, you need to tell the client of this concern or join with the client in seeking assistance from a licensed lawyer in the other state.

            E. Insurance Policy Coverage

The adjuster or risk manager must also consider whether the specific policy written for the employer to cover the injured worker covers the loss. The date of accident or disability must fall within the dates/states of coverage although this issue becomes clouded in repetitive trauma claims where no specific incident is identified. It is not uncommon for two or three different insurance carriers to argue the actual manifestation of onset of pain occurred during a different carriers’ policy.

If a coverage question is precipitated by the lapse of the workers’ compensation policy prior to the accident taking place, the insurance carrier must prove the policy was properly terminated. This requires notice to the employer/respondent as well as the IL Workers’ Compensation Commission. Otherwise, the Workers’ Compensation Commission may require extension of coverage through the date of accident to ensure the injured party gets WC benefits.

An additional consideration in policy coverage is the employment position of a given petitioner. If petitioner is a sole proprietor, owner or partner of a business, it is legally possible for such executives to opt out of insurance coverage for injuries and thereby save the premium cost. If there is no election for coverage, the principal may not be entitled to workers’ compensation benefits paid by the carrier. This does not mean WC benefits might not be sought—they would just be not covered by the insurance policy, but by the company the executive worked for. This also might not affect any other common law rights available.

One interesting quirk in Illinois workers’ compensation claims practice is the insurance carrier may be named as a party respondent by petitioner in filing the application for adjustment of claim. This is a little-known and rarely used facet of the IL WC Act. In Section 4(g) of the Act, the employee may join the insurance carrier as “a party to the proceedings in which the employer is a party and an award may be entered jointly against the employer and the insurance carrier.” If there are concerns about the financial status of the employer, it may be a prudent thing for the attorney for a claimant to include the insurance carrier as a party to insure any award or settlement is paid.

F. The Statute of Limitations in Illinois Workers’ Compensation

Section 6(d) outlines a relatively unusual statute of limitations for workers’ compensation claims. Generally speaking, a claim for benefits under the Illinois Workers’ Compensation Act will be barred if an application for adjustment of claim is not filed within three years of the date of accident, or within two years from the last payment of compensation, whichever is later.

Most of the confusion with the statute of limitations is based upon the definition of the ‘last payment of compensation.’ If petitioner is receiving ongoing temporary disability benefits, the statute of limitations can be extended indefinitely. In pure theory, the statute might be extended until well after death!

The Workers’ Compensation Commission is very liberal in their definition of payment of compensation and therefore, an adjuster must be careful not to provide payment to the petitioner close to the running of the statute of limitations. Such a payment, whether it be medical, temporary disability, or permanent disability may allow petitioner two additional years from that payment to file an application for adjustment of claim.

Payment of group disability benefits or medical expenses under a group plan might also extend the time for filing an application.

In the landmark ruling in Durand v. IC, 224 Ill. 2d 53, 64 (2006), the IL Supreme Court indicated they would not apply the statute of limitations to bar a claim where the employee “worked in pain” for the period of the delay. In the perspective of many legal observers, the Durand ruling potentially extends the WC statute of limitations indefinitely because any worker could always testify they “worked in pain” for the period of delay in filing.

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

7-16-2019; Illinois WC Death Claim Bungled and Employer Penalized--Consider Better Defense!; Have Your Settlement Contracts Totally Clear on Cutting Off Medical Bills and more

Synopsis: Illinois WC Death Claim Bungled and Employer Penalized.

Editor’s comment: Please consider asking the defense team at KCB&A or me about any IL/IN/WI/IA or MI death claim/concern you might have. I have handled dozens of such significant claims and I know the ropes backward and forward. Getting a newbie defense attorney to handle these multimillion dollars risks who doesn’t know the ropes can cost thousands of unneeded claims dollars. If you aren’t sure, my law partner Shawn Biery’s IL WC Rate Chart outlines most IL WC Death claims are worth $700K+ to a widow/widower and can be over $2M! If you want a free copy of Shawn’s handy IL WC Rate Chart, send a reply.

Please note this claim occurred in year 2013 and hundreds of thousands in unpaid death benefits are probably due to Claimant—I truly feel with my advice that giant payout might have been avoided or ameliorated. If you are interested or are working on a WC death claim, send a reply and I will be happy to provide veteran guidance.

With respect, this IL WC death claim one looks like a smoking mess to me. In Ravenswood Disposal Services v. Illinois Workers' Compensation Comm'n, 2019 IL App (1st) 181449WC (June 28, 2019) Cook Co., WC Div. (opinion by Justice Hoffman), the worker was, while working with Respondent’s equipment/trucks, pinned between 2 vehicles sadly resulting in his untimely death. I cannot see any basis in the ruling for the employer to fight employer/employee but they did so and lost. For diligent members of the Claimant bar who read this blog, if you get a dispute about employment, consider filing a common law claim and protect the interests of your clients and yourselves in doing so.

In Ravenswood Disposal, after fighting employment, the employer fought the medical bills incurred from the passing of Decedent and then disputed the status of the minor child of decedent as a “child” under IL WC law. In my view, there are three types of children in IL WC:

• “DNA kids” who are the genetic offspring of the male/female decedent;

• Adopted kids—the scion has to be legally/formally adopted following the required rules.

• “In loco parentis” children—these are kids that are being maintained/paid for by decedent prior to their passing. The precise definition isn’t truly know but one rule of thumb I have read is the decedent has be providing 50+% of the child’s support.

In Ravenswood Disposal above, Decedent had a “DNA kid” at the time of his passing. After Decedent passed, the minor child came into the care of his mother and another person. The child was later legally adopted by the couple. For reasons I consider odd, the employer then fought the child’s status as a child/dependent of Decedent due to the adoption. I couldn’t disagree with that approach more, in light of the simple language of the IL WC Act.

The Appellate Court, WC Division ruled the employee/Decedent's minor son qualified as a “dependent” under Section 7(a) of the Workers' Compensation Act, even though he was later adopted by his stepfather after his father's passing. The IL WC Act contains no express language terminating a minor's right to benefits by reason of adoption where he otherwise qualified for benefits based on his status as a “child” and age at time of accident.

The ruling notes ample evidence supported the Commission's determination the minor was dependent on his father at the time of the accident. With respect to the members of the Appellate Court panel, I consider this finding wholly irrelevant and confusing in the case of a DNA kid—the status of being the child of a given decedent is all that is required by our law. That status can’t be “extinguished” by a later marriage or adoption. I am happy to explain if you have interest; send a reply.

As outlined above, the unanimous Appellate Court ruling also confirmed the employer lacked a reasonable basis for challenging the existence of an employment relationship, and Decedent's status as an employee gave rise to employer's obligation to pay his medical expenses. Thus, the members of Court ruled it was not irrational for the IL WC Commission to impose penalties and late fees on the employer for failure to pay Decedent's medical expenses. While I am not happy to see penalties levied against an employer, I cannot understand what they were thinking and strongly agree with our Appellate Court panel.

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

Synopsis: Have Your Settlement Contracts Totally Clear on Cutting Off Medical Bills That May Be Owed. Our Best Thoughts for Both Sides of the Entire IL WC Matrix.

Editor’s comment: I want the IL WC industry to note how settlement contracts should be handled by all claims handlers/risk managers. I point out one of the strongest aspects of IL WC law and practice is we have the ability to end/cut off medical bill liability completely. In some of the other states, that can’t happen.

The defense team has a clear protocol on settling any WC claim in any of the five states we cover—we draft the contracts and send for the client to approve from a claim/risk standpoint. When we have approval from our clients, we then sign and send contracts to OC for countersignatures and Arb. approval.

From the perspective of cutting off medical liability, I won’t approve or send a client an IL WC settlement contract that doesn’t limit the client’s responsibility to “treatment of which we are/Respondent is aware” based on an Appellate Court ruling that allowed $40K in medical bills to be presented and paid after settlement approval for care the employer/TPA/insurance carrier had no knowledge.

I consider it malpractice for an IL WC lawyer to not have a cut-off based on the client being aware of the care.

I have seen Claimant lawyers intentionally hide unpaid medical bills until after contracts are approved to then, for the first time, send medical bills and demand payment.

On the other side, if we have the language I recommend in the contracts and our client is aware of medical care/provider and there are outstanding bills after settlement approval—I tell the client we have to pay/process such bills.

Whatever we do, we don’t want to be globally responsible for all medical care up until a certain date because that sets up the “hidden bill” concept.

My law partner Joe D’Amato recommends you/we use this language:

Respondent has paid or will pay all known and submitted reasonable and related medical expenses incurred up to X date. Irrespective of date of service, the parties agree no medical expenses received by Respondent for the first time after approval of these contracts will be paid by Respondent.

What language do you use or recommend? The goal is to be fair and cover what the employer owes while also avoiding “hidden bills.”

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

7-9-2019; Understanding the HIPAA Battlefield in WC; Sedgwick is Acquiring York Risk Services Group and more

Synopsis: Understanding the HIPAA Battlefield in Work Comp.

Editor’s comment: I read a great blog from a Chicago-area Claimant attorney on what he asserts are the rights and rules relating to HIPAA in WC claims. To paraphrase, he indicates under workers’ compensation law, your employer or their insurance company has a “right” to medical records related to your injury. As a result, it’s very common after a worker gets hurt for them to get a letter that asks the worker to sign [and return] a “medical release form” that authorizes them to have access to your medical records.

The blogger indicates these medical release forms are written by insurance companies [and me, one of their lawyers] in a way that favors insurance companies. If insurance carriers/TPA’s could, they’d see every medical record of the worker’s life since they were a baby. Counsel claimed it’s a “fishing expedition” for insurance carriers/TPA’s to look for something that might possibly give them a reason to deny a given case.

The good news is counsel admits insurance carriers and TPA’s are entitled to medical records that relate to work injuries, he then asserts we have “no right” to look at any and all medical records from the injured worker’s life. So, he recommends if a worker want your insurance carrier/TPA to know the worker had cancer or was bi-polar or see what happened when the worker was pregnant, under HIPAA, the worker and/or counsel can restrict insurance carriers and TPA’s from seeing such records.

What is the HIPAA Battlefield?

Counsel confirms when his firm gets these requests, they strike out any language that says “any and all medical records” and their staff replace it with language that limits a medical record request to the accident and treatment that relates to the same body part. He asserts insurance carriers/TPA’s have a “right” to see records from a car accident where a worker hurt their back five years ago if they are claiming back pain now. Counsel also indicates insurance carriers/TPA’s don’t have a right to records from a car accident that hurt your back if you are now claiming carpal tunnel.

My only issue with the great blogger is the continued insistence on asserting there are “rights” or “no rights” on access to medical records following an injury. The advice from the defense team at KCB&A is get all the medical records you can get and try to figure out what is “relevant” in defense of the claim and what is not. A great example of this is a simple rotator cuff tear. Obviously, all records relating to shoulder, arm and hand care would be relevant. Would medical records for treatment for cancer? In my view, it would be critical evidence, as the health of your body is illustrative In managing one WC claim.

The defense team at KCB&A has a great and expansive HIPAA release for your use and consideration. This release has been used across the country for over a decade by numerous insurance carriers/TPA’s and self-insured employers. If you want a free copy, send a reply.

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

Synopsis: Sedgwick to acquire York Risk Services Group

Editor’s comment: Sedgwick has signed an agreement to acquire York Risk Services Group. The transaction is subject to customary conditions and regulatory approvals and expected to close in the latter part of 2019.

York is a premier provider of risk management, claims administration, managed care and absence management solutions. They serve a variety of clients, including corporations, the insurance industry and public entities. The company has nearly 5,000 employees in more than 60 offices across the U.S., as well as a strong international presence. York offers customized claims solutions and has specialized experience to handle even the most complex claims across all liability lines. Their offerings notably complement Sedgwick’s existing market capabilities.

Joining forces with York marks another milestone in Sedgwick’s storied 50-year history of growth and enhances their industry position as a leading global provider of innovative risk, benefits and integrated business solutions. Bringing together the expertise and capabilities of Sedgwick and York will allow them to serve more customers in more places. After the close of this acquisition, the Sedgwick family will be nearly 27,000 colleagues strong!

Until the close of the transaction, York will continue conducting business as usual.

The defense team at KCB&A provides defense work for both York and Sedgwick and all major U.S. TPA’s. We salute them as they grow and thrive.