Is anyone getting tired of living here? Does the Commission notice there is a recession going on while they keep raising WC rates?
Editor’s comment: Sometimes it starts with a small thing. This week, we learned the Illinois PPD maximum rate had been increased on the IWCC website without any prior notice to industry folks like you and me. Actually, one of our sharper clients noticed it before we did. We also got an email from a top-notch defense attorney in Rockford who was advised by his clients of the change. He was nice enough to relay the information so we could update our website and our partner, Shawn Biery’s Illinois WC rate sheets. By the end of the week, an IWCC email update was sent and the change made the IWCC news.
We think the administrators have made a similar mistake to the problems faced with implementation of the 2005 Amendments to the Workers’ Compensation Act—changes to the law are effective as soon as they are made. It is our legal opinion they can’t simply “white-out” the old interim rate as they appear to be trying to do—it isn’t that simple a change. The rate of $643.82 is and remains the effective rate for the period it was posted on the web. We think the IWCC has to put an asterisk or something to let the public know of their claimed error and its purported “correction.” Cases subject to the PPD maximum for dates of loss from July 1, 2008 to March 12, 2009 that were settled or tried during the period from the posting date of the $643.82 number until the posting of the new number and have reached final disposition are set at the $643.82 amount. It is our legal opinion you don’t have to reopen settlement contracts or modify final arbitration decisions from the period of January to March 2009 to send claimants and their attorneys more money now. Yes, we understand this is confusing—we didn’t create the confusion and hope there is no litigation to resolve it.
At present, we want all of our Illinois clients across the country to know you now have to again reset all PPD reserves for all active claims with dates of loss from July 1, 2008 to present. Please don’t shoot the messenger for this comedy of errors. If you don’t understand what you need to do, please send a reply.
Then the wheels started turning. The old max rate was $636.15 and, as we outline above, it was initially increased to $643.82. This was an increase of $7.67 a week which we consider somewhat normal, even understanding 2008 wasn’t a great year, particularly in the second half. The new increase takes the PPD maximum to a whopping $664.72. This is a one-year increase of $28.57 or about 4.5% in one year! Such an amazing leap creates substantial concern by the members of this firm for a number of reasons.
First, what heavy hitter has the political power to “correct” clerical errors of this nature? We have never seen anyone increase the published PPD maximum since we started spiraling our rates in the mid-1980’s. We also point out the new PPD max rate is only good through June 30, 2009—we are nine months into the current amount! We are sorry to report our skeptical view but we simply don’t believe it—we think this was done because the “wise guys” who secretly run the Commission wanted PPD rates higher and assume the masses won’t care or are too stupid to understand their insider actions.
We truly seek a formal inquiry about this late and unnecessary change. We also again ask the Commission itself or our legislature to seriously consider freezing all WC rate increases while Illinois recovers from the worst recession of our lifetimes.
In reviewing what just “hit us,” we are certain the Commission itself didn’t meet to discuss the confusing change and its nuances—they almost never meet. We are also certain the IWCC advisory board didn’t mandate the giant new increase—it wasn’t on their published agenda for any meeting. We feel someone may have secretly put the arm on someone to make this unprecedented change, like all the other secret stuff we see all the time at the IWCC. If we are wrong, we ask for someone to prove us wrong and show us their math.
Second, there is no chance, none that Illinois wages went up 4.5% across the state last year. If anything, wages dropped dramatically by year-end. At a continuous increase of 4.5%, Illinois wages will supposedly double in 16 years. Trust us, wages in this state aren’t doubling every other decade.
Most important, we are now looking at state government raising our income taxes by 50%. The chances of that happening are almost certain—the state is running at an $11.5 billion deficit. We are worried Governor Quinn is living in a fantasy land when he easily tells us we have to live with record high income taxes when some of our sister states have no income taxes. We are also thrilled to hear he wants to cut spending without any defined plan to do so. Trust us, Gov, the workers’ compensation costs in this state for state workers are spiraling wildly out of control. It isn’t hard to check—go to the IWCC call sheets and search “State of Illinois” or “St of IL” and you will find each call has 5-100 claims in litigation by State of Illinois employees. We would estimate the Kankakee call alone has about 500 cases currently pending. We would estimate there are 5-10,000 pending WC claims for Illinois state employees!!! We are also certain the cost to Illinois taxpayers is well into the billions. Well, guess what, they just raised their permanency maximum rate, affecting all of those thousands of claims.
Cook County government is also facing record deficits and we can be sure they will have to find new revenue sources within a year of hitting county residents with the highest sales taxes in the world. Numerous county employees are filing lost time WC claims and we have seen no true efforts at workers’ compensation cost control for the county. Their PPD maximum rate just went up, affecting all of their claims.
The Chicago Public Schools are about $500 million in debt. We applaud new manager Ron Huberman who is trying to hold the line on real estate taxes. He is specifically targeting rising workers’ compensation costs as a management goal. He will also have to deal with higher WC rates that will certainly affect all of his claims.
Finally, the City of Chicago continues to see spiraling WC costs. The City steadfastly refuses to provide light work or to perform surveillance of WC claimants, claiming neither strategy saves costs. Well, we assure the City fathers every other major employer in Illinois uses such concepts and saves millions of dollars doing so. The City of Chicago needs to fund legal “ghost payrollers” because they need 20-30% more workers to staff any position because for every ten city workers, two or three are out on WC benefits at any given time. And now they will have to battle higher max PPD rates.
We continue to hope these government bodies will start to pull out of the rut they clearly are in and not make a bad recession even worse with new record high taxes while Illinoisans try to fight the good fight in the private sector. We seek your thoughts and comments.
