3-3-14; Adjusting/Managing an IL WC Death Claim; Kudos to IWCC Chairman Latz for Presenting/Teaching; The Election is Near, the Primary Election is Here and much more

Synopsis: Adjusting and Managing an IL WC Death Claim.

Editor’s comment: If there ever is a claim to ask a KCB&A expert for free legal/claims advice, this would be the time. This standing offer is open to attorneys on both sides, adjusters, risk managers and IWCC employees. In dealing with an IL WC death claim, your biggest problem may be the details and minutiae. Hopefully, your organization does not adjust a high number of death claims, making it critical to quickly acquire the needed rules and guidelines for such claims when the occasional fatality comes across your desk. Guidance in the legislation is in Section 7 of the IL WC Act. If you aren’t crystal-clear about anything related to an IL WC death claim, send an email to ekeefe@keefe-law.com on a 24/7/365 basis and we will get you the needed answers. There are some nuances that make handling such claims a challenge. In our view, you do not want to get death benefits wrong and be accused of being unfair to a widow/widower or orphaned children.

As a caveat, please remember there are two aspects of such claims that are different from normal injuries.

      First, if someone passes, you almost always have to report to and deal with OSHA. Be sure to investigate, investigate and investigate to be able to fully document everything for our federal investigators.

      Second, when there is a death in the workplace, you may want to assume everyone around the untimely event of the worker’s passing may also make a workers’ compensation claim for the stress involved in the passing. You may want to offer grief counseling to minimize or assist with such concerns.

      Third, there are very high and moderately unusual maximum/minimum weekly rates involved in IL WC death claims. We will explain that in more detail below.

These are the steps to follow to complete the investigation and set up the claim protocol.

      1. Determine compensability

Most of the time, if someone passes in the workplace, you may be looking at a compensable occurrence. If you, as an adjuster, accept the claim, legal fees may be minimal based on the limitations in the IL WC Act. If you controvert the claim and lose, legal fees can be a lot of money and you could also face penalties/fees. Noncompensable death claims typically involve suicide, unforeseen criminal acts, heart attacks (in some settings), illegal drug use or intoxication. If an autopsy was performed, the report should be obtained. Other factors which may affect compensability include the previous health of decedent and complaints prior to death which bear on the cause of death. Remember that widows and orphans make sympathetic witnesses, therefore make sure you document your investigation thoroughly.  

      2. Confirm the fact of death for your complete file

Obtain the death certificate. Police reports and newspaper articles may be of assistance. Be alert for the possibility of fraudulent or faked death claims. A faked death is a case in which an individual leaves evidence to suggest he or she is dead in order to mislead others. This is done for a variety of reasons, such as to fraudulently collect insurance money or to avoid capture by law enforcement for some other crime. People who fake their own deaths sometimes do so by pretend drownings, because it provides a plausible reason for the absence of a body. We are aware of some countries where they will not provide death benefits if the body is not found because the problem with faked deaths was so prevalent.

      3. Locate/identify one valid spouse and any and all dependents

A good practice to follow is to issue a questionnaire to all known relatives or take statements to determine not only their status as dependents but also to obtain information regarding other potential dependents. Issues relating to the spouse may arise. First, there may be an issue as to whether a valid marriage existed between the spouse and the decedent. On some occasions, multiple individuals may claim to be married to decedent. Common law marriages are not recognized in Illinois but Illinois might recognize a common law marriage from another state.

Obtaining an official marriage certificate(s) is a must. Don’t rely on religious certificates of marriage. A flipside of this issue is whether a valid divorce was entered. Therefore, obtain divorce papers for the deceased and former spouse.

Next, obtain the official birth certificates of all minor children. There may be children not living with the deceased who are still entitled to benefits, as well as adopted and unborn children who exist at the time of death. Birth certificates for all individuals claiming to be children are critical.

For Plaintiff/Petitioner attorneys, remember you can’t bring the claim in the name of Decedent and such a filing is arguably a nullity. Bring the claim in the name of the surviving spouse. Similarly, children aren’t actually parties to the litigation—they take under the name of their parent, guardian or next friend.

4. Determine the death benefit—remember the high minimum and maximum death rates in Illinois

Section 8(b) of the Act seems to indicate workers’ compensation benefits are not to exceed the average weekly wage. However, the weekly benefit in death claims is calculated like the TTD benefit (66-2/3% of the employee’s average weekly wage) subject to the maximum TTD benefit and a minimum of one-half the statewide average wage.

Paragraph 4.1 of section 8(b) indicates the minimum weekly compensation rate for death cases must not be less than 50% of the state average weekly wage. Thus, the minimum changes as frequently as the maximum TTD rate changes. Total compensation payable for death cases is a minimum of $500,000 or 25 years of death benefits whichever is greater. Please note the $500,000 number is a statutory red herring, as the minimum compensation for a compensable death claim in IL is $651,742.00. The maximum is $1,737,983.00.

For the widow(er), Section 7 states the death benefit is payable during the life of the widow(er) until death. If they remarry, and have no children, then they are entitled to a lump sum benefit equal to 2 years of compensation benefits. This lump sum extinguishes their further rights.

If the widow(er) has children from the decedent, then even if the widow(er) remarries, benefits are payable until the youngest dependent child reaches the age of 18 or until the widow(er) dies, whichever comes later. A child under 18 at the time of death is eligible to receive benefits for a period of not less than 6 years, and if a child is enrolled as a full-time student, payments continue until the child turns 25. If a child is physically or mentally incapacitated (incapable of engaging in regular and substantial gainful employment), payments must continue for the duration of the incapacity.

Children eligible to receive benefits under paragraph (a) are defined as children that the deceased left surviving, including a posthumous child, a legally adopted child, a child whom the deceased was legally obligated to support or a child to whom deceased stood in loco parentis. The Illinois Supreme Court has also held that a moral duty to provide support is recognized. Nonetheless, keep in mind that the total compensation payable for the death benefit is 25 years of benefits, if the surviving spouse survives that long. Parents of the decedent may receive benefits only if they are totally dependent upon the earnings of the decedent. Grandparents, grandchildren or collateral heirs must establish dependency upon the decedent’s earnings to the extent of 50% or more of total dependency to receive 5 years of benefits.

      5. What if there is no spouse or children?

A more complex issue arises when the decedent leaves no surviving widow(er) or children. In that event, Section 7 provides for a descending order or list of beneficiaries.

Dependency must exist at the time of the injury. L.M.&O Motor Co. v. Industrial Commission. It is not necessary to show claimant would have been without means of support; the test with regard to contributions of dependency looks to whether contributions were relied upon by the applicant for their means of living and whether applicant was substantially supported by decedent at the time of the latter’s death. Roseberry v. Industrial Commission.If no widow(er), children or totally dependent parents exist then benefits go to children who would not otherwise take under paragraph Section 7(a) and are in any manner dependent or whose parents are partially dependent upon the earnings of the decedent. These individuals are entitled to 8 years of benefits. Interpretations of clauses of the Act like “in any manner dependent” or “partially dependent” are factual questions and therefore you may need a hearing before the Commission to determine the apportionment. If you have no surviving spouse, children or other dependent relatives, the burial expense may be all that is due.

      6. What do you do if a beneficiary dies or later becomes ineligible?

Upon the death or ineligibility of any one member of the class of dependents entitled to compensation, the remaining members of the class succeed to the balance of the award and the employer is liable to pay the full amount of the award as long as there are any members of the class entitled to it. Beckemeyer Coal Co. v. Industrial Commission.

      7. Burial expense

The IL WC burial expense is $8,000. The employer is also obligated for TTD and medical expenses during the life of the decedent, if the latter lived for a period following the accident causing death.

      8. Attorney’s fees

In an undisputed death claim, attorneys’ fees are only $100.00 by IL law. In a disputed death claim, fees are still limited to 20% of 7 years of benefits unless otherwise approved by the Commission. Death benefits provide some of the most complex legal issues and calculations in Illinois workers’ compensation. Due to the high reserves and potential payout, it is critical to know and understand the rules and details with regard to such claims to be confident that you are accurately paying benefits.

There can be lots of other issues. Again, if you have a death claim, we are happy to help; just send an email. We appreciate your thoughts and comments.

      -----------------------------------------------

Synopsis: Great thoughts from our IWCC Chairman for the IL WC Community.

Editor’s comment: We were proud to hear Chairman Michael Latz spoke in an open forum last week in providing what was called the “Chairman’s Update” at the State of Illinois Center. We hope this solid administrator and anyone that may succeed him in the years to come is willing to step before an audience and convey their best thoughts and comments about important legal issues and how the current Commission leadership is dealing with them.

Here is our report on the many issues he covered:

1.    It has been three years since the 2011 Amendments to the IL WC Act. Chairman Latz pointed out advisory rates have dropped 13.3% in that time along with a 5.8% reduction that just took place on January 1. 2014. Everyone hopes the major IL WC insurers have matching reductions in premium dollars.

2.    While we aren’t big fans of the scientific or practical value of the “advisory rate” thing, there is no question Chairman Latz has accurately pointed out WCRI research documents medical prices/reimbursements in Illinois have dropped 24% in the past three years. This savings has to be around $1B for Illinois business, as medical costs are typically the highest overall cost in any workers’ compensation claim. The current administration gets kudos for their hard work in making these solid changes to our law.

3.    Chairman Latz indicated there are three pending bills of interest to IL employers

a.    HB 4189 sponsored by Rep. Dwight Kay that allows health care providers to file liens on WC claims/awards to insure payment;

b.    HB 5792 which requires employers to file a “statement” regarding termination of an employee covered under the IL WC Act;

c.    HB 3470 that covers controversial issues such as causation, AWW, the Interstate Scaffolding“you-owe-TTD-if-you-fire-a-miscreant-on-light-duty” ruling and the Will County Forest Preserve“shoulder-is-body-as-a-whole” ruling. (The comments in quotes are not thoughts from Chairman Latz but your opinionated and sometimes biased editor).

4.    Chairman Latz addressed the interesting question of whether there is an attorney fee cap on wage loss differential benefits based upon the language of Section 16 of the IL WC Act. The IWCC is taking the administrative position there is such a cap. As academicians, we strongly agree with their position.

5.    The question of admissibility of a proposed decision as evidence was analyzed and the Chairman indicated such documents are simply proposals and not binding on either side. Again, we strongly agree with this position.

6.    Our Chairman reviewed the Illinois Rules of Professional Conduct and Administrative Code about who may appear before a hearing officer and under what circumstances. He also discussed how everyone should comport themselves when at the Commission. We feel every Chairman should always do precisely what Chairman Latz did to emphasize the strong need for appropriate, ethical and professional behavior by all parties. We hope everyone will know and closely adhere to such rules.

7.    Finally, Chairman Latz quoted our 16th President: “Persuade your neighbors to compromise whenever you can. As a peacemaker the lawyer has superior opportunity of being a good man. There will still be business enough.”Abraham Lincoln, 1850.

We again salute our Chairman and hope he continues to lead in this fashion moving forward. This article was researched and written, in part, by Michael Shanahan, JD. We appreciate your thoughts and comments. Please post them on our award-winning blog.

            ------------------------------------------

Synopsis: Concerns Raised about 12% Interest on Unpaid Medical Bills in IL WC Upon Settlement. What Do You Think is The Optimal Approach to Avoid Further Litigation?

Editor’s comment: We are further researching this issue and should have a more detailed analysis next week but we want to let the IL WC business/insurance community know of a new, rising concern about closing claims via settlement. Many IL WC Lump Sum settlement contracts leave the issue of unpaid medical bills moderately unstated. Either Petitioner takes over full liability if the matter was disputed or Respondent agrees to pay reasonable, necessary and related medical bills pursuant to the IL WC Medical Fee Schedule.

The issue that we have seen is what about statutory interest on medical bills? The recent amendments to the IL WC Act now make unpaid medical bills subject to a 1% per month interest charge. In our view, interest starts to accrue when coded bills are sent by the medical providers to the payers. Please note a medical bill of $100,000 that isn’t paid timely would add $12,000 per year in statutory interest.

We don’t want either side to get sued or see our many KCB&A hospital clients have to sue to collect what may be due. We would appreciate your thoughts and comments about how to have that issue fairly resolved at the time of a lump sum settlement.

            --------------------------------------

Synopsis: The Election is Near; the Primary Election is Here!

Editor’s comment: The March 18, 2014 Illinois statewide primary is upon us. For the Gubernatorial Primary Election, Early Voting will take place March 3 - March 15. No more excuses are needed to vote early—all you have to do is go in and vote. You need only to fill out an application at the  Early Voting site.

The biggest and most important contest to affect the workers’ comp system is the race for governor. Governor Pat Quinn is facing a primary challenge from neighborhood organizer Tio Hardiman who is a relatively unknown candidate. If Governor Quinn prevails, we assume things will then start to heat up between him and his Republican opponent as we move to the statewide election this fall. If Governor Quinn is able to win in November, we assume the administration of the IWCC will remain about the same.

On the Republican side, the leaders appear to be Bruce Rauner and Kirk Dillard. As you read this, Bruce Rauner holds a 2-to-1 lead over Mr. Dillard with no signs of slowing down. Over the weekend, we heard Evelyn Sanguinetti speak. Evelyn Sanguinetti, is the leading Republican candidate for lieutenant governor and Bruce Rauner’s running mate. Like your editor and our law partners, John Campbell and Shawn Biery, she is an adjunct professor of law at The John Marshall Law School in Chicago.

Ms. Sanguinetti is a woman, Hispanic and a Republican who’s not afraid to talk about the need for safety net programs. Her mother was a refugee from Castro’s Cuba who had her at age 15. Evelyn grew up in poverty near Miami, relying on food stamps, free school lunches and the rest. She ended up as a successful and hard-working lawyer who was appointed an Assistant Illinois Attorney General and just recently won a seat on the Wheaton City Council. She says she will go after the state-wide Hispanic vote full throttle. “Most of them are Republicans,” she says, “they just don’t know it.”

In our discussions with Ms. Sanguinetti, we are certain she will bring a strong, compassionate and fair focus for the Illinois Workers’ Compensation Commission. She wants injured workers to be treated properly and fairly. She understands the need for prompt coverage and payment of work-related medical bills. She wants Illinois employers, large and small to accommodate injured workers and return them to the workforce whenever possible.

In our view, the strongest aspect of the candidacies of Bruce Rauner and Evelyn Sanguinetti is they can’t be bribed. Unlike the last several IL governors, they owe literally nothing to special interest groups. They will do their best to find the top candidates for government agency heads, contractors, counselors and providers for IL taxpayers. We are also confident they will address the biggest problem faced by state government and IL taxpayers—we are paying and owing more money to people that used to work for government than we are paying for current state workers.

However you see things, we urge all of our readers, clients and other observers to exercise your franchise and vote.