June 2024; Staggering New Judicial Increase to PTD Claims in Illinois; New IL WC legislation and more

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Synopsis: Navigating the Impact of American Coal Company v. Illinois Workers’ Compensation Commission: Important Insights for Defense Attorneys, Claims Handlers and Risk Managers. Please note, after 31 years of writing this “blog,” this is the first KCB&A Update that employed AI or Artificial Intelligence!!!

 

Editor’s comment: The recent ruling in American Coal Company v. Illinois Workers’ Compensation Commission et al. (2024) by the Appellate Court of Illinois, Workers Comp Division, marks a pivotal moment in our State’s workers' compensation law and practice. This decision, which upholds a comprehensive and extraordinary award to Claimant, David McCain Jr., has profound implications for WC defense attorneys, claims handlers and risk managers. As we delve into this case, we’ll explore the Court’s unusual legal reasoning, the implications for our industry, and practical steps for navigating similar claims in the future.

 

Case Snapshot: The Injuries and Claims

 

Petitioner David McCain Jr. was an underground coal miner for American Coal Company, and suffered life-altering injuries on November 5, 2016. Our sympathies go to him and his family.

 

The unfortunate accident led to total blindness, severe abdominal injuries requiring multiple surgeries, spine fractures, and psychological trauma. McCain’s pursuit of workers' compensation resulted in an IL WC Arbitrator awarding him both permanent total disability (PTD) and significant “unscheduled” permanent partial disability (PPD) benefits. This “dual award” was challenged by Respondent American Coal Company, leading to the recent IL Appellate Court, Workers Comp Division decision.

 

As a court observer, I strongly question why this serious but truly simple claim was tried/then unnecessarily appealed to three more levels to lose badly each time and create very poor precedent for Illinois businesses and local governments. I suggest to defense counsel in such claims—settle at the Circuit Court level to avoid having a “rubber stamp” which is then published (or non-published?) from a unanimous IL WC Appellate panel.

 

Key Legal Issues and the Court's Rationale

 

Nature and Extent of Injuries:

 

  • McCain was awarded PTD benefits for his blindness under section 8(e)(18) of the Illinois Workers' Compensation Act. That part of this award is simple.

  • In addition, he received unscheduled PPD benefits for his spinal, hip, abdominal, and head injuries under sections 8(d)(2), 8(c), and 8(e) of the Act. The “additional” benefits are impossible to predict/define and they are challenging. If you want to better understand the new challenge, please keep reading or reply via email.

 

Employer's Argument:

 

The American Coal Company argued Claimant McCain should not receive PPD benefits for non-scheduled body parts or “body as a whole” in addition to PTD benefits for blindness. Such benefits are now starting to appear more and more like “pain and suffering,” as a blind person doesn’t really have measurable industrial loss other than the obvious loss of vision.

 

And while we are on it, how does one accurately measure and/or reserve for loss of “body as a whole” in such a setting—does such claimant receive lifetime permanent total benefits and 100% BAW and 100% of all other affected body parts? Doesn’t the fact of blindness mandate 100% loss of everything?

 

The Appellate Court, WC Division cited the Illinois Supreme Court’s decision in Beelman Trucking v. Illinois Workers’ Compensation Commission, contending the Beelman ruling outlines the IL WC Act permits recovery under section 8(e)(18) and scheduled losses, but not for non-scheduled losses. In Beelman, claimant sadly lost both legs and one arm and after more than a decade of litigation, he was provided both a statutory total and perm plus 100% loss of some of the absent limbs. While that was a gigantic award, like this one, it was somewhat predictable and the insurer/employer could more accurately reserve for that loss.

 

From the outside looking in, this Respondent in McCain didn’t strongly mind paying for a PTD and 100% loss of use of the eyes that appear to “double” the award at a very high and unpredictable cost to the employer.

 

When the IWCC and courts know the award is doubling benefits to add lifetime benefits and the scheduled loss of the individual eyes and lots of other things, it is almost impossible to predict what a fair award might be. As I said above, for literally decades before these two rulings, a total and permanent award was the “highest” award a living Claimant could receive.

 

Please also note Illinois business and local governments also fund the IL WC Rate Adjustment Fund https://iwcc.illinois.gov/resources/raf.html that can exponentially increase permanent benefits for living Claimants and, in case of death, the spouse or dependents can get also obtain dramatically higher and spiraling benefits by making a claim against this Fund. This money isn’t paid directly by the employer/insurer to Claimant or remaining dependents—it comes from a fund all Illinois employers contribute to.

 

IL Appellate Court, Workers’ Comp Decision:

 

The IL Appellate Court upheld the Arbitrator and Commission’s decision, emphasizing the remedial purpose of the Act—to provide comprehensive financial protection for injured workers.

 

Gene Keefe’s Comments/Thoughts:

 

As a veteran defense attorney, I assure my readers for decades the IL WC Act was read to have a PTD or permanent total disability be an encompassing award that swept other statutory and non-statutory losses into the PTD award. The goal of the initial workers comp act in 1909 was to insure injured/deceased workers and their families were taken care of.

 

With that in mind, I ask the rhetorical question—What if David McCain were to pass from the injuries? Could his estate/dependents then claim 100% loss of use of his fingers, toes, hands, feet, legs, arms and Body as a Whole? Isn’t it a simple fact that a deceased claimant has lost 100% of the use of all of those “parts?” On top of Illinois’ high death benefits, would it provide “comprehensive financial protection” to award each and every part of a decedent’s body? I feel the rationale of both Beelman Trucking and this award would support such a staggering award that I am sure would cause WC claims to skyrocket.

 

What Happened to the IL Legislature and the Agreed Bill Process?

 

Please also note my feeling these staggeringly expensive and unexpected changes shouldn’t be “created” by our courts. Our Circuit, Appellate and Supreme Courts are making unpredictable and immense changes to the IL WC Act without even a nod to the folks we send to Springfield to work together to provide guidance. Part of the legislative process is to consider all the stuff I am writing about on one side or another and find the best path to protect our workers but also look out for the companies they work for. I feel the legislature should bet engaged on this path right now. I also call on the Illinois State Chamber and other business groups to find out what is happening and rein it in to make things reasonable and fair to all sides.

 

The American Coal Company case underscores the importance of a holistic approach in handling workers' compensation claims. As defense attorneys, claims handlers and risk managers, it is crucial to recognize the potential for combined PTD and PPD awards and adapt strategies accordingly. Staying informed about judicial interpretations of the IL WC Act is essential for effectively managing risks and ensuring compliance in an evolving legal landscape.

 

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

 

 

Synopsis: SB 1996, Workers Compensation was signed into law by Governor Pritzker. Guess what?—It doesn’t have anything of value for Illinois business or local governments.

 

Editor’s comment: This bill amends the Illinois Insurance Code and it provides for increases in the rate of the annual Illinois Workers' Compensation Commission Operations Fund Surcharge.

 

Please remember Illinois is going to remain a “blue state” for decades to come. In my view, this State is not a democracy. If you are not sure why I say that, send a reply. Things like this legislation that doesn’t help IL businesses or local governments at all will remain the norm.

 

Along with the changes above, the new legislation also amends the Workers' Compensation Act, as it provides for increases in the rate of the Illinois Workers' Compensation Commission Operations Fund Fee and payments to the Rate Adjustment Fund. I am fairly sure the first increase is going to cost Illinois business more to pay for the IWCC operations. The second part of the bill puts more money in the Rate Adjustment Fund that continues to force Illinois business to pay cost of living increases to death and total and permanent disability beneficiaries.

 

The bill also provides for transfers from the Self-Insurers Security Fund to the Illinois Workers' Compensation Commission Operations Fund, to the extent that there are insufficient funds in the Illinois Workers' Compensation Commission Operations Fund to pay the operating costs of the Illinois Workers' Compensation Commission or the salaries and benefits of employees of the Illinois Workers' Compensation Commission. You may recall our hearing officers got salaries that are tied, to some extent, with the salaries of Circuit Court Judges/Justices. If you aren’t sure this means all of these hearing officers are given substantial annual increases without having to ask the IL legislature to take action.

 

The legislation also makes changes in provisions concerning the collection of civil penalties or reimbursements for amounts paid by the Injured Workers' Benefit Fund due under an order of the Illinois Workers' Compensation Commission.

 

The bill makes changes to penalties for any person, company, corporation, insurance carrier, healthcare provider, or other entity that intentionally prepares or provides an invalid, false, or counterfeit certificate of insurance as proof of workers' compensation insurance or intentionally assists, abets, solicits, or conspires with any person, company, or other entity to intentionally prepare or provide an invalid, false, or counterfeit certificate of insurance as proof of workers' compensation insurance.

 

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