2-27-2017; Two New IL Commissioners Appointed--Will The Process Ever Open Up?; Does IL WC Truly Need All These Administrators; New Jersey Limits Opioid Use--Shouldn't You? and much more

Synopsis: Two New IL WC Commissioners Appointed. Will Illinois Ever Open Up the Selection Process?

Editor’s comment: On February 24, 2017, Governor Bruce Rauner filed the following new appointments to the Illinois Workers’ Compensation Commission: 

Defense attorney L. Elizabeth Coppoletti to replace Commissioner Mario Basurto and Arbitrator Deborah Simpson to replace Commissioner Ruth White. 

Click to view the letters.

I continue to hate the “secret squirrel” method of hiring hearing officers in a fashion where you and I first learn about the selection long after the decision has been made. In other states outside Illinois, openings for such positions are advertised, resumes accepted for consideration and an open vetting process takes place. In Illinois, even under a reformer and iconoclast like Bruce Rauner, we still have secret, back-door politics to choose the folks that control our multi-billion-dollar workers’ compensation system.

One has to wonder if Governor Rauner or his team discussed his eternal need to lower IL workers’ compensation costs with these new appointees.

One also has to wonder how anyone thinks the current secret system for selecting our administrators looks like anything other than more politics, politics, politics. You clearly have to know someone who knows someone because all the gossips, tipsters and sources I have around the IL WC Commission weren’t aware of these openings, much less the appointments until late today.

The lawyers, staff and friends of Keefe, Campbell, Biery & Associates says farewell and adieu to former Commissioner Ruth White who started working at the good ole Illinois Industrial Commission back in 1979. I still remember the first time I appeared before former Arbitrator White, she had a court reporter that would talk into a cone to record the hearing—the reporter would later type up her recording. It was an oddity I have never seen again in the state or federal courts. It is our assumption former Commissioner White will take one of Illinois’ golden and unfundable gov’t pensions that should pay her 85% of her highest annual salary to start with 3% compounded annual increases and lifetime health care coverage. With all those retirement perks, why keep listening to all the whining as a hearing officer, some of which comes from Claimants?

We also wish all the best to former Commissioner Mario Basurto who came from Liberty Mutual’s house counsel operation directly to become a Commissioner. He learned very quickly on the job and generally did solid work in a tough position.

New Commissioner Elizabeth Coppoletti comes from the IL WC defense industry and knows the IL WC Act and Rules backwards and forwards. We consider her a leading IL WC legal authority. She oversaw the preparations of briefs and other filings at various levels of the appellate process and handled oral arguments at all judicial levels. We are certain she will be a solid administrator.

New Commissioner Deborah Simpson of Kane County has more than 25 years of government and law, having served since 2000 in the Office of the Illinois Attorney General’s Administrative Review / Civil Prosecutions Unit. Previously Ms. Simpson was attorney at the State’s Attorney’s Offices for Kane, Vermilion and Cook Counties. She has been a part-time instructor at the Danville Area Community College, and is a member of several community organizations. She holds a J.D. from the John Marshall Law School and a B.A. from DePaul University.

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

Synopsis: Does IL WC Truly Need All These Administrators?

Editor’s comment: I was quoted in the Madison County Record this past week for my stance on the need for less government in this nutty state.

http://madisonrecord.com/stories/511082985-workers-comp-attorney-praises-wisconsin-governor-for-proposed-elimination-of-review-board#.WLSETRKYx04.email

As you read this, all the simple and undeniable metrics for Illinois government point to financial Armageddon or something like it. We have over $12 billion in unpaid state government bills with state vendors either suing or going broke or both. That number is expected to double before the next statewide election in 2018. The State of Illinois also has government pension debt at $130 billion and growing by millions each day. IL State government credit rating is abysmal and getting worse by the minute. Take a look at Moody’s https://www.moodys.com/credit-ratings/Illinois-State-of-credit-rating-600024371. This isn’t a Republican or Democrat issue—it is simple math, folks! Now is the time to get serious about cutting government costs and spending. If we don’t, I assure all of my readers they are going to have to raise already wildly high state income tax and real estate taxes and impose higher tolls and fees and do lots of stuff that will drive more paying taxpayers away, making the problems even more acute.

In the IL WC system, our administration grew and grew and grew more over the last twenty years while at the same time, IL WC claims continue to drop.

This is from page 7 of the IL WC Commission’s 2015 annual report http://www.iwcc.il.gov/FiscalYear2015AnnualReport.pdf. You will note they assert about 50,000 new IL WC claims are filed each year—I am betting the actual number is about 45,000. Fifteen years ago, that number was around 75,000 new claims. IL WC claims have an average shelf-life of about three years so there are around 135,000 claims in this system, down from 225,000 just fifteen years ago.

I don’t believe the math (as I am sure it is high) but they say 1500 cases are decided at the Commission level each year. We will start with those numbers for this analysis.

The Commissioners typically don’t hear any testimony or take evidence. They read the Arbitrator’s ruling, consider briefs filed by the parties, listen to oral argument and write decisions.

There are currently nine IL WC Commissioners with two full-time attorney assistants. There are a total of 27 attorneys working at this administrative level—9 Commissioners who each have two attorney aides. Their combined salaries are around $3M a year. All that money comes from a levy on IL business. If you just use their numbers above, the 27 lawyers at this level would by themselves only decide about 55 cases per hearing officer/aide a year—that is about one ruling per lawyer each week. Some of the rulings are a page, most are three to five pages. In my view, that is less than a full day’s work.

In the past, the Commission used to report about one-half of these rulings were summarily affirmances—when the Commissioner or their aide summarily affirm the Arbitrator’s decision, after considering everything, they simply agree with and adopt the Arbitrator’s decision. If they summarily affirm one-half of the Arbitrator’s decisions, simple math indicates the 27 lawyers are deciding about one contested case every two weeks.

To me and with respect to all of them, that means we have too many hearing officers at this level. If they cut this group down to six Commissioners, the savings would be about $900K in salary alone.

If they get serious about efficiency, I am sure three Commissioners with two attorneys assistants could also do the same job if they do what you and I call “hard work.” I hate to say it but we also could get along with fewer Arbitrators, if we continue to have fewer and fewer claims to adjudicate at the primary level. I still remember when IL WC had less than 15 Arbitrators handling claims across the State—we now have around 30 or double that amount for about half the claims.

In summary, at some point, Illinois is going to have to mark hard decisions about our soaring gov’t debt, unpaid gov’t bills and spiraling taxes. If we don’t start cutting government and doing something to make things more efficient and effective, the world may correct this for us and not in ways we would like or choose.

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

Synopsis: Should Your State Limit Opioid Use in All Medicine to Include Workers’ Comp Claims?

Editor’s comment: We salute New Jersey Gov. Chris Christie who recently signed into law a bill that limits initial prescribing of opioids for acute pain to a five-day supply, in what is being called our nation’s strongest opioid reform. Senate Bill 3 also requires insurers to cover treatment of substance use disorders that has been deemed necessary by the patient’s physician, psychologist or psychiatrist. It spells out requirements for opioid prescriptions following the initial supply and mandates opioid education for prescribers.

The bill sailed through the New Jersey Legislature in a matter of weeks.

“A five-day limit on initial opioid prescriptions will be imposed, lowered from 30 days, which is the current law, and most of you know that most physicians write 30 days automatically, no longer,” Christie said in signing the bill on Feb. 15. “Five days is now the initial that they can write it for.”

Several other Northeastern states, including Massachusetts, Connecticut, Maine, New York and Vermont, have enacted limits on initial opioid prescriptions of seven days.

The requirements in New Jersey SB 3 include a requirement for doctors to document a patient’s history of opioid use, before writing the initial prescription, as well as their response to non-opioid therapies including alternative drugs or non-drug treatments.

The Medical Society of New Jersey asked lawmakers to carve out an exception for post-surgical patients, allowing an opioid prescription to cover up to 14 days. After major surgeries, the Medical Society asserts a patient may risk rupturing sutures if they have to go to see the doctor for a refill of pain medications. The bill was not amended to accommodate the request.

In Maine, a proposal to limit initial opioid prescriptions to a three-day supply for acute pain and 15 days for chronic pain was changed to seven days and 30 days, respectively, in response to concerns from the Maine Medical Association, according to an article in ACP Internist, a publication of the American College of Physicians.

Workers’ compensation drug formularies may limit the number of days for opioid prescriptions in which preauthorization is not required.

In New Jersey, Christie is reportedly devoting his final year in office to the opioid crisis. The Republican governor is set to leave office in January 2018 due to term limits. 

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

Synopsis: Illinois WC Rates Jump Again and Your PPD Reserves Need To Be UPDATED RETROACTIVELY(!). Send a Reply to Get a Free Copy of Shawn R. Biery’s Updated IL WC Rate-Sheet!

Editor’s comment: There continues to be an upward spiral of IL WC rates. As mentioned twice every year, starting in the 1980’s, the IL WC Act provides a formula which effectively insures no matter how poor the IL economy is doing, our WC rates keep climbing.

We caution our readers to pay attention to the fact the IL WC statutory maximum PPD rate is now $775.18. When it was published, this rate changed retroactively from July 1, 2016 to present. If you reserved a claim based on the prior rate for the period from July 1 to right now, your reserves are wrong. If you have a claim with a date of loss after July 2016 and a max PPD rate, you need to take a look and see if the new maximum PPD rate applies. WORD OF CAUTION: There is pending legislation which Gene reported last week and this week which currently states “The maximum compensation rate for the period July 1, 2017 through June 30, 2021, except as hereinafter provided, shall be $755.22. Effective July 1, 2021 and on July 1 of each year thereafter the maximum weekly compensation rate, except as hereinafter provided, shall be determined as follows: if during the preceding 12-month period there shall have been an increase in the State's average weekly wage in covered industries under the Unemployment Insurance Act, the weekly compensation rate shall be proportionately increased by the same percentage as the percentage of increase in the State's average weekly wage in covered industries under the Unemployment Insurance Act during such period.” THIS NEW LEGISLATION WOULD POTENTIALLY CHANGE THIS PPD MAX AGAIN. If this isn’t clear, send a reply to Shawn at sbiery@keefe-law.com.

The current TTD weekly maximum has risen to $1,435.17. A worker has to make over $2,152.76 per week or $111,943.52 per year to hit the new IL WC maximum TTD rate. Does any state in the United States have a TTD maximum that high?

The new IL WC minimum death benefit is 25 years of compensation or $538.19 per week x 52 weeks in a year x 25 years or $699,647.00! The new maximum IL WC death benefit is $1,435.17 times 52 weeks times 25 years or a lofty $1,865,721.00 plus burial benefits of $8K. On top of this massive benefit, Illinois employers/governments have to pay COLA increases.

The best way to make sense of all of this is to get Shawn Biery’s colorful, updated and easy-to-understand IL WC Rate Sheet. If you want it, simply reply to Shawn at sbiery@keefe-law.com or email Marissa with your mailing address if you would like to be mailed a laminated copy at mpatel@keefe-law.com and they will get a copy routed to you before they raise the rates again!

2-20-2017; Governor Rauner Wishes IL WC Could Become Massachusetts??; AG Madigan Loses Bid to Shut-Down State Gov't and the IWCC; IL WC Fraud Enforcement Remains an Embarrassment and more

Synopsis: Governor Rauner Hopes to Rub a Magic Lamp and Turn Illinois Workers’ Comp into Massachusetts?? 

Editor’s comment: We strongly respect our fearless leader in Illinois Governor Bruce Rauner. We truly feel his efforts to make sense of the first- or second-worst run states in the United States would be entertaining if there wasn’t so much at stake. From last week’s budget speech, he said:

To bring good jobs to Illinois, we have to make Illinois a place where it is good to do business. We must fix our workers comp system, labor regulations, liability costs, and property taxes that make us uncompetitive, and push job creators out. The cost of worker’s comp is the biggest factor driving our job losses. If we simply aligned our workers’ comp costs with those of a state like Massachusetts – which is hardly a bastion of conservatism – we can save state and local taxpayers over $300 million per year, while protecting those who suffer workplace injuries, and grow more careers at higher wages.

Let’s get it done!

Other than to point to “The Bay State,” Governor Rauner provided no details or analysis on how to turn our WC system into something Bean-Town might like. Rauner also did not speak specifically about any element of the Illinois budget compromise package. But he said the compromise must include structural changes to avoid future deficits, term limits for state legislators, property tax relief and workers’ compensation reforms that will “get job creators excited.” With respect to Governor Rauner, it doesn’t appear he has a whole lot of solid planning and specifics to bring to the table. We prefer to listen to Wisconsin Governor Scott Walker who actually does his homework and makes concrete proposals to actually save Cheese-taxpayers money.

So All We Have to Do is to Make IL WC into Mas-Cha-Who-Setts??

Well, seems pretty easy to me so I looked up the Massachusetts WC Unit. Not very fancy but seems pretty utilitarian. In the every-other-year rankings by the State of Oregon, Massachusetts WC premiums were 44th out of 50 which is considered dramatically better than IL WC which remains fairly high, tied with Oklahoma at number 7.

So I took a deeper look. Unlike IL WC with its own agency and budget, the Mass WC Unit is a sub-set of the Executive Office for Administration and Finance. We have asked and begged our great Governor to work/fight to consolidate Illinois state agencies from 88 down to about 30, as other states do. Get rid of redundant and do-nothing state jobs. We are still waiting for someone to join with us in asking about it.

We thought Massachusetts wouldn’t have a lot of manufacturing workers—actually, they have a very sizable manufacturing presence. http://www.nam.org/Data-and-Reports/State-Manufacturing-Data/State-Manufacturing-Data/Manufacturing-Employment-by-State-March-2016/

Going back to state-to-state comparisons, Massachusetts WC has a five day waiting period to start work-related lost time benefits. They pay lost time benefits at 60% of the average wage which is less than the IL WC TTD rate at 66-2/3’s. They have a form-based system that typically makes me think their bean-counters are watching what the employers and insurance carriers do. Other than that, from the outside-looking-in, I can’t tell why Mass WC premiums are about ½ of what Illinois pays. I have to believe their traditions/benefits are lower than ours and Illinois needs to continue to make progress in cutting WC costs.

However, we don’t think the Governor is getting great advice on how to cut IL WC costs. As we have written over and over, all he has to do is talk to the IL WC Arbitrators and Commissioner who report to him and tell them to cut our state’s moderate to high WC costs. If they won’t do so, the issue lies with the Governor and not with them—he can find/select and retain new and improved hearing officers in his image and likeness. We are absolutely sure he can save the $300 million a year he wants to save for IL businesses by just doing that—we are happy to meet with him or his team to discuss this in greater detail any time anyone might want. If anyone wants easy legislative and administrative changes/reforms, we promise we have lots and lots of them too.

Another Bi-Partisan WC Cost-Saving Thought—Limit All IL WC Claims to Adjudication by The IL WC Commission?

Right now, IL WC claims can run on and on and on. Either side can clown around for at least three years before the Arbitrator and maybe more if Claimant’s counsel whines enough. After 3+ years, the matter gets tried and then can be appealed, effectively for free and then stall around for about another year “on review” before an IL WC Commission panel. By that time, the case can be five, six or more years old. From there, it can be appealed to the Circuit Court—another year wasted. Then the Appellate Court, WC Division to blow another year. After that, it is possible for a simple WC claim to make it all the way to the IL Supreme Court. As an example of endless litigation, you may note the ruling in Beelman Trucking v. IWCC took about 14 years to become final!

Watching all this over-litigious silliness, please note IL WC claims by many state government employees legally can’t and aren’t appealed to the courts—by law, they get a hearing at Arbitration and then a single appeal. In our view, if this were extended to all Illinois workers, things would move much quicker and outcomes be more certain. Faster and more certain benefits would save IL business and local governments lots and lots of bucks.

We could see a situation where the Commission panel might make a purely legal ruling and the panel ask for a decision by the Courts—that would hopefully be a once or twice a year type thing. If the Commission were to want such legal analysis of their rulings so be it but for decisions on the facts, the idea has always been for the Commission to make the final call and the chips lay where they lay. We see literally no value in clowning around over the “manifest weight of the evidence” in the IL reviewing courts.

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

Synopsis: In A Not-So-Shocker, IL Attorney General Lisa Madigan Loses Effort to Block Pay to State Workers. IL WC Commission to Remain Open for Business.

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Editor’s comment: As we have advised, everything was pointing to an IL government shut-down on Feb. 28. Government shutdown = IL WC Commission shutdown. Problem averted for now.

Late last week, news from St. Clair County came in that our plucky AG, Lisa Madigan lost her effort to put any pressure on the IL General Assembly to actually pass a “Grand Bargain” and institute a budget that might allow for our state’s bills to be paid. The last time we saw the math on this, the unpaid bills were way over $10 billion and rising by the millions each day.

St. Clair County Circuit Judge Robert LeChien refused to reverse a previous court order requiring Illinois to pay state employees in the absence of a spending plan. Madigan argued stopping pay would hasten a budget agreement.

Republican Gov. Bruce Rauner criticized AG Madigan’s legal move, suggesting the daughter of House Speaker Michael Madigan wanted to create a “crisis” that would shut down the government.

“We’re pleased our hard working state employees, who show up to work every day on behalf of the people of Illinois, will continue to be paid,” Rauner Administration General Counsel Dennis Murashko said in a statement, adding he hopes Madigan drops her efforts and allow negotiations in the Senate on a balanced budget to succeed.

Rauner and Democrats who control the Legislature have been fighting over how to balance the budget. Rauner repeated that he will support a tax increase to help close a multibillion-dollar budget deficit, but only if it is accompanied by measures he wants to help businesses, such as reduced workers’ compensation costs.

Democrats oppose Rauner’s agenda, with Speaker Madigan calling it “extreme” and harmful to the middle class.

Without a budget in place, social service agencies, higher education and other programs have suffered. Other spending has continued, however, because of court orders or state law. That has included employee pay.

We will continue to watch and report as this battle unfolds.

Synopsis: Everyone Continues to Note IL WC System Does a Rotten Job Ferreting Out Work Comp Fraud by Workers.

Editor’s comment: The proof is in the pudding—over a decade ago, the State of Illinois criminalized workers’ compensation fraud by workers. Despite the law, the agency created to “bust” WC Fraud by workers has managed only 42 convictions, or fewer than five a year. In short, the Illinois Workers’ Compensation Fraud Unit had three convictions in each of 2015 and 2016. In contrast, the State of Ohio, with 1.3 million fewer residents than Illinois, averages 11 convictions a month.

In 2015, the Illinois WC Fraud Unit dropped to two ineffective investigators, its lowest staffing level in five years, as the number of complaints more than tripled from 100 to 331.

“The WCFU is already in the process of hiring additional investigators; however, this decrease in staff, coupled with the length of time it takes to bring new investigators on board, has already negatively affected the number of investigations opened,” the WCFU 2016 annual report states.

“An increase in the WCFU’s appropriation would allow for the hiring of more investigators, allow for more investigations to be completed, and lessen the impact the departure of a single investigator has on the unit,” it states.

Illinois has been hampered by the lack of a full state spending plan for the past 19 months, the American Insurance Association said. “The budget impasse over the last couple of years, I believe, has restricted the department’s ability to prosecute workers’ compensation fraud,” said Stephen Schneider, AIA Midwest region vice president. “Anything in terms of resources that can assist them ought to be done.”

“We think Illinois should do it tougher and bigger and bolder in pursuing workers’ compensation fraud,” he said. “There’s certainly a lot more that can be done. When you look at states like Florida and Ohio, obviously they’re doing something right.”

Illinois criminalized workers’ compensation fraud and noncompliance for the first time with House Bill 2137 in 2005. HB 2137, which became Public Act 94-277, required the Illinois Department of Insurance to create the Workers’ Compensation Fraud Unit and identified eight specific fraudulent acts, whereas before they were not specifically defined as unlawful. (Those acts are described here.)

The General Assembly beefed up fraud enforcement again in 2011 with HB 1698, which became Public Act 97-18.

The IL WC Act added a ninth prohibition, making it illegal to “intentionally present a bill or statement for the payment for medical services that were not provided.” It introduced a new criminal penalty scheme, gave the WCFU subpoena power and removed the 120-day time limit for the Unit to complete an investigation.

In my view, the lack of any effort to stop IL WC Fraud by workers highlights how odd our state can be. If someone were to steal a large truck, everyone would expect SWAT units to be mustered and the bad guys/gals to be arrested and face heavy penalties. In contrast, if someone creates a phony WC accident or works while on benefits and steals the same amount of money, everyone in government says that is a “civil” matter and the employer should sue the employee in Circuit Court.

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

Synopsis: Illinois WC Rates Jump Again and Your PPD Reserves Need To Be UPDATED RETROACTIVELY(!). Send a Reply to Get a Free Copy of Shawn R. Biery’s Updated IL WC Rate-Sheet!

Editor’s comment: There continues to be an upward spiral of IL WC rates. As mentioned twice every year, starting in the 1980’s, the IL WC Act provides a formula which effectively insures no matter how poor the IL economy is doing, our WC rates keep climbing.

We caution our readers to pay attention to the fact the IL WC statutory maximum PPD rate is now $775.18. When it was published, this rate changed retroactively from July 1, 2016 to present. If you reserved a claim based on the prior rate for the period from July 1 to right now, your reserves are wrong. If you have a claim with a date of loss after July 2016 and a max PPD rate, you need to take a look and see if the new maximum PPD rate applies. WORD OF CAUTION: There is pending legislation which Gene reported last week and this week which currently states “The maximum compensation rate for the period July 1, 2017 through June 30, 2021, except as hereinafter provided, shall be $755.22. Effective July 1, 2021 and on July 1 of each year thereafter the maximum weekly compensation rate, except as hereinafter provided, shall be determined as follows: if during the preceding 12-month period there shall have been an increase in the State's average weekly wage in covered industries under the Unemployment Insurance Act, the weekly compensation rate shall be proportionately increased by the same percentage as the percentage of increase in the State's average weekly wage in covered industries under the Unemployment Insurance Act during such period.” THIS NEW LEGISLATION WOULD POTENTIALLY CHANGE THIS PPD MAX AGAIN. If this isn’t clear, send a reply to Shawn at sbiery@keefe-law.com.

The current TTD weekly maximum has risen to $1,435.17. A worker has to make over $2,152.76 per week or $111,943.52 per year to hit the new IL WC maximum TTD rate. Does any state in the United States have a TTD maximum that high?

The new IL WC minimum death benefit is 25 years of compensation or $538.19 per week x 52 weeks in a year x 25 years or $699,647.00! The new maximum IL WC death benefit is $1,435.17 times 52 weeks times 25 years or a lofty $1,865,721.00 plus burial benefits of $8K. On top of this massive benefit, Illinois employers/governments have to pay COLA increases.

The best way to make sense of all of this is to get Shawn Biery’s colorful, updated and easy-to-understand IL WC Rate Sheet. If you want it, simply reply to Shawn at sbiery@keefe-law.com or email Marissa with your mailing address if you would like to be mailed a laminated copy at mpatel@keefe-law.com and they will get a copy routed to you before they raise the rates again!

2-13-2017; Grand Bargain Remains Stalled--IWCC Still May Close; OSHA Going Quiet on Enforcement-Penalties-Citations; When is a Loss Covered by the IL or Another State’s WC Act? and more

Synopsis: It is February 13, The Illinois Workers’ Compensation Commission and all IL State Offices To Stop Paying Their Workers in Just 15 Days from Today!

Editor’s comment: The “Grand Bargain” to create an IL State budget remains completely stalled. The two parties remain at odds and negotiations are officially going nowhere. Our IL General Assembly and more specifically, the IL Senate won’t be publicly dealing with the issues this week that you or I will be able to watch. Lots may be happening behind closed doors and our sources continue to watch and learn.

Governor Rauner appears to be sitting on the sidelines, hoping for spending cuts and structural change but not making concrete proposals.

Whatever happens, we hope any income tax or other new taxes will be linked to strong curbs/limits on runaway spending, hilariously high government compensation/retirement and appropriations. The main issue is that if curbs/limits don’t happen, just because taxes increase, it isn’t going to “cure” anything to possibly keep pace with a history of years of over-spending.

From all participants on both sides of the IL WC matrix, the odd proposed IL WC reforms appear to be on the sidelines where they belong. The bigger issues of multi-billion dollar debt, unpaid state government bills and skyrocketing income, real estate, sales and other taxes are on the forefront.

We will continue to report any developments as we learn of them. We appreciate your thoughts and comments. Please post them on our award-winning blog.

Synopsis: OSHA Website and Management Going Quiet on Enforcement and Penalties; Focusing On Positives In Workplace Safety.

Editor’s comment: The Occupational Safety and Health Administration is changing its emphasis from enforcement to employer compliance assistance under the Trump administration. As an indication of the change, the U.S. Department of Labor hadn’t issued a single news release regarding OSHA enforcement since Jan. 18, two days before President Trump’s inauguration on Jan. 20.

Before this dearth of enforcement news started, workplace reporters like us would see several OSHA releases every day, detailing strong fines and punitive citations issued to U.S. employers for workplace safety violations. In contrast to the “quiet” from OSHA, the U.S. DOL has continued to issue news releases on other topics.

More may be known about OSHA’s enforcement philosophy when/if Andrew Puzder’s nomination as the new secretary of the DOL is confirmed. Our new President nominated Mr. Puzder, chief executive officer of CKE Restaurants Inc., the parent company of the Carl’s Jr. and Hardee’s burger chains.

Many observers forecast that OSHA under the new administration will focus more on workplace safety education and less on enforcement and punitive action. This move would be a reversal of what was seen under the Obama administration when OSHA staff was moved from training and education into enforcement.

Most veterans again feel the frequency of workplace injuries will continue a long-term gradual decline. From the perspective of Illinois employers, WC claims are steadily dropping.

We are getting lots of questions and gossip about many OSHA rules from the last administration—in response, we predict a kinder, gentler OSHA under the new administration. We are certain you can expect a reversal of OSHA’s recent hike in penalties, or an easing of restrictions on post-accident drug testing and safety incentive programs that were part of a OSHA’s new electronic reporting rule. If you were planning on getting into training or changing your work rules/employee handbooks to address the “old” rules, we recommend you relax and hold off for now.

The electronic reporting itself, in which OSHA would make public safety records of larger employers, was described as a way to “shame” businesses into improving worker safety. To us, that was a facet of the anti-business environment of the old administration. We think it is going, going, gone…

Even if OSHA shifts its focus from enforcement to voluntary compliance, another variable is how states with their own OSHA programs will respond. Twenty-two states or territories, including Illinois, have OSHA-approved state plans that cover both private and public sector workers. The state programs must follow certain OSHA requirements, but also have some latitude in how they operate.

As OSHA-Watchers, we might find clues about OSHA’s future in the agency's twice-monthly newsletter, Quick Takes. The top story for the Dec. 15 edition under the Obama administration was “Alabama auto parts supplier, staffing agencies face $2.5 million in fines after robot fatally crushes young worker.” In contrast, the top story of the Feb. 1 edition has a more positive and pro-business tone, discussing how the OSHA’s free On-site Consultation Program “helped more than 27,000 employers create safer workplaces in 2016.”

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

Synopsis: When is a Loss Covered by the IL or Another State’s 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 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 a workers’ compensation claim?

This basic question is often overlooked. The assumption is, 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 commercial 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 state Workers’ Compensation Act, even though the employee was hired by and working for an in-state 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 State WC Board or 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 U.S. 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. State Subject Matter Jurisdiction of a Work Injury.

Once it has been established that the claim properly involves workers’ compensation benefits, the adjuster, attorney, or risk manager must determine whether a given state 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. Sometimes common sense prevails.

But remember, payment of state WC 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.

Most state have proper subject matter jurisdiction of a work injury if one of the following tests are met:

            1. The accidental event occurs in a given state. 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 a given state but the ‘contract for hire’ was formed in a different state. This is the tactic most commonly used to bring out of state claims into a favored or liberal state. 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 a given state. This is utilized when the employer may have an out of state headquarters for employees who actually perform the majority of their work in your state. This situation frequently occurs in trucking claims where Petitioner/Plaintiff establishes the principal localization of work in a given state by logs indicating the aggregate number of miles driven in one state versus other states. There are also cases that hold where work is “centered” in one state—employment may be established so as to create jurisdiction. The concept of “centered” work would mean the employee comes to or calls for assignments in their favored state 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 almost always 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 a given WC Board or 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 a given state. These concepts are not contained in the applicable WC statute and shouldn’t be germane. The facts are sometimes utilized by a WC Board or 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 subject matter jurisdiction of all the employer’s WC claims across the country.

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 may generally be ignored at hearings and do not have any real legal effect in many states. 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 a given state 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 hearing officers 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 their 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 and possibly to the local WC Board or Commission. Otherwise, the Workers’ Compensation Board or 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 some states’ workers’ compensation claims practice is the insurance carrier may be named as a party respondent by petitioner in filing the pleading. 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.

Synopsis: Illinois WC Rates Jump Again and Your PPD Reserves Need To Be UPDATED RETROACTIVELY(!). Send a Reply to Get a Free Copy of Shawn R. Biery’s Updated IL WC Rate-Sheet!

Editor’s comment: There continues to be an upward spiral of IL WC rates. As mentioned twice every year, starting in the 1980’s, the IL WC Act provides a formula which effectively insures no matter how poor the IL economy is doing, our WC rates keep climbing.

We caution our readers to pay attention to the fact the IL WC statutory maximum PPD rate is now $775.18. When it was published, this rate changed retroactively from July 1, 2016 to present. If you reserved a claim based on the prior rate for the period from July 1 to right now, your reserves are wrong. If you have a claim with a date of loss after July 2016 and a max PPD rate, you need to take a look and see if the new maximum PPD rate applies. WORD OF CAUTION: There is pending legislation which Gene reported last week and this week which currently states “The maximum compensation rate for the period July 1, 2017 through June 30, 2021, except as hereinafter provided, shall be $755.22. Effective July 1, 2021 and on July 1 of each year thereafter the maximum weekly compensation rate, except as hereinafter provided, shall be determined as follows: if during the preceding 12-month period there shall have been an increase in the State's average weekly wage in covered industries under the Unemployment Insurance Act, the weekly compensation rate shall be proportionately increased by the same percentage as the percentage of increase in the State's average weekly wage in covered industries under the Unemployment Insurance Act during such period.” THIS NEW LEGISLATION WOULD POTENTIALLY CHANGE THIS PPD MAX AGAIN. If this isn’t clear, send a reply to Shawn at sbiery@keefe-law.com.

The current TTD weekly maximum has risen to $1,435.17. A worker has to make over $2,152.76 per week or $111,943.52 per year to hit the new IL WC maximum TTD rate. Does any state in the United States have a TTD maximum that high?

The new IL WC minimum death benefit is 25 years of compensation or $538.19 per week x 52 weeks in a year x 25 years or $699,647.00! The new maximum IL WC death benefit is $1,435.17 times 52 weeks times 25 years or a lofty $1,865,721.00 plus burial benefits of $8K. On top of this massive benefit, Illinois employers/governments have to pay COLA increases.

The best way to make sense of all of this is to get Shawn Biery’s colorful, updated and easy-to-understand IL WC Rate Sheet. If you want it, simply reply to Shawn at sbiery@keefe-law.com or email Marissa with your mailing address if you would like to be mailed a laminated copy at mpatel@keefe-law.com and they will get a copy routed to you before they raise the rates again!

Synopsis: Happy Valentine’s Day from the Gang at KCB&A!!

Editor’s comment: Like the Boy Scouts—Be prepared!