11-9-2020; Biden Wins, Pritzker Loses HIs Tax Hike--What Does It Mean for Work Comp?; IL WC Appellate Court Ruling of Interest and more

Synopsis: Biden Wins; Pritzker Loses His Tax Hike; What Does It Mean for Work Comp?

Editor’s comment: I congratulate President-to-be Joseph Biden and forward condolences to the supporters of outgoing President Donald Trump. It is our strong hope our country will continue to thrive and survive. From incoming President Biden, I feel certain we are going to see:

• Ramped up efforts to stomp out the Great Pandemic of 2020;

• Trillions more in government borrowing for “stimulus” packages to hopefully get us past the economic crisis brought on by the Great Pandemic but continue to steep our country in lots of debt;

• “Black Lives Will Matter” and it is about time—it is my hope sworn police officers start to act like actual “officers” and not like drunken biker gangs;

• Global Warming will again return to public discourse and debate; hopefully before we all cook ourselves in the oven this planet is unquestionably turning into.

What does it mean to the World of Work Comp?

Well, I am seeing some but not zillions of COVID WC claims. These odd claims are going to work themselves through the WC systems in all five States we handle and defend our insurance and self-insured employers. As I have advised, they are either moderately irritating “flu” claims without a great deal of value/reserves or, in stark contrast, work-related death claims that have gigantic value and business-busting reserves. The defense team at KCB&A warn all U.S. employers--you have to continue to employ PPE, masks and whatever you need to avoid new infections. If you get a “super-spreader” in your workforce who infects and possibly kills lots of your workers, you may find your company or government in bankruptcy and yourself on a bread line. Don’t be misled, keep on dealing with the Great Pandemic until it is erased by a vaccine or herd immunity.

I consider there to be a mania about presumptive coverage for “first responders” that may continue or intensify, so as to provide untouchable coverage and benefits for police, fire, medical and other similar occupations. I feel this sort of global work comp coverage for such workers is going to expand even after the Great Pandemic is over. I don’t feel such legislation was needed, as our administrators across the country wouldn’t put up with baseless denials. It is my concern that, once we start global and unrebuttable coverage for COVID, that is going to apply to any goofy thing a police officer or firefighter claims. Trust me, that is going to cost a lot of money.

I do feel reasonable economic stimulus packages are needed but I hate to see our country go even further into the abyss of debt we are already in and getting worse every minute. The folks at usdebtclock.com feel we have more than $27 trillion in national debt. That number terrifies me and I hope all Federal and State legislators start to see it for the threat to our country that it is.

What Did Our Nutty IL Governor Pritzker Just Lose With His Proposed Tax Hike and When Will His Silly Illinois State Government Start to Reform Itself And Make Fiscal Sense?

IL’s Zillionaire Governor JB Pritzker just did something I consider, for lack of a better term, borderline insane. He donated over $60M of his own bucks to support a constitutional amendment to strip away protections against uneven income taxation. I don’t know if any Governor in any State has ever spent that sort of money to basically put the blocks to taxpayers.

The problem he is now going to have to face is what to do to get IL State Government back to any sense of being on sound financial footing in the next twenty-thirty years. After his embarrassing loss, he is now faced with cutting government and salaries and benefits which will cause pain to his strongest supporters—government unions and workers who all supported and voted for him to insure he would “protect” them and the billions of tax-free dollars they are raking in every day of every year from the day they started in their government jobs until they die of old age. I consider fake IL Gov’t pensions to be a shameless scam—these retirees are getting something in the hundreds of billions for absolutely nothing. If you don’t understand what I mean, please send a reply and I will explain it to your satisfaction.

Trust me, the State of Illinois is as “bankrupt” and poorly designed as a business as any in the history of bad businesses/governments. Someone is going to have to take the reins and say—“ENOUGH!” When our dads and moms were raising us and they got short on money, they cut their budgets to the bone. Someone in IL State Government has to start recognizing they are literally hundreds of billions in debt and budget cuts should come first before you go to taxpayers and start stripping out more taxes, tolls and fees that are already among the highest in the country, if not the world.

It is my view, IL State Government and many IL local governments are over-staffed, over-paid and “over-retired.” The State of IL has 88 State agencies with dramatically overlapping, redundant and unneeded workers. As one example, our IL State government has seven, count ‘em, seven different police departments with seven different police department chiefs and HR directors and redundant managers and line workers. The IL General Assembly has “representatives” and “senators” who each represent exactly the same people! That is 120 IL legislators and staffs—could we find a way to get along with half of all those pay-rollers and cigar chompers? Please also note those 120 legislators only have to work in the General Assembly for two terms or four short years to then be insured they will receive lifetime tax-free fake pensions and healthcare coverage that can pay them literally millions of dollars to the day they pass. One such IL legislator put about $100K into his unfundable IL Gov’t fake pension and has already collected about $3.7M from the scam, I mean, plan. To my understanding, there are about 700,000 IL gov’t pensioners with unfundable fake gov’t pensions that are certain to bankrupt this nutty State if budget cuts and gov’t pension reform don’t follow.

From the perspective of the IL WC Commission, I haven’t seen any effort to try to maximize the great talent they have and minimize rising costs. Please note the number of IL WC claims has greatly decreased in the last decade or so, while IWCC staff and budgets have increased. We have over 30 Arbitrators--I feel the IWCC could get along with half that number once budget cuts were in place. We now have 27 lawyers at the second administrative appeal level—our Commissioners and their staff attorneys. As I have advised in the past, if each of those 27 attorneys would issue one contested decision a week, they would have literally nothing to do in about ninety days. Budget cuts and consolidation should be considered a no-brainer at the IWCC and all IL State gov’t agencies.

In short, some day, some way, I hope to see budget cuts and efficiencies and common sense start to happen in Illinois and other similar States. If it doesn’t start and continue, I am sure the piles of unpaid bills and escalating taxes will continue until our great-great-grandchildren have the guts to do something. I hate to think of our State become a larger version of the financial miasma that is the City of Detroit.

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

Synopsis: Rule 23 IL Appellate Court Ruling confirms their view “loss of trade” for gov’t worker doesn’t have to relate to income loss because income from gov’t benefits isn’t actually income?

Editor’s comment: My readers know I am not a fan of IL Rule 23 Appellate Court decisions that are unquestionably published but are supposed to be magically “non-published.” If you don’t understand what a published “non-published” court ruling is, send a reply and I will try to explain it.

In their recent decision in City of Peoria v. IWCC, the IL Appellate Court considered a claim for a woman police officer who, in the course of her sworn duties trying to apprehend a bad guy or girl, badly broke an ankle on the job. She underwent surgery and has permanent issues. I respect her and feel sorry for her sacrifice and hope she recovers as much as one possibly can from such injuries.

But if you take a look at my article above, in other States, this sworn police officer wouldn’t be pensioned off when there is lots of work she can and should be doing at a desk job. Whenever I go into any police department, there are lots and lots of police officers sitting at desks. As you read this, probably thousands of sworn police officers across our country are working at desk jobs—there is no shame in having to work a desk or handle a 911 radio/phone system. You need to speak “cop talk” to handle those jobs.

But this officer was given a lifetime line of duty disability pension and other benefits. Please note she can find other work and make more money—just not police work. Along with the pension, the Arbitrator and IWCC provided her what I call a “going away present” of 40% body as a whole that I assume is probably six figures of tax-free income from the taxpayers of the City of Peoria. It appears obvious to me someone in gov’t management objected and appealed the award all the way to the Appellate Court, WC division to point out there is no true “loss of income” when this officer is certain to receive the pension and other benefits she is statutorily provided.

In my respectful view, the decision of the Appellate Court majority holds the income derived from benefits isn’t actually income under Section 8(d-2) of the IL WC Act so the IWCC’s ruling was affirmed. In my view, the logic of that matches the logic of published “unpublished” decisions—you have to be a lawyer to smile when you hear it.

If you want to know why the IWCC picked 40% BAW over 20% or 90%, all I can say is you and I need a Ouija board to figure that one out—in my view, there is no science or guidance that will ever answer that question.

I appreciate your thoughts and comments. Please post them on our award-winning blog. If you want the link to the ruling, send a reply.

10-20-2020; Stumbling Along In IL Work Comp—A New Permanency Concept of “Loss of Job???”; Marsh Publishes an Amazing and Informative Update on COVID-19 and Workers’ Comp and more

Synopsis: Stumbling Along In IL Work Comp—A New Permanency Concept of “Loss of Job???” Thoughts and commentary from Gene Keefe, J.D.

Editor’s comment: Probably around a decade ago, someone or three of the IL WC Petitioner’s bar was successful in getting IL Arbitrators to award “loss of trade” to firefighters and police officers who could not longer be in the fire or police department due to a work-related event. To my mind, this was happening as a “going-away-present” as such workers receive line of duty disability pensions that provide lifetime benefits. You may not know but when police/fire officers get line of duty disability benefits, the IL Pension code doesn’t allow them to also seek wage loss differential or total and perm benefits at Work Comp. In this setting, the “loss of trade” concept could get the appropriate worker $100K+ in tax-free “going away” money when they left their respective departments and moved into retirement or other work. In some States that are more government economical, the lifetime benefits of a line of duty disability pension would be all such a worker might receive.

This “loss of trade” concept also occurred for the construction trades to provide lots of money to electricians, plumbers, iron workers and others who had restrictions and didn’t choose to take wage loss differential benefits for any number of reasons.

Please note the “loss of trade” concept does make some sense in the context of the language of Section 8(d-2) of the IL WC Act that indicates that section of the IL WC Act contemplates increased benefits for an accidental injury that results in a lifetime loss of income. That said, please note no provision in the IL WC Act says or uses the words “loss of trade.” In short, that concept isn’t defined anywhere. When an IL WC hearing officer uses the term “loss of trade,” one can attach whatever legal meaning you like to what I respectfully feel is a “made-up” legal and claims term. In my view, we do that a lot in the IL WC system. Making up benefit concepts renders IL WC very unpredictable and wildly challenging to accurately set PPD reserves.

I am now advised most IL WC Arbitrators are looking at any claim where Claimant is changing jobs to merit dramatically increased permanency/impairment under Section 8(d-2). There is no requirement from the IL Arbitrator that an employer first exhaust all efforts to return the worker to the same position with accommodation, as the ADA requires. Basically, the Arbitrators are looking at “loss of job” claims and reacting. Again, as a WC veteran in this State, I don’t agree with any undefined concept that mandates an increase in reserves for the insurance carriers, TPA’s and self-insured employers in both the private and public sector. Please also note if a given Claimant has a leg or shoulder or wrist injury and they are compensated for “loss of job” under Section 8(d-2), IL employers and governments get no credit for paying such benefits if the employee injures the same body part repeatedly.

Case in point--we have an active claim in the office where the worker was working for around $15 an hour. She has purported restrictions making keeping her existing job a challenge—she may need to change to a lighter job.

Due to the giant and staged increases in our IL minimum wage, everyone who has any job in this nutty State will soon be making $15 an hour. The Illinois minimum wage goes up on 1/1 every year for the next five years. There is no question this worker, if she gets a job doing anything, sedentary/light or medium work, she will be making $15 an hour or more at some point in her life. In my respectful view, she isn’t going to suffer a loss of income.

Regardless, the Arbitrator in the claim is saying her needed job change is “loss of job” due to the work injury and OC is asking for 45% LOU BAW for a single injury to one body part. Ouch. We are countering at about half of the demand, which is still a lot of money. In my view, it isn’t the same when someone like Claimant has “lost her job” to change from a minimum wage job to a different minimum wage job. And, as our IL Supreme Court has just expanded IL WC to make us a “positional risk” state, if we are going to provide giant “loss of job” settlements and awards for anyone who might need to change jobs after an injury, the cost of IL Work Comp poker is going to go way up.

As I indicate above, please also note this “loss of job” concept runs directly contrary to ADA or the Americans with Disabilities Act. When Claimants can do some but possibly not all of the essential tasks of a job post-injury, all U.S. employers are supposed to reasonably accommodate them and bring them back. Some employers treat WC claimants as pariahs and won’t bring them back and let the insurance carrier or TPA deal with it. This can subject the employer to an ADA claim for not providing an “interactive meeting” as ADA and the EEOC requires—if you need help with this concept, please send a reply.

In short, it is my hope the defense WC bar in this State is going to start to push back on “loss of job” awards and settlements to try to keep the lid on things. Understanding Illinois is a one-party State and will be for years to come, this may be challenging to do.

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

Synopsis: Marsh Publishes an Amazing and Informative Update on COVID-19 and Workers’ Comp. We consider this a must-read for U.S. risk and claims managers.

Editor’s comment: The U.S. work comp matrix is not experiencing the worst-case scenarios stakeholders predicted at the start of COVID-19, though employers and injured workers aren’t out of the woods yet, according to a new study from a global insurance broker and risk adviser, Marsh.

The workers’ comp insurance market is still competitive, as COVID-19 OccDisease claims have been balanced by declines in other categories of occupational injuries, Marsh announced in its recent study, COVID-19’s Impact on Workers’ Compensation Market Is Minimal, but Challenges Persist. If you want to read the study—click on the link “recent study” above.

As the pandemic continues, employers are likely to face obstacles such as payroll management, changing worker classifications and new legislation that could make it easier for employees to claim they caught Covid-19 on the job, according to the study. “At the same time, new tools such as telemedicine and a more collaborative approach to claims management can present opportunities for employers to stay ahead of the curve,” the study’s summary states.

The climate for WC insurers has shifted after years of growth and favorable workers’ comp trends, and systems saw that progress continue into early 2020 before the pandemic began. Despite an unstable labor market and forecasts that workers’ comp premium volume could fall by as much as 10% to 20% by the end of 2020. Longer-term impacts on WC carriers’ profitability should end up being less dramatic, according to the study.

Industry watchers predicted that a tidal wave of COVID-19 claims would enter U.S. workers’ comp systems. But aside from the health care sector, no such influx has happened, according to the study. Data analysis reveals average severity of COVID-19 claims is lower than anticipated.

As KCB&A has advised our clients and friends, there are two sorts of COVID-19 claims:

1. Folks who get test positive and get mildly sick or not but recover in a week or so and

2. Folks who get very ill and possibly pass from the exposure/disease.

In our experience, Category 1 above is basically the “flu.” Workers who recover from the COVID-19 “flu” go back to work just like folks that recover from Influenza A. The medical and lost time costs are minimal. Such COVID-19 claims haven’t been very expensive, with one survey reporting about 96% of claims cost less than $3,500, according to the Marsh study. 

Category 2 claims can involve long stints in the ICU and dramatic and six- and seven-figure exposures for WC/OD death benefits. The Marsh study indicates 4% of COVID-19 WC/OD claims have been very costly, creeping into the hundreds of thousands of dollars per claim to cover extensive procedures and hospital stays.

The Marsh study indicates “With the frequency of non-COVID-19 claims remaining lower than expected, the workers’ compensation line is expected to be less affected by the pandemic.”

Marsh says employers still need to be diligent when it comes to managing coverage and maintaining work site safety protocols. Many elements can dictate premium costs, including calculating payroll, classifying workers based on assumed risk while conducting normal job duties, and a company’s experience rating modification. A shift toward telecommuting and working from home has also created challenges for employers — as some employees must be temporarily reassigned classification codes — although the trend is likely to contribute to fewer workplace injuries, according to the study. To avoid missteps when it comes to reporting, Marsh says employers should keep separate records for payroll given to workers for time not worked in relation to the pandemic, instead of rolling into paid time off or another category. Employers should also keep payroll records for workers who continue to work but have assumed new roles in a way that the payroll could be split based on workers’ comp class codes, according to Marsh. Maintaining separate overtime records related to COVID-19 and recording the start and end dates of employee furloughs should also be helpful to employers, according to Marsh.

Workers’ comp claim trends have varied by industry, according to the study. While many industries have seen lower frequencies since the pandemic began in March, the health care sector is experiencing an uptick in year-over-year claims, and retail businesses have seen an increase in claims volume after seeing declines in the early days of the outbreak. The mix of claim types has changed since March, even while overall claims frequency has dropped, according to the study.

Before COVID-19, about 21% of all claims were for indemnity. But since the pandemic began, the share has risen to between 24% and 35%, according to a study by Marsh and consulting firm Oliver Wyman that looked at data through June 30. More uncertainty could be on the horizon, according to Marsh’s most recent study. Unemployment, furloughs and employees who are hesitant about filing WC/OD claims because of unclear job prospects could send new injury claims tumbling by as much as 20% by year’s end.

“As the economy continues to reopen, however, these trends may gradually be reversed,” the study states.

Despite the trend toward enacting new COVID-related workers’ comp laws, “many COVID-19 claims have ultimately not met compensability requirements,” according to the Marsh study. Industry estimates show that only 20% to 30% of all COVID-19 claims have been accepted, with most coming from the health care sector, according to the study. “In contrast, about one-third of all claims have been denied for various reasons, including a lack of diagnosis and/or symptoms, refusal by claimants to be tested for COVID-19, and the fact that some claimants have largely been working from home,” the study states.

We salute Marsh for this interesting analysis. We hope the pandemic is going to end, as it has to. We appreciate your thoughts and comments. Please post them on our award-winning blog.

Synopsis: Annual IL State Chamber WC Conference Goes Virtual—Shawn Biery & John Campbell to present.

Editor’s comment: The 14th Annual Workers' Compensation & Safety Conference set for November 4th is being held virtual this year. The 8:30 am to noon program features John Ruser, President & CEO of the Workers' Compensation Research Institute (WCRI) and Michael Brennan, Chairman of the Illinois Workers' Compensation Commission.

The program also will include the following breakout sessions:

• Advances in the Diagnosis and Treatment of Carpal Tunnel Syndrome - Presented by Dr. Andrew Zelby and Dave Rusch, Vice President of Business Service Development, Ovation Hand Institute;

• Medical Marijuana in the Workplace - Presented by AJ Sheehan, MVP Law

• The Covid-19 Rebuttable Presumption - What is it and What Does it Mean for You? - Presented by Peter Stavropoulos, Brady Connolly and Masuda

• 2020 Workers Compensation Case Law Update - Presented by Shawn Biery and John Campbell, Keefe Campbell Biery & Associates

• Snakes, Leaches, and Tobacco Enemas - The Case for Evidence-Based Medical Treatment Guidelines - Presented by Patrick Robinson, Vice President, Government Affairs, ODG, an MCG Health Company

• OSHA Updates for 2020 and Beyond - Presented by Matthew Horn, SmithAmundsen LLC

For more information and to register:

https://ilchamber.org/workerscompconference/

10-13-2020; Three Thoughts for All IL WC Risk and Claims Managers and more

Synopsis: Here are Three Thoughts From Gene Keefe That All Illinois Risk and Claims Managers Need to Know.

Editor’s comment: I consider this stuff to be fairly important for you to consider.

First, before, during and after the Pandemic, injuries and work-related exposures that occur while working remotely from home are covered by Work Comp or the OD—OccDisease Act. 

In Illinois, if and when your workers are hurt while working from home, they are entitled to the benefits and protections of the Illinois Workers’ Comp or OD  Acts. 

Illinois law requires an employer pay for all medical care and treatment, TTD/TPD and compensation for any permanent impairment or disability suffered by the worker. In order to be entitled to those things, your worker must

1. Report the event causing injury or disease within 45 days and

2. Be able to show they were injured “in the course” of their employment and the injury “arose out of” their employment.

The term “in the course of” one’s employment, in the most general sense is injuries occurring on the employer’s premises while performing the employer’s work during regular work hours. However, the definition of workplace and work hours is unquestionably forever changing.

We are now in an era of more employees working from home than ever before and still more contemplating such a change. For those people who are working from home, and who are injured, how do we determine if they are injured “in the course of” their employment and “arising out of” their employment? For IL Employers, this creates an incident investigation challenge—you have to fully and completely document what happened at someone’s home office/workplace and whether it is truly a work accident. If you need an Incident Investigation form and protocol, sent a reply.

Many of the criteria for the commuter are exactly the same as those for the home worker. For example, did the injury occur during those hours that an employer would have reasonably anticipated your worker to be working? Can your worker show they were engaged in meaningful work for you just prior and during the time the injury occurred? Did the injury occur while performing a task for their work? 

Still further, can they establish the injury “arose of the” employment? Was it their printer that fell on a foot and fractured it or was it their toaster oven? Document, document, document.

If an injury does occur while working from home, and is connected to work, it is important to insure your people know to report the incident to someone in a supervisory position at the employer as soon as possible. To capture proof of the reporting, consider recording a conversation and/or getting signatures.

Second, Understanding “Independent Contractor”—Gene’s rule.

I get asked constantly how to define an “independent contractor” under IL Work Comp. It is basically easy and trust me, case law is mildly deceiving.

Please also understand your “worker” is not an independent contractor because they agree to it orally or sign off on it or otherwise act like they are somehow “independent.”

They are only independent for WC purposes if they have their own WC insurance and show you the policy. The policy has to cover anyone and everyone that works with and for you. I can’t stress this enough. If they have their own WC insurance and they die at work or become seriously injured/disabled, you want the claim to go through their own coverage with your coverage as a backup.

Please assume they have six young kids and dependent parents and they are going to complain to their congress-person or state rep if the worker is injured and disabled/dead. The politician is going to find them a great Claimant lawyer and the lawyer is going to appropriately come after you for coverage—you need to be ready to show the policy or “proof of insurance” to demonstrate that worker was “independent” and their issues aren’t on your dime. If you can do that, you have an independent contractor relationship. If you can’t, it is going to be hard to defend you. Feel free to contact our defense team for help, as we do defend folks who may have similar issues and need guidance.

So Gene, what about the “opt out” thing where a worker who runs the “independent contractor” company can “opt out” of WC/OD coverage?

You hear a lot of things--there is no reason, none under which I can recommend any of my/our KCB&A clients should allow an “independent contractor” to opt out of coverage. Basically, what that means is there is no coverage to protect the person from gigantic medical bills and lost time and whatever their permanency/impairment might be.

Again, the family and friends of that injured man or woman are coming after YOU! Don’t let that happened by allowing the worker to opt out—make sure they haven’t done so.

Third and last for this week—what are the risks of operating a company/employer in IL and not have a Work Comp/OD policy?

In simplest terms, the risks are both “business-busting” and “you-busting.” If you are operating a company without WC/OC coverage, you can and will be subject to a $10,000 fine along with $500 for every day you were operating without insurance.

That fine can be levied on your business whether it is a sole proprietorship, corporation, LLC or whatever form you use. It is also possible for Claimant and counsel to “pierce the corporate veil” and attack your personal assets, like your home or car.

On top of all those challenging things, you can not only face a WC claim before the IL WC Commission, it is also possible you can be sued in Circuit Court for the injuries with unlimited risk—a verdict for worker injuries or death could be in the millions or tens of millions.

And last but not least, it is a class 4 felony or a crime to operate a business without WC/OD coverage. You could lose your house, your car and go to jail.

In short, please, please don’t operate a business in this nutty State without work comp/occdisease coverage.

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

Synopsis: Annual IL State Chamber WC Conference Goes Virtual—Shawn Biery & John Campbell to present.

Editor’s comment: The 14th Annual Workers' Compensation & Safety Conference set for November 4th is being held virtual this year. The 8:30 am to noon program features John Ruser, President & CEO of the Workers' Compensation Research Institute (WCRI) and Michael Brennan, Chairman of the Illinois Workers' Compensation Commission.

The program also will include the following breakout sessions:

• Advances in the Diagnosis and Treatment of Carpal Tunnel Syndrome - Presented by Dr. Andrew Zelby and Dave Rusch, Vice President of Business Service Development, Ovation Hand Institute;

• Medical Marijuana in the Workplace - Presented by AJ Sheehan, MVP Law

• The Covid-19 Rebuttable Presumption - What is it and What Does it Mean for You? - Presented by Peter Stavropoulos, Brady Connolly and Masuda

• 2020 Workers Compensation Case Law Update - Presented by Shawn Biery and John Campbell, Keefe Campbell Biery & Associates

• Snakes, Leaches, and Tobacco Enemas - The Case for Evidence-Based Medical Treatment Guidelines - Presented by Patrick Robinson, Vice President, Government Affairs, ODG, an MCG Health Company

• OSHA Updates for 2020 and Beyond - Presented by Matthew Horn, SmithAmundsen LLC

For more information and to register:

https://ilchamber.org/workerscompconference/