In December and November of the 2010 – 2011 legislative sessions, the Illinois Senate and the House of Representatives conducted hearings regarding employers’ concerns that the cost of workers’ compensation in Illinois was excessive and driving employees out of Illinois. During the 2011 veto session, the legislators could not agree on a bill and therefore, no workers compensation reform was even voted upon. In May 2011, a bill emerged with substantial changes and reform that should have brought workers’ compensation insurance premiums down significantly. The amendments will be discussed later in this article. Prior to that vote both the ISBA and ITLA urged legislators and the governor’s office to pass legislation that required transparency with the approximate 400 insurance companies that were vying for business in Illinois. Employers argued that in order to compete with Indiana, Wisconsin, Iowa and Missouri we must lower the benefits that are paid on behalf of the injured worker. Labor’s argument was that this was nothing more than a “race to the bottom” (states competing to lower WC costs by limiting or denying benefits to the injured worker).
Michael Grabell, ProPublica, and Howard Berkes, NPR published The Demolition of Workers’ Comp prepared a March 4, 2015 report which can be accessed at <http://www.propublica.org/article/the-demolition-of-workers-compensation>. This is a must-read for any attorney who wants to bring themselves up to speed as to the trend regarding WC costs in the United States. It points out that state after state has dismantled their workers compensation system with disastrous consequences for those suffering serious injuries at work each year. Employers have shifted the burden of caring for the injured worker to taxpayers who fund SSDI, Medicare and Medicaid. Employees whose injuries have been denied by the Worker’s Compensation insurance company are getting their treatment at emergency rooms and state entities that care for the uninsured. Their families end up with food stamps and receive support from other governmental entities both local and statewide. For the last 12 years over 32 have reduced workers compensation benefits or made it more difficult to qualify for them. Legislators who push for these changes insist they are necessary to keep or attract businesses to their state.
Governor Rauner insists that his economic turnaround package must be passed by the House and Senate before he will begin to discuss the state budget with the legislators down in Springfield. A major part of his economic turnaround package calls for substantial reductions in workers compensation benefits. Should these governmental entities not come to an agreement by July 1, 2015, we may very well face a shutdown of some governmental offices because there is no budget. Then there will be the blame game. The governor will then accuse the democrats for the lack of a budget because they would not pass his economic turnaround package and the democrats will accuse the governor of refusing to compromise and holding middle class families hostage for a budget. It is the middle class that will suffer from the economic turnaround package.
While there is no data to show that the governor’s amendments would in fact reduce the cost of doing business in Illinois, here is SB994 sponsored by Senator Radogno:
The pertinent amendment as to causation is as follows
(d) (1) To obtain compensation under this Act, an employee bears the burden of showing, by a preponderance of the credible evidence, that (i) he or she has sustained accidental injuries arising out of and in the course of the employment and (ii) the accidental injuries arising out of and in the course of the employment are the major contributing cause of the medical condition or injury for which compensation is being sought. The “major contributing cause” of a medical condition or injury is the cause that is greater than 50% of all combined causes of the medical condition or injury.
What accidents are not covered under the Act
Accidental injuries shall not be considered to be “arising out of and in the course of employment” if, without limitation: (A) the accident resulted from a hazard or risk that was not incidental to the employment or the accident resulted from a hazard or risk to which the general public is also exposed, (B) the accident did not occur at a time and place and under circumstances reasonably required by the employment, or (C) the medical condition or injury for which compensation is being sought resulted from a personal or neutral risk.
Injuries that are the result of repetitive or cumulative trauma and apportionment
(2) For the purposes of clause (ii) of paragraph (1) only, if an employee has suffered cumulative or repetitive accidental injuries while employed in the same occupation or industry by multiple employers over time, the accidental injuries arising out of and in the course of the employment shall be considered to be the major contributing cause of the medical condition or injury for which compensation is being sought if those cumulative or repetitive accidental injuries suffered during employment in that occupation or industry are greater than 50% of all combined causes of the medical condition or injury. In that circumstance, the employer liable for compensation under this Act shall be the most recent current or former employer who has employed the employee for at least 3 months. (3) An injury, its occupational cause, and any resulting manifestations or disability must be established to a reasonable degree of medical certainty, based on objective relevant medical findings.
Exclusions as it pertains to traveling employees
(e) An employee who is required to travel in connection with his or her employment and who suffers an injury while in travel status shall be eligible for benefits only if the injury arises out of and in the course of employment and the travel is necessary for the performance of job duties. Travel is necessary for the performance of job duties if (i) the employer furnishes the transportation or the employee receives reimbursement from the employer for costs of travel, gas, or lodging as part of the employee’s benefits or employment agreement and (ii) travel is required by the employer as part of the employee’s job duties. An injury suffered by a traveling employee is deemed to arise out of his or her employment if caused by a risk incidental to or connected with the employment. Risk is not to be determined by a reasonable and foreseeable standard.
Elimination of the “personal
comfort” doctrine
Arising in and out of the course of employment does not include travel to and from work or when an employee is on a paid or unpaid break and is not performing any specific tasks for the employer during the break. Common risks associated with travel even where the traveling employee is exposed to a greater degree than the general public do not arise out of the employment.
The pertinent amendment as to “standards” is as follows
(b) In determining the level of permanent partial disability, the Commission shall base its determination on the following factors: (i) the reported level of impairment pursuant to subsection (a); (ii) the occupation of the injured employee; (iii) the age of the employee at the time of the injury; (iv) the employee’s future earning capacity; and (v) evidence of disability corroborated by objective findings in the treating medical records and independent medical examinations. In determining the level of disability, the relevance and weight of any factors used in addition to the level of impairment as reported by the physician must be explained in a written order.
Governmental bodies would not be required to post a bond when filing a Summons
The State of Illinois, including its constitutional officers, boards, commissions, agencies, public institutions of higher learning, and funds administered by the Treasurer ex officio, and every county, city, town, township, incorporated village, school district, body politic or municipal corporation against whom the Commission shall have rendered an award for the payment of money shall not be required to file a bond to secure the payment of the award and the costs of the proceedings in the court to authorize the court to issue such summons.
Respondents would be entitled to a credit for prior “person as a whole” settlement or awards
In computing the compensation to be paid to any employee who, before the accident for which he or she claims compensation, had previously sustained an injury resulting in an award or settlement for permanency given under this subparagraph 2, such percentage of partial disability shall be deducted from any award made for the subsequent injury resulting in an award or settlement for permanency given under this subparagraph 2.
Editor’s comments
The Worker’s Compensation Act does not mention the word “causation” when defining compensability. Rather §1(d) of the Act specifically states: “To obtain compensation under this act, and employee bears the burden of showing, by a preponderance of the evidence, that he or she has sustained accidental injuries arising out of and in the course of the employment. Compensability is not dependent upon negligence although negligence can give rise to compensability. The case law defines “arising out of.” Causation is a term more commonly associated with tort law and negligence. While an accident caused by the negligence of the employer or employee is more likely compensable, that does not exclude other events that “arise out of,” and/or are incidental to the employment.
Causation in tort law requires cause in fact and proximate cause. The workers compensation system is not based upon fault. As stated in a recent Supreme Court of California decision, South Coast Framing v. Worker’s Compensation Appeals Board, Jovalyn Clark S215637 (5/28/2015), the purpose of workers compensation is that “it seeks (1) to ensure that the cost of industrial injuries will be part of the cost of goods rather than a burden on society, (2) to guarantee prompt, limited compensation for an employee’s work injuries, regardless of fault, as an inevitable cost of production, (3) to spur increased safety, and (4) in return, to insulate the employer from tort liability for his employees injuries” The tradeoff did away with tortious causation as a necessary element in a workers compensation claim.
Assuming that raising the causation standard passes constitutional muster, an Illinois amendment to causation will spur more litigation, especially when the injuries are sustained by the older workers. They are the ones with pre-existing degenerative issues from years of hard work which contribute to the nature of the injury. Your 50-year-old, 30-year garage door installer will have degenerative conditions regarding his shoulders by the very nature of his work. He will become symptomatic and if he becomes symptomatic as the result of an accident, today his injury would be deemed compensable. If the causation standard proposed by the governor is adopted, and the rotator cuff finally tears, the issue will be whether or not the pre-existing degenerative condition was the cause or the cause was a discrete accident related to a time, place and event. Diabetics, people with thyroid conditions, or women who are pregnant may have a difficult time proving that their repetitive activities have led to their cubital tunnel or carpal tunnel syndrome versus their pre-existing disease or illness. The proposed causation standard will eliminate the concept that you take your employee as you find him
If the proposed causation amendment is enacted, there will a great wealth of medical experts willing to testify for a price on behalf of insurance companies. The doctors will opine that individuals who become symptomatic while lifting 50 pounds suffer from degenerative disc disease, and the accident had nothing to do with it. The injured worker will incur the cost of engaging either his physician, or an expert, in order to present evidence that the accident was the major contributing cause of his injury. I am curious as to what happens to the epileptic who is placed on a ladder by the employer, who has a seizure, falls, and severs his spinal cord. What was the primary cause, being on the ladder or having a seizure?
As stated, a change in the causation standard will initially cause a tremendous increase in the friction costs borne by the employer and employee. By friction costs, I mean there will be dueling doctors. Each side will be hiring their experts to try and prove their position as to major contributing cause. Litigation will increase as defense attorneys will advise their clients that they have nothing to lose by litigating every case. This increase in litigation based upon the change in the statute was recently seen when Utilization Review for treatment and when AMA guidelines were made a part of the equation for disability. We have drifted way to far from the intent of those who drafted workers compensation legislation at the beginning of the industrial revolution. It was their intent to “expedite the delivery of benefits to the injured worker” and implement a system that was “simple and summary” and protect the employer from any let alone excessive jury award by denying the employee the right to sue in tort.
Although not included in SB994, the governor would like AMA Guidelines to be the sole determination of disability/impairment. If that were implemented the cost of litigation would exceed the amount of recovery and therefore, deny the injured worker an attorney to represent him/her when their case has been denied by the employer on the basis of causation. The cost of depositions to prove causal connection will exceed the amount of the recovery for permanency.
The Worker’s Compensation Act was drastically changed when Gov. Quinn signed amendments on June 28, 2011. What Gov. Rauner wants now is what was left out of the 2011 amendments which was part of a compromise between the employer and employee representatives. While those amendments have greatly reduced the benefits payable to the medical providers in the injured worker, those reductions have not been passed along to the employers. AMA guidelines became a factor in determining disability; the worker’s choice of physician was limited; repetitive trauma involving the hands was reduced to 15% as a maximum award unless there was convincing evidence of greater disability, but then that was capped at 30%; wage loss differentials were limited periodic payment to age 67 or five years whichever is longer.(It should be noted, that the cost savings for wage loss differentials are only now going to be appreciated because they pertained to injuries that occurred on or after September 1, 2011. Those cases are just now coming to fruition.) Utilization review was modified; intoxication at the time of the injury creates a rebuttable presumption that the injury did not arise out of the employment. There were other various changes in the act of less significance. Later the act was also amended so that arbitrators are now political appointments of the governor but their appointment must be confirmed by the Senate. The arbitrators have a three-year term and then must be reappointed.
What is the real reason for the changes that are being proposed by management and the current governor? They indicate that it is for business to compete on an equal level with other states. The states have all engaged in a “race to the bottom.” Is it the cost of doing business in our neighboring states that is really driving businesses out of Illinois? Or are the vast majority of employers that leave Illinois are leaving for Mexico, South Korea, Taiwan, China or Japan? It is my understanding that Caterpillar is closing a Joliet plant in 2016. Rather than move that plant to Indiana, they are moving to Mexico.
Please keep in mind that a large factor in determining workers compensation premiums is average weekly wage. Illinois has a higher median average weekly wage than our bordering states and enjoys a higher standard of living than her neighboring states. That being said, all indications show that the premiums in Illinois should have gone down significantly since the 2011 amendments. This demonstrates that reducing the benefits payable to injured workers does not necessarily correlate with the reduction in the cost of workers compensation premiums. Can there be some accountability of the insurance companies when the payment of benefits goes down and premium rates go up?
Please do not take for granted that this legislative session will not make any changes to the Worker’s Compensation Act. Do not assume that if they do make changes they would be minimal. You should contact your state senator and state representative and voice either your support or your objections to any of these amendments.
