What Is Workers' Compensation in Illinois?

Recent Illinois politics have put the Workers' Compensation system squarely into the spotlight. The variety of opinions on how to reform the system (if at all) have piqued much interest in the system. The most common question: "What is the current system, anyway?"

The Illinois Workers' Compensation Commission published an on-line handbook in April to familiarize people around the state with the current status of the system. The introduction, in question and answer format, is worth reproducing here. If you have more specific questions that aren't answered by the handbook, the IWCC has an office in Peoria at 401 Main Street, Suite 640, phone number (309) 671-3019. I will also make every effort to answer your questions if you would like to contact me directly.

Source: Illinois Workers' Compensation Commission

1. What is workers’ compensation?

Workers' compensation is a system of benefits provided by law to most workers who have job-related injuries or diseases. These benefits are paid regardless of fault. Each state has its own workers’ compensation law. Illinois’ law first took effect in 1912.

2. Who administers the program?

In 1913, the legislature created a state agency to resolve disputes between injured workers and their employers regarding workers’ compensation. It has been known by different names over the years, but is now called the Illinois Workers’ Compensation Commission. As the administrative court system, the Commission must be impartial. Staff will explain procedures and basic provisions of the law, but cannot act as an advocate for either the employee or employer.

3. Which employees are covered by the law?

Almost every employee who is hired, injured, or whose employment is localized in the state of Illinois is covered by the law. These employees are covered from the moment they begin their jobs.

4. What injuries and diseases are covered under the law?

In most instances, the law covers injuries that are caused, in whole or in part, by the employee’s work. A worker injured by the repetitive use of a part of the body is covered, as is a person who experiences a stroke, heart attack, or other physical problem caused by work. A worker who had a pre-existing condition may receive benefits if he or she can show the work aggravated that condition. Injuries suffered in employer-sponsored recreational programs (e.g., athletic events, parties, picnics) are not covered unless the employee is ordered by the employer to participate. Accidental injuries incurred while participating as a patient in a drug or alcohol rehabilitation program are not covered.

5. What benefits are provided?

The law provides the following benefit categories, which are explained in later chapters:

  a) Medical care that is reasonably required to cure or relieve the employee of the effects of the injury;
  b) Temporary total disability (TTD) benefits while the employee is off work, recovering from the injury;
  c) Temporary partial disability (TPD) benefits while the employee is recovering from the injury but working on light duty;
  d) Vocational rehabilitation/Maintenance benefits are provided to an injured worker who is participating in an approved vocational rehabilitation program;
  e) Permanent partial disability (PPD) benefits for an employee who sustains a permanent disability or disfigurement, but can work;
  f) Permanent total disability (PTD) benefits for an employee who is rendered permanently unable to work;
  g) Death benefits for surviving family members.

6. Are workers’ compensation benefits considered income?

No. Workers' compensation benefits are not taxable under state or federal law and need not be reported as income on tax returns.

7. Who pays for the benefits?

By law, the employer is responsible for the cost of workers’ compensation. Most employers buy commercial workers’ compensation insurance, and the insurance company pays the benefits on the employer’s behalf. No part of the workers' compensation insurance premium or benefit can be charged to the employee. Other employers obtain the state’s approval to self-insure. To identify the party responsible for paying benefits, an employee may check the employer’s workplace notice, check the Commission’s website, or contact the Commission’s Insurance Compliance Division ([email protected]; toll-free 866/352-3033).

8. What does the law require of employers?

Employers must:

a) Obtain workers’ compensation insurance or obtain permission to self-insure;
b) Post a notice in each workplace that explains workers' rights under the Workers’ Compensation Act and lists the insurance carrier, policy number, contact information, etc.;
c) Keep records of work-related injuries and report to the Commission those accidents involving more than three lost work days;
d) NOT charge the employee for any part of the workers’ compensation insurance premium or benefits;
e) NOT harass, discharge, refuse to rehire, or in any way discriminate against an employee for exercising his or her rights under the law.

9. What if the employer does not have workers' compensation insurance?

The employee should give the employer's name and address, and the date of injury, to the Commission's Insurance Compliance Division ([email protected]; toll-free 866/352-3033). An employer that negligently fails to provide coverage is guilty of a Class A misdemeanor for each day without coverage, punishable by up to 12 months imprisonment and a $2,500 fine. An employer that knowingly fails to provide coverage is guilty of a Class 4 felony for each day without coverage, punishable by 1-3 years imprisonment and a $25,000 fine. An uninsured employer may be also fined up to $500 for every day it lacked insurance, with a minimum $10,000 fine. An uninsured employer loses the protections of the Workers’ Compensation Act for the period of noncompliance. That means an employee who was injured during the period of noncompliance may choose to sue in civil court, where there are no limits to awards. In addition, if the Commission finds that an employer knowingly failed to provide insurance coverage, it may issue a stop-work order and shut the company down until it obtains insurance. Fines collected under these provisions are deposited into the Injured Workers’ Benefit Fund, which are then distributed, on a pro rata basis, to injured workers whose uninsured employers failed to pay benefits.

10. What is done to fight fraud?

It is illegal for anyone—a worker, employer, insurance carrier, medical provider, etc.—to intentionally do any of the following:

• Make a false claim for any w.c. benefit;
• Make a false statement in order to obtain or deny benefits;
• Make a false statement in order to prevent someone from filing a legitimate claim;
• Make a false certificate of insurance as proof of insurance;
• Make a false statement in order to obtain w.c. insurance at less than the proper rate;
• Make a false statement in order to obtain approval to self-insure or reduce the security required to self-insure;
• Make a false statement to the state’s fraud and noncompliance investigation staff in the course of an investigation;
• Help someone commit any of the crimes listed above;
• Move, destroy, or conceal assets so as to avoid payment of a claim.

A “statement” includes any writing, notice, proof of injury, or any medical bill, record, report, or test result. Anyone found guilty of any of these actions is guilty of a Class 4 felony, punishable by 1-3 years imprisonment and a $25,000 fine. The guilty party shall be required to pay complete restitution, and may be found civilly liable for up to three times the value of benefits or insurance coverage that was wrongfully attained. If you wish to report a possibly fraudulent situation, you may contact the Workers’ Compensation Investigative Unit at the Illinois Department of Financial and Professional Regulation/Division of Insurance ([email protected]; 312/636-9457; toll-free 877/923-8648). You will be required to identify yourself and, at some point, the person you are reporting will be given your name. Anyone who intentionally makes a false report is guilty of a Class A misdemeanor, punishable by up to 12 months imprisonment and a $2,500 fine.