Reform: An Up to the Minute Primer

June 2015

By Francis M. Brady

There has been a flurry of activity regarding Illinois Workers' Compensation Practice in this spring's legislative session. The Firm has been monitoring developments in both chambers. To date, action in the Senate has centered on reforms sought by the business community and supported by the Governor. The Senate measure denies benefits except where the work accident is more than 50% responsible for the employee's injury compared to other causes; limits the coverage afforded traveling employees; establishes credits for 8(d)(2) awards; and makes further cuts in the Fee Schedule.

Consideration in the House has followed a different path. There is legislation now pending focusing on the role of insurance carriers relative to rate setting and premium reduction. Other House measures, like those in the Senate, address causation and traveling employees though, unlike the Senate, they simply codify language from Appellate Court decisions which represents the current practice. House legislation does, however, create a right to contribution, though whether employers would gain any practical benefit from that right is questionable.

SENATE

Floor Amendment 1 to Senate Bill 994 was filed by Minority Leader Christine Radogno on May 22, 2015 and assigned to the Senate Judiciary Committee. By a vote of 8-4, that Committee, on 5/28/15, tabled the legislation, thus precluding a hearing and vote by the full Senate.

The content of the Amendment represented changes Governor Rauner and the business community desire in Illinois Workers' Compensation practice. In pertinent part, the proposed language:

• Precludes a petitioner recovering workers compensation benefits for her injury unless credible evidence shows her employment to be the "major contributing cause..." A "major contributing cause" is one that is more than 50% responsible than all other causes of the injury combined.
• Further defines "arising out of and in the course of employment" to exclude "injuries resulting from a hazard or risk to which the general public is also exposed." The new language also specifies that "in course of" means an accident occurring "at a time and place and under circumstances reasonably required by the employer." Finally, the new language codifies the principle that injuries resulting from "a personal or neutral risk" do not arise out of employment.
• Provides injuries due to repetitive trauma are compensable only if the "cumulative repetitive" work activity is more than 50% responsible than all other causes of the medical condition or injury combined. A worker's action for repetitive trauma is limited to the employer with which he is, or was, employed for the last three months of exposure.
• Directs petitioner must prove his injury and its connection to work "to a reasonable degree of medical certainty based on objective relevant medical findings."
• Addresses traveling employees, stating they can recover for injuries occurring while traveling only if: a) the employer furnishes transportation or provides reimbursement for travel costs; and, b) the travel is required by the workers' job duties. The occurrence of the risk triggering the injury must be "reasonably foreseeable..." in the course of petitioner's travel. An employee injured while going to and from work, or on unpaid break, is not eligible for workers' compensation benefits unless she is performing specific tasks for (her) employer during the break. Finally, language repeats that risks faced by the general public are not compensable even though the traveling employee, due to her travels, faces them more frequently.
• Provides a credit regarding prior 8(d)(2) awards against subsequent awards or settlements, including amputations and vision loss.
• Allows, but does not compel, the Commission to use only an AMA Rating in determining disability. If the Commission chooses to use any of the other of five factors for measuring disability, there has to be supporting evidence "corroborated by objective findings and independent medical examinations."
• Enacts further reductions in the Fee Schedule. I have been told by the Governor's office that the purpose was to cut the maximum allowable paid to treaters for most care by an additional 30%, but only for some procedures. Reading the language involved, I cannot discern whether that purpose was effectively carried out. In other words, I can't tell the procedures targeted.
• Removes the provision limiting the service of Arbitrators to two years at any given call and replaces it with language giving the Chairman discretion to assign and reassign Arbitrators to each hearing site as needed.

HOUSE

The Illinois House has also considered Workers' Compensation reform. To date, that has widely been considered a sham as the vehicle, HB 1287, was sponsored by House Speaker Madigan and contained various limitations he projected the Governor, business and insurance desired. Not surprisingly, the measure was voted down on the House floor along strict party lines on May 22, 2015 with Republicans voting "present."

Interestingly, one section of the bill, Amendment 4, was adopted on May 22, 2015. Review of this section reflects that the majority party in the House seeks to focus attention on whether savings realized after the 2011 amendments are being passed along to employers by their insurance companies in the form of premium reduction. And as of June 3, 2015, Democratic Representatives Hoffman and Bradley have filed further Amendments to House Bill 1287. Considering all these individually:

• Amendment 4 creates an opportunity for employers to formulate safety programs, including return to work mechanisms, and to submit them for certification by the Illinois Department of Insurance. Such certification entitles the employer to have its premium rates recalculated by its workers' compensation carrier to reflect the certified program.
• Amendment 5 addresses "causation" and the rights of traveling employees. As to the former, the Act incorporates language cited by many Appellate Court Decisions reflecting that petitioner's injury is connected to work if it arises from acts she was told to perform by the employer, acts she had a duty to perform, or acts she might reasonably be expected to perform as a part of her assigned duties. Regarding the latter, traveling employees can recover for injuries related to conduct that can be reasonably foreseen. However, if the traveling employee is injured while performing a purely personal activity, there will be no recovery.
• Amendment 6 focuses on repetitive trauma claims and establishes a right of contribution. An employer who pays benefits to a worker for injuries sustained, at least in part, by the employee while working for another employer, can bring a separate action against that other employer for contribution or reimbursement. No such action can be brought, however, until there has been an award made. Once there has been an award, the aggrieved employer has one year to file against the employer it deems culpable.
• Amendment 7 establishes requirements on the part of self-insureds and risk pools to report data regarding workers' compensation benefits paid to the Illinois Department of Insurance. The Amendment also creates a "Workers' Compensation Premium Task Force" made up of 12 members representing the legislature; retailers; manufacturers; labor; and injured workers. This group is tasked with studying recommendations from the National Council on Compensation Insurance (NCCI) regarding premium rates and the extent to which Illinois employers' actual premiums reflect those recommended rates.
• Amendment 8 is a "shell bill." As negotiations proceed, content can be added, and quickly, giving the majority party further leverage depending on developments.

Though the Senate legislation remains bottled up in Committee as of this writing, and no action has yet been taken on Amendments 5-8 to HR-1287 (the vote could come as early as Thursday, June 4, 2015), it remains clear the Governor insists that the legislature address change prior to any talk of a tax increase. The latter is commonly felt necessary to cover budget shortfalls. With the budget as leverage, more talk of Comp reform, and even its enactment, appears likely.