Should We Reconsider How Death Benefits Are Awarded?

Thursday, November 14, 2013 | 0

Not sure if you like or dislike gay marriage and divorce, but we are certain one’s personal feelings have nothing to do with it any more — it is soon to be the law in our state, our elected leaders have spoken and we are all going to have to adjust. On some levels, we are thrilled to see this relatively minor issue taken off the political landscape so our governor, General Assembly and other local leaders can move forward to manage and hopefully improve the numerous financial issues that are plaguing all citizens of this troubled state.
 
From the Illinois workers’ compensation perspective, there is no question in our mind all benefits previously accorded to widows and widowers will now be expanded to cover legally married gays and lesbians. This is certain to increase the number and premium cost of covered WC death claims in our state.

What is ironic is one reason Illinois workers' compensation death benefits most recently increased is, about a decade ago, our former governor-behind-bars made a political deal to give away control of the Illinois Workers' Compensation Commission to beat Paul Vallas in a primary — Paul Vallas was just tapped to be Gov. Quinn’s running mate.

The giant increase in Illinois workers' compensation death claims in 2005 was directly related to that 2002 political agreement which kept Mr. Vallas out of political office years ago. If you aren’t aware, Illinois workers’ compensation death benefits are among the top three workers' compensation death awards in the entire country. The minimum a widow or widower may receive is well over $600,000 and the maximum is over $1.7 million.
 
In our view, the death benefit concept was created in 1909 when the first Illinois Workers' Compensation Act was formed basically as a life insurance policy that is owed regardless of levels of widow/widower dependency. By that we mean, if you are married and your spouse passes, you get a lot of money, whether you need it or not. We think the lllinois Workers' Compensation Act should be changed so all married couples should have to retain counsel and demonstrate to the arbitrator assigned some minimal level of dependency before their employers are required to fill in the financial gap caused by the passing of a loved one.
 
If you stroll down memory lane, you might note the Illinois Workers' Compensation Act was created as the result of 259 men and boys being killed in the Cherry, Ill., mine disaster and leaving hundreds of widows and children without any means to pay for their homes, food and educations. Shortly thereafter, the Illinois General Assembly enacted workers' compensation death benefit coverage. As this all predated “Rosie the Riveter” and the movement of U.S. women from being homemakers only to currently being a strong, robust and vibrant part of the U.S. workforce, the life insurance model underpinning workers' compensation death benefits may have changed, as marriage has changed.
 
In our view, the legislative and administrator scheme might improve if we update it also. We feel it would be a solid idea to consider having all widows or widowers obtain legal counsel and then come to the Commission. A hearing could be conducted to demonstrate a need for all or an appropriate part of the death benefit by showing dependency on the spouse who recently passed at work. For one example, please assume we are considering a couple where a wife is very successful — she is a sportscaster and makes $500,000 a year. Her spouse takes care of the home and basically manages the couple’s affairs but only makes $25,000 a year in a part-time job. If the at-home spouse passes due to a work injury or illness, as Illinois workers' compensation law outlines today, the death benefit remains $600K+. We feel the employer should be able to respectfully challenge that high value where dependency is very low or nonexistent.
 
The other workers' comp anomaly is the abandoned marriage — a marriage in which a couple has moved apart from each other and stayed apart in separate homes for years and years. When one or the other spouse in an abandoned marriage has passed, dependency is nonexistent. In such a setting, we consider it egregious for an employer to have to pay our generous Illinois workers' comp death benefit basically as a gift to the survivor who had no recent contact with their former partner. We feel an employer should be able to retain counsel and appropriately challenge all or part of such a claim before the arbitrator assigned.
 
Please note we don’t feel this would apply as smoothly to minors who remain legal charges of their parents. But again, we feel our arbitrators could listen to the facts and insure the protection of the young and innocent offspring of a decedent. One of the most interesting and touching workers' compensation death claims we have ever handled was a claim by a widow who had three young girls and an elusive spouse with lots of personal issues who took off on her, never to return. Several years later, she was valiantly raising her girls as a single mom when their absent father was murdered in a robbery where he was working at a convenience store.
 
As part of handling of the workers' comp death claim, we were asked to do a search for the spouse and dependent children and one of our crack surveillance operatives located the widow. By this time, the girls were ending high school and about to enter college; the mother was despondent about how to afford higher education for her beautiful children. When we called to advise that her troubled husband had passed, she cried for some time. When we advised her of the amount and value of the death benefit, she indicated she didn’t want a penny of it but wanted all of the money to be paid into three trust funds for the girls’ educations. With the approval of the arbitrator assigned, we were able to put that request into place. To our understanding, several years later, all three of the young women wisely used the money to get their college degrees and move into great jobs. The mother told us the only thing her husband did for her in life was to give her the blessing of the three girls and the only thing he did for her in death was to finally provide for their schooling through our workers’ comp system.
 
In summary, we feel dependency and an appropriate level of a death benefit for any widow or widower should be an issue fairly litigated in the right Illinois workers' comp death claim. Such litigation would insure the property parties are receiving fair and reasonable benefits and the cost to Illinois employers is similarly appropriate.

Eugene Keefe is a founding partner of the Keefe, Campbell, Biery & Associates workers' compensation defense firm in Chicago. This column was reprinted with his permission from his firm's client newsletter.