Looming Battle over Rates in Illinois?

Wednesday, February 10, 2010 | 0

By Shawn R. Biery

In the latest benefit rates update, for the first time in Illinois history, rates did not decline even though the Statewide Average Weekly Wage (SAWW) declined. Should litigation follow?
 
With all the other information posted on the excellent website of the Illinois Workers’ Compensation Commission, we have no idea why they wouldn’t fully disclose what they were doing with rates when the SAWW went down for the first time in recent memory. We don’t agree at all with the position they are taking and it is now incumbent on our readers to tell us your thoughts.
 
The Illinois Statewide Average Weekly Wage in Illinois went down from $932.25 to $922.45 in the Jan. 15 changes. However, the calculated amount of the 133-1/3 of the SAWW remained at the previously level of $1,243.00 instead of lowering with the SAWW to the appropriate calculation of approximately $1,230.18. The IWCC website bluntly indicates, “As provided in Section 8(b)4, there is no increase in the benefit rates for 1/15/10 - 7/14/10 because the SAWW decreased.”
 
However, §8(b)6 of the Illinois Workers’ Compensation Act indicates “(t)he Department of Employment Security of the State shall on or before the first day of December, 1977, and on or before the first day of June, 1978, and on the first day of each December and June of each year thereafter, publish the State’s average weekly wage in covered industries under the Unemployment Insurance Act and the Illinois Workers’ Compensation Commission shall on the 15th day of January, 1978 and on the 15th day of July, 1978 and on the 15th day of each January and July of each year thereafter, post and publish the State’s average weekly wage in covered industries under the Unemployment Insurance Act as last determined and published by the Department of Employment Security. The amount when so posted and published shall be conclusive and shall be applicable as the basis of computation of compensation rates until the next posting and publication as aforesaid.”

Based upon the SAWW declining to a point under the Jan. 15, 2009 rates, it appears only appropriate Illinois employers would receive the relief of a rollback to those rate maximums.
 
To illustrate further—there are multiple rates affected and by plain reading of the Act, the rates posted and promulgated by the IWCC directly controvert the plain language of the Act. §8(b)4 of the Illinois Workers’ Compensation Act says in relevant parts:
 
    •    The maximum weekly compensation rate from July 1, 1975, except as hereinafter provided, shall be 100% of the State’s average weekly wage in covered industries under the Unemployment Insurance Act, that being the wage that most closely approximates the State’s average weekly wage.
 
    •    Effective July 1, 1987 and on July 1 of each year thereafter the maximum weekly compensation rate, except as hereinafter provided, shall be determined as follows: if during the preceding 12 month period there shall have been an increase in the State’s average weekly wage in covered industries under the Unemployment Insurance Act, the weekly compensation rate shall be proportionately increased by the same percentage as the percentage of increase in the State’s average weekly wage in covered industries under the Unemployment Insurance Act during such period.
 
    •    The maximum weekly compensation rate, for the period Jan. 1, 1981 through December 31, 1983, except as hereinafter provided, shall be 100% of the State’s average weekly wage in covered industries under the Unemployment Insurance Act in effect on Jan. 1, 1981. Effective Jan.y 1, 1984 and on Jan. 1, of each year thereafter the maximum weekly compensation rate, except as hereinafter provided, shall be determined as follows: if during the preceding 12 month period there shall have been an increase in the State’s average weekly wage in covered industries under the Unemployment Insurance Act, the weekly compensation rate shall be proportionately increased by the same percentage as the percentage of increase in the State’s average weekly wage in covered industries under the Unemployment Insurance Act during such period.
 
    •    From July 1, 1977 and thereafter such maximum weekly compensation rate in death cases under Section 7, and permanent total disability cases under paragraph (f) or subparagraph 18 of paragraph (3) of this Section and for temporary total disability under paragraph (b) of this Section and for amputation of a member or enucleation of an eye under paragraph (e) of this Section shall be increased to 133-1/3% of the State’s average weekly wage in covered industries under the Unemployment Insurance Act.
 
    •    Wage Differential Maximum—For injuries occurring on or after Feb. 1, 2006, the maximum weekly benefit under paragraph (d)1 of this Section shall be 100% of the State's average weekly wage in covered industries under the Unemployment Insurance Act.
 
    •    4.1. Any provision herein to the contrary notwithstanding, the weekly compensation rate for compensation payments under subparagraph 18 of paragraph (e) of this Section and under paragraph (f) of this Section and under paragraph (a) of Section 7 and for amputation of a member or enucleation of an eye under paragraph (e) of this Section, shall in no event be less than 50% of the State’s average weekly wage in covered industries under the Unemployment Insurance Act.
 
While it may not affect the majority of cases as it deals with maximum levels of benefits, we feel it illustrates an example of the IWCC actively presenting information which ignores the plain language of the Act to the detriment of Illinois employers. Assume we will see a change without notice as we saw in the stealth increase in the PPD maximum within the prior year’s changes. It doesn’t take a degree in economics to know that increased business costs are inversely proportional to job creation.

<i>Shawn R. Biery is a partner with Keefe, Campbell & Associates, a Chicago workers' compensation defense attorney. This column was reprinted with permission from the law firm's newslettter.</i>