TABLE OF CONTENTS
Overview
Insurance Compliance program
Bankrupt insurers
Balance billing
Workers
compensation insurance fraud
FREQUENTLY
ASKED INSURANCE QUESTIONS
How
many employees are required to come under the Act?
Do employees who are family members have to be insured?
Is
there a waiting period for workers’ compensation coverage?
I am a sole proprietor/business partner/corporate
officer/member of a limited liability company. Do I have to buy
w.c. insurance?
Does an out-of-state company have to provide
Illinois workers’ compensation insurance?
I
am a new employer. How do I obtain w.c. insurance?
How
do I know if my employer has workers’ compensation coverage?
My
employer does not have workers' compensation insurance. What should
l do?
If I report my employer, do I have to give my
name?
Will
my group health plan or occupational disability insurance cover
workers' compensation cases?
Illinois
law requires employers to provide workers' compensation insurance
for their employees. Section 1(b)2 provides that almost everyone
who is hired, injured, or whose employment is localized in Illinois
is covered by the law. Sole proprietors, business partners,
corporate officers, and members of limited liability companies may
exempt themselves. Overall, it is estimated that 91% of Illinois
employees are covered under the Act.
To check an
employer's insurance coverage, you may search
online.
Employers may
either buy insurance or obtain permission to self-insure. Roughly
90% of employers buy insurance. If you need to obtain insurance
coverage, contact a licensed, professional insurance agent, perhaps
one who specializes in business owners' insurance. If you cannot
find an insurer to write you a policy, you may enroll in the assigned
risk plan,
administered by the National
Council of Compensation Insurance (800/622-4123 (ask for the
Illinois assigned risk plan)).
The workers'
compensation insurance business in Illinois is healthy and highly
competitive. In fact, more carriers write workers' compensation
policies in Illinois than in any other state in the country. Click
here to view a list of all 367 carriers writing w.c. policies
in Illinois or click here
to view the top 25 carriers in Illinois.
Since 1983,
Illinois has allowed insurance companies to set their own premium
rates. This is often credited as a factor in keeping Illinois' costs
below the national average. While Illinois carriers are free to
set their own rates, the National Council on Compensation Insurance,
a private organization, issues advisory rates.
After years
of increases, the advisory rates have dropped significantly, despite
continuing inflation and a growing workforce. After adjusting for
inflation, the 2008 rate actually represents a 33% decrease
since 1990. This change is attributed to, among other things,
a shifting industrial mix, greater safety efforts, and better medical
care.
The Illinois
Division of Insurance reviews the advisory rates. It may
be able to assist with problems regarding premiums with an insurance
company. The actual workers' compensation case is decided
by the IWCC.
Insurance
Compliance program
Illinois law
requires employers to obtain workers' compensation insurance, but
a small percentage of employers fail to comply. These employers
enjoy an unfair competitive advantage over law-abiding companies,
while leaving their employees vulnerable if accidents should occur.
Under Section
4(d), an employer that knowingly and willfully fails to obtain insurance
may be fined up to $500 for every day of noncompliance, with a minimum
fine of $10,000. Corporate officers can be held personally liable
if the company fails to pay the penalty. Since 2006, the Commission
has collected over $3 million in fines, while providing workers
the proper legal protection and other employers a more fair competitive
arena. Fines are deposited into the Injured
Workers' Benefit Fund.
In addition,
corporate
officers who are found to have negligently failed to obtain insurance
are guilty of a Class A misdemeanor; if they are found to have knowingly
failed to obtain insurance, they are guilty of a Class 4 felony.
An employer
that knowingly fails to obtain insurance loses its protections under
the Workers' Compensation Act. An employee who is injured
during the time the employer was uninsured may sue the employer
in civil court, where benefits are unlimited. In addition,
during the trial the burden will be upon the employer to prove it
was not negligent.
The Commission
may issue a work-stop order on an employer that has been found to
have knowingly failed to provide insurance. The employer must
then stop all business operations until it provides proof of insurance.
If you suspect
an employer does not have insurance, you may search
our online insurance database, or fill out
our form and mail it to us, or email
our Insurance Compliance Division, or call our Information Unit
(312/814-6611 or toll-free within Illinois 866/352-3033). We will
try to identify the carrier; if we cannot find any evidence of insurance
coverage, we will ask the employer to provide proof of insurance.
Bankrupt
insurers
If an insurance
company or a group workers' compensation trust becomes insolvent,
the Illinois Division of Insurance, Office
of the Special Deputy, takes over the company and performs the
receivership duties. The
receivership/liquidation orders are available online.
Insurance guaranty
associations are established by state law to pay the covered claims
of policyholders and other claimants of an insolvent insurance company.
The workers' compensation claims of most bankrupt insurance companies
are handled by the Illinois
Insurance Guaranty Fund; however, some employers do not meet
the guidelines of the Fund and will not be provided with coverage.
Click here for a list of employers not
covered by the Guaranty Fund.
If
coverage is not provided by the Illinois Insurance Guaranty Fund,
parties may proceed with their claims directly against the employer.
Please
note this list is constantly changing based on incoming claims,
and the list may not be complete due to the Fund’s report
format. We update the list based on information provided from the
Fund.
Any questions regarding claims against the Fund or employers covered
by the Fund can be directed to Illinois Insurance Guaranty Fund
at 312/422-9700.
Balance
billing
By law, employers
are responsible for necessary medical costs that are reasonably
required to cure or relieve the effects of work-related injuries
(Section 8(a)). When providers or insurance companies try
to obtain the unpaid balance of medical bills from injured workers,
it is called balance billing. Effective
7/20/05, balance billing is illegal in Illinois.
New Section
8.2(e) (5-20) of the Act provides a provider may seek payment of
the actual charges from the employee if the employer notifies a
provider that it does not consider the illness or injury to be compensable.
If an employer notifies a provider that it will pay only a portion
of a bill, the provider may seek payment of the unpaid portion from
the employee up to the lesser of the actual charge, the negotiated
rate, or the rate in the fee schedule.
If, however,
an employee informs the provider that a claim is on file at the
Commission, the provider must cease all efforts to collect payment
from the employee. Any statute of limitations or statute of repose
applicable to the provider's efforts to collect from the employee
is tolled from the date that the employee files the application
with the Commission until the date that the provider is permitted
to resume collection.
While the claim
at the Commission is pending, the provider may mail the employee
reminders that the employee will be responsible for payment of the
bill when the provider is able to resume collection efforts. The
reminders shall not be provided to any credit agency.
The provider
may request information about the Commission claim; if the employee
fails to provide the information within 90 days, the provider is
entitled to resume collection efforts and the employee is responsible
for payment of the bills.
Upon final award
or settlement, a provider may resume efforts to collect payment
from the employee and the employee shall be responsible for payment
of any outstanding bills plus interest awarded. If the service is
found compensable, the provider shall not require a payment rate,
excluding interest, greater than the lesser of the actual charge
or payment level set by the Commission in the fee schedule. The
employee is responsible for payment for services found not compensable
unless agreed otherwise by the provider and employee. Services not
compensable are not subject to the fee schedule.
Frequently
Asked Insurance Questions
Disclaimer: This information is not intended to be a full
exposition of the insurance provisions of the Workers’ Compensation
Act. For more information, we suggest you contact an attorney concentrating
in workers’ compensation.
How many employees are required to come under the Act?
One. If you have only one employee,
even a part-time employee, you must obtain workers' compensation
insurance.
There
are rare exceptions; see Section 3 of the Act
or consult an attorney.
Do
employees who are family members have to be insured?
Yes,
unless
1)
they are bona fide corporate officers (see Section 3(17)(b)); or
2)
they work for an agricultural enterprise that employs less than
400 working days of labor per year or they are immediate family
members who reside with the employer (see Section 3(19)).
Is there a waiting period for workers’ compensation coverage?
No.
From the moment they are hired, employees are covered by
the Workers' Compensation Act and must be insured.
I
am a sole proprietor/business partner/corporate officer/member of
a limited liability company. Do I have to buy w.c. insurance?
The short answer is no, but the full answer is a bit longer.
Section 1(b)3 of the Act provides that sole
proprietors* and business partners may elect to come under
the Act or they may choose not to.
There
is a twist, though, in Section 3. It provides that employees who
engage in extra hazardous* occupations must be covered under
the law--but then subsections 3(17) and 3(20) allow sole proprietors,
corporate officers, business partners, and members of limited liability
companies to opt out.
In
summary, if you are a sole proprietor, business partner, corporate
officer, or member of a limited liability company, and...
... |
you
want to come under the Act, you must purchase insurance for
yourself to be covered for a work-related injury or illness. |
... |
you don't
want to be covered, you must choose to opt out, following the
instructions in Section 3(17)(b).
The Commission does not have an opt-out form. An insurance
representative should provide a form if one is desired. |
*
|
If your company is in the CONSTRUCTION business, TRUCKING
business operating at a construction site, or other EXTRA
HAZARDOUS occupations, you should be aware that new law (see
820 ILCS 185, Employee
Classification Act) requires that, in almost all instances,
you must obtain insurance.
Also,
a recent decision by the Illinois Supreme Court, Roberson
v. Industrial Commission, states that referring to a trucker
as an independent contractor, even in a written lease agreement,
does not remove the trucking company's obligation to provide
workers’ compensation insurance for those drivers.
Contact
the Insurance Compliance Unit, an attorney, or a C.P.A. for
more information concerning these businesses. |
Does an
out-of-state company have to provide Illinois workers’ compensation
insurance?
According to
Section 1(b)2 of the
Act, Illinois law covers
* persons whose
employment results in injury within Illinois, or
* persons whose
work is principally localized within Illinois, or
* persons whose
contract of hire was made in Illinois.
That
means that if an out-of-state company conducts business with its
employees in Illinois, i.e., does any work at all in Illinois, even
if all the workers reside in the same state as the company, that
company must provide a workers' compensation insurance policy that
includes Illinois coverage for those workers.
If an employee
from an out-of-state company is injured doing work in Illinois,
he or she has the right to file a claim in Illinois. Only a workers'
compensation insurance policy that includes ILLINOIS on its coverage
is legitimate for this purpose.
The exemptions
explained elsewhere on this page still apply.
I
am a new employer. How do I obtain w.c. insurance?
In Illinois, w.c. insurance is sold in the private sector. You may
contact a licensed insurance agent, perhaps one who specializes
in business owners' insurance. If you cannot find an insurer to
write you a policy, you may sign up or have your agent enroll you
in the assigned risk plan, administered by the National
Council of Compensation Insurance (800/622-4123 (ask for the
Illinois assigned risk plan)).
How
do I know if my employer has workers’ compensation coverage?
By law, employers must post a completed workers’
compensation notice in a conspicuous place in every work site
for all employees to see. You have a right to know this information.
If you do not see this notice, please contact
us.
You
may also search online
for coverage information.
My employer
does not have workers' compensation insurance. What should l do?
Email
the employer's name and address to the Commission's Insurance Compliance
Division, or call us (312/814-6611 or toll-free within Illinois
866/352-3033). The staff will contact the employer and ask for proof
of insurance, but will not mention the name of the informant.
If I report
my employer, do I have to give my name?
No. Anyone reporting
an employer may remain anonymous.
Will
my group health plan or occupational disability insurance cover
workers' compensation cases?
No.
Group health, occupational disability, general liability, disability
or property insurance will not cover workers' compensation liability.
Only a workers’ compensation policy fulfills this requirement.
This coverage must be purchased from a carrier
authorized to write workers' compensation insurance in Illinois.
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