TABLE OF CONTENTS

Overview
Insurance Compliance program
Bankrupt insurers 
Balance billing
Workers compensation insurance fraud

FREQUENTLY ASKED INSURANCE QUESTIONS

How many employees does an employer have to have 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 Illinois 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.  Employers that need to obtain insurance coverage may contact a licensed, professional insurance agent, perhaps one who specializes in business owners' insurance. Employers that cannot find an insurer to write a policy 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 374 carriers writing w.c. policies in Illinois or click here to view the top 25 carriers in Illinois.

The National Council on Compensation Insurance, a private organization, issues advisory insurance rates but, since 1983, Illinois has allowed insurance companies to set their own rates. This is often credited as a factor in keeping Illinois' costs below the national average. A $100 premium in 1990 would cost only $112 in 2009.

The Illinois Division of Insurance reviews the NCCI 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.

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. 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 knowledgeable about workers’ compensation.

How many employees does an employer have to have 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

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, and you have an insurance policy for other employees, you must notify your carrier in writing of your intention to opt out, following the instructions in Section 3(17)(b). The Commission does not have an opt-out form and does not require individuals to use an opt-out form.
*	If your company is in the construction business, trucking business operating at a construction site, or other extrahazardous 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.