Illinois workers' compensation insurance

Here are several examples of how workers' compensation insurance coverage helps pay expenses for injured workers:

• A general contractor injures their hand while renovating a home. Workers' comp covers their doctor's appointment and pain medication, and provides disability benefits to replace part of the wages they miss while they are recovering.
• A home health aide develops a back injury from transferring and lifting patients, and can no longer perform their duties. In this instance, workers' compensation would also provide retraining benefits so they could learn the skills to take on a new job.
• An HR consultant trips on the staircase at their office and breaks their leg. Workers' comp covers the cost of the ambulance ride, emergency room visit, surgery, medications, and then two months of physical therapy to help them recover.
• An owner-operator truck driver is injured in an auto accident and hospitalized, but never recovers enough to return to work. They receive permanent disability payments, in addition to compensation for their medical expenses.

There are a few ways to buy a workers' comp policy in Illinois:

• You can buy it from a private insurance company. You could contact each insurer independently to compare their products and rates, but that's where agents and brokers like Insureon come in. As the nation's leading digital insurance agency, Insureon partners with 30+ top-rated insurance carriers to deliver the right coverage for your business. Fill out an easy online application to get started.
• If denied, you can obtain coverage from the assigned risk pool. Businesses with higher risks can buy coverage from the Illinois Assigned Risk Pool, which is administered by the National Council on Compensation Insurance (NCCI).
• You can self-insure your business. Employers that demonstrate sufficient financial strength can apply to the Illinois Workers' Compensation Commission (IWCC) for approval of self-insurance. The Illinois Department of Insurance (IDOI) oversees group self-insurance.

Here's a breakdown of this equation:

• The classification rate reflects your employees' risk. Each worker has a classification code for the type of work they do. Insurers look up those codes in a database to find the associated rate, which is lower for office workers and higher for carpenters, tree trimmers, and others with a higher rate of injuries. Most states, including Illinois, rely on the National Council on Compensation Insurance database.
• The experience modification rate (EMR) reflects your business's risk. The average experience modification rate is 1.0, which means a business is similar in risk to others in its profession. Higher EMRs reflect higher risks, such as a history of claims. The EMR only comes into play for annual workers' comp premiums of at least $5,000, so it's not a factor for many small business owners.
• The insurer multiplies these numbers with your payroll divided by 100 to come up with your workers' comp premium. Workers' compensation audits are typically done each year to ensure your business pays the right premium for this coverage.

When employees are injured at work, they are required to inform their employer within 45 days of the event.

The employer is then obligated to inform the workers’ compensation insurance carrier or administrator. If the employee cannot work for more than three days because of the injury, the employer must also:

• Continue to pay the employee, even if the claim has not yet been made with the insurance company
• Provide a written explanation to the employee of any additional documentation or information that is required for a claim
• Provide a written explanation to the employee as to why benefits are being denied, if the claim is denied
• File the “Employer’s First Report of Injury” with the IWCC

The Illinois Workers’ Compensation Commission facilitates workers’ comp claims and maintains a Handbook on Workers' Compensation and Occupational Diseases that explains benefits and procedures.

The state of Illinois has serious penalties for failure to comply with its workers' compensation laws. Penalties under the Illinois Workers' Compensation Act include:

• An employer will be fined between $500 and $10,000 for failing to carry workers’ compensation insurance, based on the amount of time in noncompliance.
• If the failure to carry coverage is found to be negligent, it is a misdemeanor and carries a fine of $2,500 and maximum 12 months imprisonment.
• A felony conviction for failure to carry workers’ compensation insurance in Illinois is punishable by imprisonment for one to three years and a fine of up to $25,000.
• A corporate officer could be liable for fines if the company fails to pay.

Most workers’ compensation settlements result in a lump-sum payment. Illinois allows payment installments over time in two ways:

• A wage differential claim, which means the employee would return to work for less pay than before the injury and receive settlement payments equal to their previous pay.
• Permanent and total disability, which would be for someone who is not able to return to work.

Although a settlement usually means that the worker has closed their rights to workers’ comp benefits, sometimes medical rights are kept open if the person is likely to require extensive future medical treatment as a result of the injury.

Workers' compensation claims must be filed with the IWCC within two years of the last payment of compensation from the employer or three years from the date of injury, whichever is later.

If the injury is from ongoing or repetitive trauma, and not a specific incident, then the date of injury is considered to be the date on which a reasonable person would have become aware of the injury and the fact that it was caused by employment.