By: Anthony J. Caruso, Esq.
Workers' compensation in Illinois is a major cost in doing business for most employers. Therefore, business necessity requires that workers' compensation costs be closely scrutinized by employers.
Below are several areas that affect workers' compensation cost factors.
The best method of controlling workers' compensation claims is to prevent accidents from happening. Most safety experts agree that a comprehensive safety program is worth the effort in reduced workers' compensation costs.
Safety programs should do the following:
- Stress a clean and safe work environment-free of harmful conditions and hazardous chemicals.
- Utilize in-house and outside safety experts, ergonomists and insurance consultants.
- Educate all employees as to the proper procedures for the use of equipment and their anatomy.
- Eliminate any repetitive task or individual act likely to cause injury.
- Provide preventive appliances such as wrist splints and back supports along with ergonomically-designed work areas.
- Comply with all Occupational Safety and Health Act, federal and state regulations.
A happy employee is probably less likely to file a workers' compensation claim than a disgruntled one. Studies have shown that good employer/employee relations may reduce the number of nuisance or questionable workers' compensation claims. The employer's approach should be to:
- Fairly compensate legitimate claims and strenuously defend questionable ones.
- Communicate continually with the injured employee as to his/her well-being, medical treatment and return-to-work status.
- Arrange for the prompt payment of the employee's lost time benefits and medical bills, if justified.
Accident Reporting and Investigation
OSHA and the Illinois Workers' Compensation Act require employers to report workers' compensation injuries and occupational diseases in a timely manner. The reporting process mandates some type of employer investigation. Thus, the nature and extent of the employer's investigation may determine if an alleged injury is compensable.
An accident reporting and investigation system should include:
- Notice to all employees as to the accident reporting procedures and the proper chain of command for notification to supervisors.
- Designation of an appropriate individual to gather and freeze the facts of an alleged injury (i.e., securing witness' statements).
- Monitoring procedures as to the claim's status with the workers' compensation carrier or representative and the Illinois Workers' Compensation Commission.
The time and effort spent in accident investigation reduces workers' compensation costs by eliminating questionable or fraudulent claims.
The employer and the employee have rights and responsibilities as to medical benefits under the Illinois Workers' Compensation Act.
In Illinois, the employee's right to choice of treating physician or doctor in the chain of referral is limited. To reduce medical costs related to compensable accidental injuries/occupational diseases, the employer or its representative should do the following:
- Attempt to direct the injured employee for treatment by the approved company medical provider. This allows the employer to control indirectly the extent of medical care and cost.
- Obtain second opinions by qualified physicians when surgery is recommended.
- Secure independent medical evaluation of the injured employee when the medical care seems excessive as compared to the alleged injury.
- Arrange for extensive hospital and doctor bills to be audited for necessity and reasonableness.
Medical treatment is a major cost driver in the Illinois workers' compensation system. Controlling medical charges will significantly lower workers' compensation dollars spent on an injured employee.
Lost Time/Permanent Disability
In Illinois, an employee is entitled to compensation for lost time incurred as a result of a workers' compensation injury. In addition, the injured employee is entitled to compensation for permanent disabilities. Employers may regulate employees' entitlement to these benefits through the following approaches:
- Establish a light duty/restricted work program if required by business necessity, and if it complies as a reasonable accommodation under the Americans with Disabilities Act (ADA).
- Consider using vocational rehabilitation experts.
- Secure the injured employee's return to work with another employer when appropriate.
- Obtain an independent medical evaluation of the injured employer to minimize any compensable permanent disabilities.
Insured v. Self-Insured
Illinois employers have an obligation to pay workers' compensation benefits to injured employees. This obligation may be paid directly by an employer on a self-insured basis, by a workers' compensation insurance company or by a state fund.
Illinois allows employers to be insured or self-insured (individually or in a pool/trust of self-insured employers). An employer should consider these factors in selecting insured versus self-insured status:
- In a competitive market state, secure quotes from your insurance broker for a number of workers' compensation carriers.
- Make sure the party underwriting the risk has assessed your employees in the proper job classifications and rates in determining the insurance premium.
- Arrange for an analysis of your company's potential for self-insured status. Check out self-insured pools/trusts for your industry.
Questions? Call Attorney Tony Caruso of Wessels Sherman's St. Charles, Illinois office: 630-377-1554 or email him at firstname.lastname@example.org.