Pam: Barry, can you give us a high level view of how the worker’s compensation system works?
Barry: Sure. Worker’s compensation is a statute, there’s an Illinois statute that’s called the worker’s compensation act. Worker’s comp is a question of state law, and so it’s going to be different from state to state to state. But Illinois actually has a fairly favorable environment for workers who have been hurt on the job.
Now, where worker’s comp came from is back near the turn of the last century there wasn’t a worker’s compensation system that was in place. If somebody got hurt on the job, they had the ability to sue their employer in civil court for injuries. Now, there were all sorts of defenses that really don’t exist anymore that employers had against claims made by their employees, which effectively made it almost impossible for workers who’d been hurt on the job to recover anything if they’d been injured on the job.
So, essentially what happened is workers would get hurt on the job, and there would be no available vehicle for the workers to get medical care, or for their families to receive any type of payment that would allow them to keep roofs over their heads. So, essentially the care and upkeep of these families would be turned over to the community.
So, the basic idea behind worker’s compensation is they’re going to take workplace injuries out of the civil justice system. Worker’s compensation is a no fault system, it doesn’t get heard in the actual court system, there’s an administrative agency in Illinois called the Worker’s Compensation Commission, that hears worker’s compensation cases.
Now, in a lot of ways, the worker’s comp hearings, it has its own set of procedures and its own set of rules. There are some similarities to court hearings, but ultimately all of those decisions get made by an administrative law judge called an arbitrator. Ultimately, there’s a separate system that exists outside the civil justice system, where these kind of cases get heard. It’s a no-fault system, it doesn’t matter who’s to blame for an accident, whether it’s the employer or the employee. If you got hurt on the job, you’re entitled to the benefits.
And the basic idea is that the benefits that are going to be available are going to be benefits that sustain the worker, allow them to keep a roof over their head and food on the table whilst they’re recovering from their injuries. Give them some relatively stable access to quality medical care, and some type of a settlement that’s related to permanency that’s associated with the injury. And that’s where the underlying philosophy of this is that getting hurt on the job is one of these things that happens, it’s a fact of life. And by making these injuries essentially a cost of doing business, the cost of these injuries gets born essentially throughout the whole system, instead of being born specifically by the people who get hurt.
So, with worker’s compensation, when somebody is hurt on the job, there are three basic benefits that you’re entitled to. The first of these is what’s called temporary total disability, which is referred to in the business as TTD. And this is two thirds of your average weekly wage whilst you’re off work. The second one is payment of your medical expenses. And the last benefit that you get is called permanent and partial disability, which is essentially the settlement that you get at the end of the case. And it’s associated with the permanency that’s related to the injury you suffered in the accident.
Pam: Well, who pays benefits in a worker’s compensation case?
Barry: So, the Illinois worker’s compensation act requires employers to do one of two things. They either have to have insurance, or they have to have what’s called a certificate of self-insurance, that’s essentially approved by the state. So, one way or another there’s going to be either an insurance company, or a large solvent employer. I mean think of like Ford motor company for example, who are going to be able to pay the benefits that are due under the worker’s compensation act.
Now, because there’s going to be an insurance company involved on the other side, there’s going to an adjuster who’s going to be making decisions on behalf of the employer once a claim is actually filed.