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Risk Management: Illinois Workers' Compensation - Challenges of Handling COVID-19 Claims

Wed, December 01, 2021 4:27 PM | Anonymous

By Lisa Azoory-Keller, Partner, Nyhan Bambrick Kinzie & Lowry

Nearly two years after the beginning of the pandemic, claims handling for COVID-19 cases in workers’ compensation is far from an exact science. Employers across Illinois continue to try to implement best practices for COVID-19 claims with many questions still looming about compensability and case value.

Panic was widespread at the beginning of the pandemic, and this panic was reflected in the quick implementation of new rules surrounding COVID-19 in the arena of workers’ comp. In a short span of time, employers have come a long way in learning how to handle a COVID-19 claim and mitigate exposure.

HISTORY OF THE COVID-19 RULES IN ILLINOIS WORKERS’ COMPENSATION

The first new rule regarding COVID-19 was implemented on April 13, 2020, by the Illinois Workers’ Compensation Commission. In recognition of the potential gravity of COVID-19’s impact on front-line and essential workers, the temporary emergency rule amended the Commission Rules to include a rebuttable presumption in favor of these essential workers. The Commission was able to implement such a rule due to the Illinois Administrative Procedure Act, which allows the use of emergency rulemaking involving a "threat to the public interest, safety or welfare."

The emergency rule was quickly replaced by a new, modified rule that was more detailed. The new rule added "occupational disease" resulting from exposure to COVID-19 as part of the rebuttable presumption. In support of the rule, the Commission explained that employees should not be placed in a situation that would cause more hazard in the state by continuing to work.

Illinois employers heavily opposed the rule’s implementation and broad scope, which ultimately led to the Circuit Court in Sangamon County issuing a temporary restraining order (TRO) and Preliminary Injunction against the Illinois Workers’ Compensation Commission and the Chairman in his official capacity. The efforts were spearheaded by the Illinois Manufacturers’ Association (IMA) and Illinois Retail Merchants Association (IRMA). Although the IMA and IRMA were named as Plaintiffs in the action, they were not alone in opposing the rule, with multiple industry groups supporting the TRO request. On April 27, 2020, the Illinois Workers’ Compensation Commission voted unanimously to repeal the emergency rule.

Approximately one month later on May 21, 2020, the Illinois General Assembly (through an agreed bill process) passed legislation that amended the Illinois Workers’ Occupational Diseases Act to provide a rebuttable presumption in favor of compensability for first responders and front-line workers who contract COVID-19. The amendment was narrower in scope than the Commission’s original emergency rule, which was good news for employers. One source estimated that the difference between the first emergency rule and the legislation could save employers up to $2 billion.

Like the original rule, the new legislation created a rebuttable presumption in favor of compensability for essential workers, but called for an "ordinary" rebuttable presumption standard. Specifically, employers only need to prove that "some" (as opposed to "clear and convincing") evidence is needed to support a finding that the employee contracted COVID-19 from something other than work.

This legislation covered diagnoses made in the timeframe from March 9, 2020, through December 31, 2020, and was then amended to extend to June 30, 2021. The rebuttable presumption does not apply to COVID-19 diagnoses after June 30, 2021.

When the presumption is applicable, employers can rebut the presumption of exposure in the following ways:

Demonstrating that the employee was working from home or on leave for more than 14 consecutive days prior to the injury or incapacity;

Demonstrating that the employer was implementing (to the best of its ability) industry-specific workplace sanitation, social distancing and health and safety practices based on updated guidance issued by the U.S. Centers for Disease Control or Illinois Department of Public Health for at least 14 days prior to the employee’s injury. This includes the use of personal protective equipment such face coverings; or,

Demonstrating that the employee was exposed to COVID-19 by an alternative source.

Pursuant to the legislation, employees also must establish that they were required to encounter members of the general public or work in an employment location with more than 15 employees.

In another piece of good news for employers, the bill allowed for employers to assert a credit for temporary total disability benefits (TTD) if the employee was paid other benefits (such as sick leave benefits) if the employee contracts COVID-19.

If the employer successfully rebuts the presumption of exposure, the presumption ceases to operate and the evidence is presented at trial as if the presumption never existed. In this scenario, the employee would need to prove – by a preponderance of the evidence – that the COVID-19 exposure arose out of and in the course of the employment with the respondent.

THE IMPACT OF THE COVID-19 PANDEMIC ON CLAIMS HANDLING

Both employees and employers remain in unchartered territory regarding the value of COVID-19 cases. In Illinois, in order to receive permanent partial disability benefits (PPD), there must be some sort of permanent partial or permanent total disability as a result of the injury/exposure. If the employee fully recovers from COVID-19, no PPD should be owed, even if the employee was hospitalized. With orthopedic injuries (which are the vast majority of injuries in workers’ compensation), employees may have lingering residual symptoms that justify the worker’s claim for an award for permanent partial disability. However, where no residual symptoms exist, the employer should theoretically not be responsible for paying any settlement. Unfortunately for employers, this is not the way COVID-19 claims are being handled. Employee representatives believe that the value of a COVID-19 claim is bolstered with hospitalization, medication or time off. Employers are reluctant to pay anything on COVID-19 claims involving little treatment, as it would set precedent in the workplace for other COVID-19 claims to surface.

BEST PRACTICES FOR EMPLOYERS

Employers must remain vigilant about safety precautions and mitigation of COVID-19 exposure allegations even when it seems that the pandemic is waning. Employers should take the following steps when an employee files a workers’ compensation claim for benefits due to COVID-19 exposure:

Initiate efforts at contact tracing and determining alternative sources of exposure. For the safety of other employees, it is important to ask questions of the employee regarding sources of exposure and timeline of exposure.

Make sure to document policies on PPE, and have employees sign off on their understanding of safety measures in the workplace. Ideally, training sessions are done periodically to address appropriate use of PPE.

Check in on the employee and express a genuine support for the employee’s recovery and return to work.

If the workers’ compensation case is being denied, make sure the employee understands what other benefits may be available during their recovery and time off work.

Whether the rebuttable presumption is applicable or not, employers should still take steps to rebut work-relatedness where exposure cannot be pinpointed. The costs of the pandemic have already been heavy on Illinois employers, let alone the increase in workers’ compensation claims. As always, employer groups should remain vigilant about opposing new rules and legislation that pose a threat to doing business in Illinois.

Lisa Azoory-Keller is a Partner at the Nyhan Bambrick Kinzie & Lowry law firm in Chicago. Contact Ms. Azoory-Keller at lazoory-keller@nbkllaw.com or (312) 629-0288.


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