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HB5228 Enrolled LRB104 20014 SPS 33465 b
1 AN ACT concerning employment.
2 Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
4 Section 5. The Illinois Insurance Code is amended by
5 changing Section 416 as follows:
6 (215 ILCS 5/416)
7 Sec. 416. Illinois Workers' Compensation Commission
8 Operations Fund Surcharge.
9 (a) As of July 30, 2004 (the effective date of Public Act
10 93-840), every company licensed or authorized by the Illinois
11 Department of Insurance and insuring employers' liabilities
12 arising under the Workers' Compensation Act or the Workers'
13 Occupational Diseases Act shall remit to the Director a
14 surcharge based upon the annual direct written premium, as
15 reported under Section 136 of this Act, of the company in the
16 manner provided in this Section. Such proceeds shall be
17 deposited into the Illinois Workers' Compensation Commission
18 Operations Fund as established in the Workers' Compensation
19 Act. If a company survives or was formed by a merger,
20 consolidation, reorganization, or reincorporation, the direct
21 written premiums of all companies party to the merger,
22 consolidation, reorganization, or reincorporation shall, for
23 purposes of determining the amount of the fee imposed by this
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1 Section, be regarded as those of the surviving or new company.
2 (b) Beginning on July 30, 2004 (the effective date of
3 Public Act 93-840) and on July 1 of each year thereafter
4 through 2023, the Director shall charge an annual Illinois
5 Workers' Compensation Commission Operations Fund Surcharge
6 from every company subject to subsection (a) of this Section
7 equal to 1.01% of its direct written premium for insuring
8 employers' liabilities arising under the Workers' Compensation
9 Act or Workers' Occupational Diseases Act as reported in each
10 company's annual statement filed for the previous year as
11 required by Section 136. Within 15 days after June 5, 2024 (the
12 effective date of Public Act 103-590) and on July 1 of each
13 year thereafter, the Director shall charge an annual Illinois
14 Workers' Compensation Commission Operations Fund Surcharge
15 from every company subject to subsection (a) of this Section
16 equal to 1.092% of its direct written premium for insuring
17 employers' liabilities arising under the Workers' Compensation
18 Act or Workers' Occupational Diseases Act as reported in each
19 company's annual statement filed for the previous year as
20 required by Section 136. The Illinois Workers' Compensation
21 Commission Operations Fund Surcharge shall be collected by
22 companies subject to subsection (a) of this Section as a
23 separately stated surcharge on insured employers at the rate
24 of 1.092% of direct written premium for the surcharge due in
25 2024 and each year thereafter, plus an additional amount
26 determined under subsection (b-5) beginning in 2026. The
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1 Illinois Workers' Compensation Commission Operations Fund
2 Surcharge shall not be collected by companies subject to
3 subsection (a) of this Section from any employer that
4 self-insures its liabilities arising under the Workers'
5 Compensation Act or Workers' Occupational Diseases Act,
6 provided that the employer has paid the Illinois Workers'
7 Compensation Commission Operations Fund Fee pursuant to
8 Section 4d of the Workers' Compensation Act. All sums
9 collected by the Department of Insurance under the provisions
10 of this Section shall be paid promptly after the receipt of the
11 same, accompanied by a detailed statement thereof, into the
12 Illinois Workers' Compensation Commission Operations Fund in
13 the State treasury.
14 (b-5) As used in this subsection:
15 "Annual funding target for the year" means $7,000,000 for
16 2026 and, for each year thereafter, the previous year's annual
17 funding target increased by 3.5%.
18 "Statewide underwriting gain for the previous year" means
19 the sum of the underwriting gains for all companies that had an
20 underwriting gain for their workers' compensation and excess
21 workers' compensation lines in this State, as reported in the
22 companies' annual statements filed for the previous year under
23 Section 136.
24 "Underwriting gain" means, if the difference is a positive
25 dollar amount, the difference between direct earned premiums
26 and the sum of the following expenses and fees:
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1 (A) direct losses incurred;
2 (B) direct defense and cost containment expense
3 incurred;
4 (C) commission and brokerage expenses; and
5 (D) taxes, licenses, and fees.
6 On or before July 1, 2026 or 15 days after the effective
7 date of this amendatory Act of the 104th General Assembly,
8 whichever is later, and on or before July 1 of each year
9 thereafter, in addition to the amount required by subsections
10 (a) and (b), the Director shall charge an amount to be included
11 in a company's obligation to pay the annual Illinois Workers'
12 Compensation Commission Operations Fund Surcharge under this
13 Section. The additional amount shall be collected from every
14 company subject to subsection (a) that had an underwriting
15 gain for its workers' compensation and excess workers'
16 compensation lines in this State, as reported in the company's
17 annual statement filed for the previous year under Section
18 136. All provisions of this Section for the administration and
19 enforcement of the portion of the annual Illinois Workers'
20 Compensation Commission Operations Fund Surcharge described in
21 subsection (b) shall apply to the additional amount described
22 in this subsection.
23 The additional amount included in each company's surcharge
24 for a given year shall be a percentage of the company's
25 underwriting gain for its workers' compensation and excess
26 workers' compensation lines in this State, as reported in the
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1 company's annual statement filed for the previous year under
2 Section 136. Each year's percentage shall be calculated as the
3 annual funding target for the year divided by the statewide
4 underwriting gain for the previous year multiplied by 100.
5 Before collecting the additional amount each year, the
6 Department shall publish a company bulletin demonstrating the
7 calculation of the percentage in accordance with this
8 subsection. The bulletin shall include or contain a hyperlink
9 to download the underlying data from the companies' annual
10 statements that the Department used to perform the
11 calculation.
12 The additional amount included in the surcharge shall be
13 deposited into the Illinois Workers' Compensation Commission
14 Operations Fund in accordance with the Workers' Compensation
15 Act. If a company survives or was formed by a merger,
16 consolidation, reorganization, or reincorporation, the
17 underwriting gain in this State for all companies that are
18 parties to the merger, consolidation, reorganization, or
19 reincorporation shall, for purposes of determining the
20 additional amount imposed by this subsection, be regarded as
21 those of the surviving or new company.
22 (c) In addition to the authority specifically granted
23 under Article XXV of this Code, the Director shall have such
24 authority to adopt rules or establish forms as may be
25 reasonably necessary for purposes of enforcing this Section.
26 The Director shall also have authority to defer, waive, or
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1 abate the surcharge or any penalties imposed by this Section
2 if in the Director's opinion the company's solvency and
3 ability to meet its insured obligations would be immediately
4 threatened by payment of the surcharge due.
5 (d) When a company fails to pay the full amount of any
6 annual Illinois Workers' Compensation Commission Operations
7 Fund Surcharge of $100 or more due under this Section, there
8 shall be added to the amount due as a penalty an amount equal
9 to 10% of the deficiency for each month or part of a month that
10 the deficiency remains unpaid.
11 (e) The Department of Insurance may enforce the collection
12 of any delinquent payment, penalty, or portion thereof by
13 legal action or in any other manner by which the collection of
14 debts due the State of Illinois may be enforced under the laws
15 of this State.
16 (f) Whenever it appears to the satisfaction of the
17 Director that a company has paid pursuant to this Act an
18 Illinois Workers' Compensation Commission Operations Fund
19 Surcharge in an amount in excess of the amount legally
20 collectable from the company, the Director shall issue a
21 credit memorandum for an amount equal to the amount of such
22 overpayment. A credit memorandum may be applied for the 2-year
23 period from the date of issuance, against the payment of any
24 amount due during that period under the surcharge imposed by
25 this Section or, subject to reasonable rule of the Department
26 of Insurance including requirement of notification, may be
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1 assigned to any other company subject to regulation under this
2 Act. Any application of credit memoranda after the period
3 provided for in this Section is void.
4 (g) Annually, the Governor may direct a transfer of up to
5 2% of all moneys collected under this Section to the Insurance
6 Financial Regulation Fund.
7 (Source: P.A. 103-590, eff. 6-5-24; 104-417, eff. 8-15-25.)
8 Section 10. The Workers' Compensation Act is amended by
9 changing Sections 4, 7, 8.7, and 12 as follows:
10 (820 ILCS 305/4) (from Ch. 48, par. 138.4)
11 (Text of Section from P.A. 101-40, 102-37, and 103-590)
12 Sec. 4. (a) Any employer, including but not limited to
13 general contractors and their subcontractors, who shall come
14 within the provisions of Section 3 of this Act, and any other
15 employer who shall elect to provide and pay the compensation
16 provided for in this Act shall:
17 (1) File with the Commission annually an application
18 for approval as a self-insurer which shall include a
19 current financial statement, and annually, thereafter, an
20 application for renewal of self-insurance, which shall
21 include a current financial statement. Said application
22 and financial statement shall be signed and sworn to by
23 the president or vice president and secretary or assistant
24 secretary of the employer if it be a corporation, or by all
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1 of the partners, if it be a copartnership, or by the owner
2 if it be neither a copartnership nor a corporation. All
3 initial applications and all applications for renewal of
4 self-insurance must be submitted at least 60 days prior to
5 the requested effective date of self-insurance. An
6 employer may elect to provide and pay compensation as
7 provided for in this Act as a member of a group workers'
8 compensation pool under Article V 3/4 of the Illinois
9 Insurance Code. If an employer becomes a member of a group
10 workers' compensation pool, the employer shall not be
11 relieved of any obligations imposed by this Act.
12 If the sworn application and financial statement of
13 any such employer does not satisfy the Commission of the
14 financial ability of the employer who has filed it, the
15 Commission shall require such employer to,
16 (2) Furnish security, indemnity or a bond guaranteeing
17 the payment by the employer of the compensation provided
18 for in this Act, provided that any such employer whose
19 application and financial statement shall not have
20 satisfied the commission of his or her financial ability
21 and who shall have secured his liability in part by excess
22 liability insurance shall be required to furnish to the
23 Commission security, indemnity or bond guaranteeing his or
24 her payment up to the effective limits of the excess
25 coverage, or
26 (3) Insure his entire liability to pay such
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1 compensation in some insurance carrier authorized,
2 licensed, or permitted to do such insurance business in
3 this State. Every policy of an insurance carrier, insuring
4 the payment of compensation under this Act shall cover all
5 the employees and the entire compensation liability of the
6 insured: Provided, however, that any employer may insure
7 his or her compensation liability with 2 or more insurance
8 carriers or may insure a part and qualify under subsection
9 1, 2, or 4 for the remainder of his or her liability to pay
10 such compensation, subject to the following two
11 provisions:
12 Firstly, the entire compensation liability of the
13 employer to employees working at or from one location
14 shall be insured in one such insurance carrier or
15 shall be self-insured, and
16 Secondly, the employer shall submit evidence
17 satisfactorily to the Commission that his or her
18 entire liability for the compensation provided for in
19 this Act will be secured. Any provisions in any
20 policy, or in any endorsement attached thereto,
21 attempting to limit or modify in any way, the
22 liability of the insurance carriers issuing the same
23 except as otherwise provided herein shall be wholly
24 void.
25 Nothing herein contained shall apply to policies of
26 excess liability carriage secured by employers who have
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1 been approved by the Commission as self-insurers, or
2 (4) Make some other provision, satisfactory to the
3 Commission, for the securing of the payment of
4 compensation provided for in this Act, and
5 (5) Upon becoming subject to this Act and thereafter
6 as often as the Commission may in writing demand, file
7 with the Commission in form prescribed by it evidence of
8 his or her compliance with the provision of this Section.
9 (a-1) Regardless of its state of domicile or its principal
10 place of business, an employer shall make payments to its
11 insurance carrier or group self-insurance fund, where
12 applicable, based upon the premium rates of the situs where
13 the work or project is located in Illinois if:
14 (A) the employer is engaged primarily in the building
15 and construction industry; and
16 (B) subdivision (a)(3) of this Section applies to the
17 employer or the employer is a member of a group
18 self-insurance plan as defined in subsection (1) of
19 Section 4a.
20 The Illinois Workers' Compensation Commission shall impose
21 a penalty upon an employer for violation of this subsection
22 (a-1) if:
23 (i) the employer is given an opportunity at a hearing
24 to present evidence of its compliance with this subsection
25 (a-1); and
26 (ii) after the hearing, the Commission finds that the
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1 employer failed to make payments upon the premium rates of
2 the situs where the work or project is located in
3 Illinois.
4 The penalty shall not exceed $1,000 for each day of work
5 for which the employer failed to make payments upon the
6 premium rates of the situs where the work or project is located
7 in Illinois, but the total penalty shall not exceed $50,000
8 for each project or each contract under which the work was
9 performed.
10 Any penalty under this subsection (a-1) must be imposed
11 not later than one year after the expiration of the applicable
12 limitation period specified in subsection (d) of Section 6 of
13 this Act. Penalties imposed under this subsection (a-1) shall
14 be deposited into the Illinois Workers' Compensation
15 Commission Operations Fund, a special fund that is created in
16 the State treasury. Subject to appropriation, moneys in the
17 Fund shall be used solely for the operations of the Illinois
18 Workers' Compensation Commission, the salaries and benefits of
19 the Self-Insurers Advisory Board employees, the operating
20 costs of the Self-Insurers Advisory Board, and by the
21 Department of Insurance for the purposes authorized in
22 subsection (c) of Section 25.5 of this Act.
23 (a-2) Every Employee Leasing Company (ELC), as defined in
24 Section 15 of the Employee Leasing Company Act, shall at a
25 minimum provide the following information to the Commission or
26 any entity designated by the Commission regarding each
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1 workers' compensation insurance policy issued to the ELC:
2 (1) Any client company of the ELC listed as an
3 additional named insured.
4 (2) Any informational schedule attached to the master
5 policy that identifies any individual client company's
6 name, FEIN, and job location.
7 (3) Any certificate of insurance coverage document
8 issued to a client company specifying its rights and
9 obligations under the master policy that establishes both
10 the identity and status of the client, as well as the dates
11 of inception and termination of coverage, if applicable.
12 (a-3) Any corporation, limited liability company, or
13 partnership engaged in activities requiring licensure by a
14 State agency, for which proof that it has insured its workers'
15 compensation liability is a requirement for licensure, that
16 fails to satisfy a requirement outlined in paragraph (1), (2),
17 (3), or (4) of subsection (a) shall be subject to civil
18 penalties under subsection (d) unless it shows by clear and
19 convincing evidence that it was not operating during the time
20 its license was active.
21 (b) The sworn application and financial statement, or
22 security, indemnity or bond, or amount of insurance, or other
23 provisions, filed, furnished, carried, or made by the
24 employer, as the case may be, shall be subject to the approval
25 of the Commission.
26 Deposits under escrow agreements shall be cash, negotiable
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1 United States government bonds or negotiable general
2 obligation bonds of the State of Illinois. Such cash or bonds
3 shall be deposited in escrow with any State or National Bank or
4 Trust Company having trust authority in the State of Illinois.
5 Upon the approval of the sworn application and financial
6 statement, security, indemnity or bond or amount of insurance,
7 filed, furnished or carried, as the case may be, the
8 Commission shall send to the employer written notice of its
9 approval thereof. The certificate of compliance by the
10 employer with the provisions of subparagraphs (2) and (3) of
11 paragraph (a) of this Section shall be delivered by the
12 insurance carrier to the Illinois Workers' Compensation
13 Commission within five days after the effective date of the
14 policy so certified. The insurance so certified shall cover
15 all compensation liability occurring during the time that the
16 insurance is in effect and no further certificate need be
17 filed in case such insurance is renewed, extended or otherwise
18 continued by such carrier. The insurance so certified shall
19 not be cancelled or in the event that such insurance is not
20 renewed, extended or otherwise continued, such insurance shall
21 not be terminated until at least 10 days after receipt by the
22 Illinois Workers' Compensation Commission of notice of the
23 cancellation or termination of said insurance; provided,
24 however, that if the employer has secured insurance from
25 another insurance carrier, or has otherwise secured the
26 payment of compensation in accordance with this Section, and
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1 such insurance or other security becomes effective prior to
2 the expiration of the 10 days, cancellation or termination
3 may, at the option of the insurance carrier indicated in such
4 notice, be effective as of the effective date of such other
5 insurance or security.
6 (c) Whenever the Commission shall find that any
7 corporation, company, association, aggregation of individuals,
8 reciprocal or interinsurers exchange, or other insurer
9 effecting workers' compensation insurance in this State shall
10 be insolvent, financially unsound, or unable to fully meet all
11 payments and liabilities assumed or to be assumed for
12 compensation insurance in this State, or shall practice a
13 policy of delay or unfairness toward employees in the
14 adjustment, settlement, or payment of benefits due such
15 employees, the Commission may after reasonable notice and
16 hearing order and direct that such corporation, company,
17 association, aggregation of individuals, reciprocal or
18 interinsurers exchange, or insurer, shall from and after a
19 date fixed in such order discontinue the writing of any such
20 workers' compensation insurance in this State. Subject to such
21 modification of the order as the Commission may later make on
22 review of the order, as herein provided, it shall thereupon be
23 unlawful for any such corporation, company, association,
24 aggregation of individuals, reciprocal or interinsurers
25 exchange, or insurer to effect any workers' compensation
26 insurance in this State. A copy of the order shall be served
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1 upon the Director of Insurance by registered mail. Whenever
2 the Commission finds that any service or adjustment company
3 used or employed by a self-insured employer or by an insurance
4 carrier to process, adjust, investigate, compromise or
5 otherwise handle claims under this Act, has practiced or is
6 practicing a policy of delay or unfairness toward employees in
7 the adjustment, settlement or payment of benefits due such
8 employees, the Commission may after reasonable notice and
9 hearing order and direct that such service or adjustment
10 company shall from and after a date fixed in such order be
11 prohibited from processing, adjusting, investigating,
12 compromising or otherwise handling claims under this Act.
13 Whenever the Commission finds that any self-insured
14 employer has practiced or is practicing delay or unfairness
15 toward employees in the adjustment, settlement or payment of
16 benefits due such employees, the Commission may, after
17 reasonable notice and hearing, order and direct that after a
18 date fixed in the order such self-insured employer shall be
19 disqualified to operate as a self-insurer and shall be
20 required to insure his entire liability to pay compensation in
21 some insurance carrier authorized, licensed and permitted to
22 do such insurance business in this State, as provided in
23 subparagraph 3 of paragraph (a) of this Section.
24 All orders made by the Commission under this Section shall
25 be subject to review by the courts, said review to be taken in
26 the same manner and within the same time as provided by Section
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1 19 of this Act for review of awards and decisions of the
2 Commission, upon the party seeking the review filing with the
3 clerk of the court to which said review is taken a bond in an
4 amount to be fixed and approved by the court to which the
5 review is taken, conditioned upon the payment of all
6 compensation awarded against the person taking said review
7 pending a decision thereof and further conditioned upon such
8 other obligations as the court may impose. Upon the review the
9 Circuit Court shall have power to review all questions of fact
10 as well as of law. The penalty hereinafter provided for in this
11 paragraph shall not attach and shall not begin to run until the
12 final determination of the order of the Commission.
13 (d) Whenever a Commissioner, with due process and after a
14 hearing, determines an employer has knowingly failed to
15 provide coverage as required by paragraph (a) of this Section,
16 the failure shall be deemed an immediate serious danger to
17 public health, safety, and welfare sufficient to justify
18 service by the Commission of a work-stop order on such
19 employer, requiring the cessation of all business operations
20 of such employer at the place of employment or job site. If a
21 business is declared to be extra hazardous, as defined in
22 Section 3, a Commissioner may issue an emergency work-stop
23 order on such an employer ex parte, prior to holding a hearing,
24 requiring the cessation of all business operations of such
25 employer at the place of employment or job site while awaiting
26 the ruling of the Commission. Whenever a Commissioner issues
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1 an emergency work-stop order, the Commission shall issue a
2 notice of emergency work-stop hearing to be posted at the
3 employer's places of employment and job sites. Any law
4 enforcement agency in the State shall, at the request of the
5 Commission, render any assistance necessary to carry out the
6 provisions of this Section, including, but not limited to,
7 preventing any employee of such employer from remaining at a
8 place of employment or job site after a work-stop order has
9 taken effect. Any work-stop order shall be lifted upon proof
10 of insurance as required by this Act. Any orders under this
11 Section are appealable under Section 19(f) to the Circuit
12 Court.
13 Any individual employer, corporate officer or director of
14 a corporate employer, partner of an employer partnership, or
15 member of an employer limited liability company who knowingly
16 fails to provide coverage as required by paragraph (a) of this
17 Section is guilty of a Class 4 felony. This provision shall not
18 apply to any corporate officer or director of any
19 publicly-owned corporation. Each day's violation constitutes a
20 separate offense. The State's Attorney of the county in which
21 the violation occurred, or the Attorney General, shall bring
22 such actions in the name of the People of the State of
23 Illinois, or may, in addition to other remedies provided in
24 this Section, bring an action for an injunction to restrain
25 the violation or to enjoin the operation of any such employer.
26 Any individual employer, corporate officer or director of
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1 a corporate employer, partner of an employer partnership, or
2 member of an employer limited liability company who
3 negligently fails to provide coverage as required by paragraph
4 (a) of this Section is guilty of a Class A misdemeanor. This
5 provision shall not apply to any corporate officer or director
6 of any publicly-owned corporation. Each day's violation
7 constitutes a separate offense. The State's Attorney of the
8 county in which the violation occurred, or the Attorney
9 General, shall bring such actions in the name of the People of
10 the State of Illinois.
11 The criminal penalties in this subsection (d) shall not
12 apply where there exists a good faith dispute as to the
13 existence of an employment relationship. Evidence of good
14 faith shall include, but not be limited to, compliance with
15 the definition of employee as used by the Internal Revenue
16 Service.
17 All investigative actions must be acted upon within 90
18 days of the issuance of the complaint. Employers who are
19 subject to and who knowingly fail to comply with this Section
20 shall not be entitled to the benefits of this Act during the
21 period of noncompliance, but shall be liable in an action
22 under any other applicable law of this State. In the action,
23 such employer shall not avail himself or herself of the
24 defenses of assumption of risk or negligence or that the
25 injury was due to a co-employee. In the action, proof of the
26 injury shall constitute prima facie evidence of negligence on
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1 the part of such employer and the burden shall be on such
2 employer to show freedom of negligence resulting in the
3 injury. The employer shall not join any other defendant in any
4 such civil action. Nothing in this amendatory Act of the 94th
5 General Assembly shall affect the employee's rights under
6 subdivision (a)3 of Section 1 of this Act. Any employer or
7 carrier who makes payments under subdivision (a)3 of Section 1
8 of this Act shall have a right of reimbursement from the
9 proceeds of any recovery under this Section.
10 An employee of an uninsured employer, or the employee's
11 dependents in case death ensued, may, instead of proceeding
12 against the employer in a civil action in court, file an
13 application for adjustment of claim with the Commission in
14 accordance with the provisions of this Act and the Commission
15 shall hear and determine the application for adjustment of
16 claim in the manner in which other claims are heard and
17 determined before the Commission.
18 All proceedings under this subsection (d) shall be
19 reported on an annual basis to the Workers' Compensation
20 Advisory Board.
21 An investigator with the Department of Insurance may issue
22 a citation to any employer that is not in compliance with its
23 obligation to have workers' compensation insurance under this
24 Act. The amount of the fine shall be based on the period of
25 time the employer was in non-compliance, but shall be no less
26 than $500, and shall not exceed $10,000. An employer that has
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1 been issued a citation shall pay the fine to the Department of
2 Insurance and provide to the Department of Insurance proof
3 that it obtained the required workers' compensation insurance
4 within 10 days after the citation was issued. This Section
5 does not affect any other obligations this Act imposes on
6 employers.
7 Upon a finding by the Commission, after reasonable notice
8 and hearing, of the knowing and willful failure or refusal of
9 an employer to comply with any of the provisions of paragraph
10 (a) of this Section, the failure or refusal of an employer,
11 service or adjustment company, or an insurance carrier to
12 comply with any order of the Illinois Workers' Compensation
13 Commission pursuant to paragraph (c) of this Section
14 disqualifying him or her to operate as a self insurer and
15 requiring him or her to insure his or her liability, or the
16 knowing and willful failure of an employer to comply with a
17 citation issued by an investigator with the Department of
18 Insurance, the Commission may assess a civil penalty of up to
19 $500 per day for each day of such failure or refusal after the
20 effective date of this amendatory Act of 1989. The minimum
21 penalty under this Section shall be the sum of $10,000. Each
22 day of such failure or refusal shall constitute a separate
23 offense. The Commission may assess the civil penalty
24 personally and individually against the corporate officers and
25 directors of a corporate employer, the partners of an employer
26 partnership, and the members of an employer limited liability
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1 company, after a finding of a knowing and willful refusal or
2 failure of each such named corporate officer, director,
3 partner, or member to comply with this Section. The liability
4 for the assessed penalty shall be against the named employer
5 first, and if the named employer fails or refuses to pay the
6 penalty to the Commission within 30 days after the final order
7 of the Commission, then the named corporate officers,
8 directors, partners, or members who have been found to have
9 knowingly and willfully refused or failed to comply with this
10 Section shall be liable for the unpaid penalty or any unpaid
11 portion of the penalty. Upon investigation by the Department
12 of Insurance, the Attorney General shall have the authority to
13 prosecute all proceedings to enforce the civil and
14 administrative provisions of this Section before the
15 Commission. The Commission and the Department of Insurance
16 shall promulgate procedural rules for enforcing this Section
17 relating to their respective duties prescribed herein.
18 If an employer is found to be in non-compliance with any
19 provisions of paragraph (a) of this Section more than once,
20 all minimum penalties will double. Therefore, upon the failure
21 or refusal of an employer, service or adjustment company, or
22 insurance carrier to comply with any order of the Commission
23 pursuant to paragraph (c) of this Section disqualifying him or
24 her to operate as a self-insurer and requiring him or her to
25 insure his or her liability, or the knowing and willful
26 failure of an employer to comply with a citation issued by an
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1 investigator with the Department of Insurance, the Commission
2 may assess a civil penalty of up to $1,000 per day for each day
3 of such failure or refusal after the effective date of this
4 amendatory Act of the 101st General Assembly. The minimum
5 penalty under this Section shall be the sum of $20,000. In
6 addition, employers with 2 or more violations of any
7 provisions of paragraph (a) of this Section may not
8 self-insure for one year or until all penalties are paid.
9 A Commission decision imposing penalties under this
10 Section may be judicially reviewed only as described in
11 Section 19(f). After expiration of the period for seeking
12 judicial review, the Commission's final decision imposing
13 penalties may be enforced in the same manner as a judgment
14 entered by a court of competent jurisdiction. The Commission's
15 final decision imposing penalties is a debt due and owing to
16 the State and can be enforced to the same extent as a judgment
17 entered by a circuit court. The Attorney General shall
18 represent the Commission and the Department of Insurance in
19 any action challenging the final decision in circuit court. If
20 the court affirms the Commission's decision, the court shall
21 enter judgment against the employer in the amount of the fines
22 assessed by the Commission. The Attorney General shall make
23 reasonable efforts to collect the amounts due under the
24 Commission's decision.
25 Any individual employer, corporate officer or director of
26 a corporate employer, partner of an employer partnership, or
HB5228 Enrolled - 23 - LRB104 20014 SPS 33465 b
1 member of an employer limited liability company who, with the
2 intent to avoid payment of compensation under this Act to an
3 injured employee or the employee's dependents, knowingly
4 transfers, sells, encumbers, assigns, or in any manner
5 disposes of, conceals, secretes, or destroys any property
6 belonging to the employer, officer, director, partner, or
7 member is guilty of a Class 4 felony.
8 Penalties and fines collected pursuant to this paragraph
9 (d) shall be deposited upon receipt into a special fund which
10 shall be designated the Injured Workers' Benefit Fund, of
11 which the State Treasurer is ex-officio custodian, such
12 special fund to be held and disbursed in accordance with this
13 paragraph (d) for the purposes hereinafter stated in this
14 paragraph (d), upon the final order of the Commission. The
15 Injured Workers' Benefit Fund shall be deposited the same as
16 are State funds and any interest accruing thereon shall be
17 added thereto every 6 months. The Injured Workers' Benefit
18 Fund is subject to audit the same as State funds and accounts
19 and is protected by the general bond given by the State
20 Treasurer. The Injured Workers' Benefit Fund is considered
21 always appropriated for the purposes of disbursements as
22 provided in this paragraph, and shall be paid out and
23 disbursed as herein provided and shall not at any time be
24 appropriated or diverted to any other use or purpose. Moneys
25 in the Injured Workers' Benefit Fund shall be used only for
26 payment of workers' compensation benefits for injured
HB5228 Enrolled - 24 - LRB104 20014 SPS 33465 b
1 employees when the employer has failed to provide coverage as
2 determined under this paragraph (d) and has failed to pay the
3 benefits due to the injured employee. The employer shall
4 reimburse the Injured Workers' Benefit Fund for any amounts
5 paid to an employee on account of the compensation awarded by
6 the Commission. The Attorney General shall make reasonable
7 efforts to obtain reimbursement for the Injured Workers'
8 Benefit Fund.
9 Any such amounts obtained shall be deposited by the
10 Commission into the Injured Workers' Benefit Fund. If an
11 injured employee or his or her personal representative
12 receives payment from the Injured Workers' Benefit Fund, the
13 State of Illinois has the same rights under paragraph (b) of
14 Section 5 that the employer who failed to pay the benefits due
15 to the injured employee would have had if the employer had paid
16 those benefits, and any moneys recovered by the State as a
17 result of the State's exercise of its rights under paragraph
18 (b) of Section 5 shall be deposited into the Injured Workers'
19 Benefit Fund. The custodian of the Injured Workers' Benefit
20 Fund shall be joined with the employer as a party respondent in
21 the application for adjustment of claim. After July 1, 2006,
22 the Commission shall make disbursements from the Fund once
23 each year to each eligible claimant. An eligible claimant is
24 an injured worker who has within the previous fiscal year
25 obtained a final award for benefits from the Commission
26 against the employer and the Injured Workers' Benefit Fund and
HB5228 Enrolled - 25 - LRB104 20014 SPS 33465 b
1 has notified the Commission within 90 days of receipt of such
2 award. Within a reasonable time after the end of each fiscal
3 year, the Commission shall make a disbursement to each
4 eligible claimant. At the time of disbursement, if there are
5 insufficient moneys in the Fund to pay all claims, each
6 eligible claimant shall receive a pro-rata share, as
7 determined by the Commission, of the available moneys in the
8 Fund for that year. Payment from the Injured Workers' Benefit
9 Fund to an eligible claimant pursuant to this provision shall
10 discharge the obligations of the Injured Workers' Benefit Fund
11 regarding the award entered by the Commission.
12 (e) This Act shall not affect or disturb the continuance
13 of any existing insurance, mutual aid, benefit, or relief
14 association or department, whether maintained in whole or in
15 part by the employer or whether maintained by the employees,
16 the payment of benefits of such association or department
17 being guaranteed by the employer or by some person, firm or
18 corporation for him or her: Provided, the employer contributes
19 to such association or department an amount not less than the
20 full compensation herein provided, exclusive of the cost of
21 the maintenance of such association or department and without
22 any expense to the employee. This Act shall not prevent the
23 organization and maintaining under the insurance laws of this
24 State of any benefit or insurance company for the purpose of
25 insuring against the compensation provided for in this Act,
26 the expense of which is maintained by the employer. This Act
HB5228 Enrolled - 26 - LRB104 20014 SPS 33465 b
1 shall not prevent the organization or maintaining under the
2 insurance laws of this State of any voluntary mutual aid,
3 benefit or relief association among employees for the payment
4 of additional accident or sick benefits.
5 (f) No existing insurance, mutual aid, benefit or relief
6 association or department shall, by reason of anything herein
7 contained, be authorized to discontinue its operation without
8 first discharging its obligations to any and all persons
9 carrying insurance in the same or entitled to relief or
10 benefits therein.
11 (g) Any contract, oral, written or implied, of employment
12 providing for relief benefit, or insurance or any other device
13 whereby the employee is required to pay any premium or
14 premiums for insurance against the compensation provided for
15 in this Act shall be null and void. Any employer withholding
16 from the wages of any employee any amount for the purpose of
17 paying any such premium shall be guilty of a Class B
18 misdemeanor.
19 In the event the employer does not pay the compensation
20 for which he or she is liable, then an insurance company,
21 association or insurer which may have insured such employer
22 against such liability shall become primarily liable to pay to
23 the employee, his or her personal representative or
24 beneficiary the compensation required by the provisions of
25 this Act to be paid by such employer. The insurance carrier may
26 be made a party to the proceedings in which the employer is a
HB5228 Enrolled - 27 - LRB104 20014 SPS 33465 b
1 party and an award may be entered jointly against the employer
2 and the insurance carrier.
3 (h) It shall be unlawful for any employer, insurance
4 company or service or adjustment company to interfere with,
5 restrain or coerce an employee in any manner whatsoever in the
6 exercise of the rights or remedies granted to him or her by
7 this Act or to discriminate, attempt to discriminate, or
8 threaten to discriminate against an employee in any way
9 because of his or her exercise of the rights or remedies
10 granted to him or her by this Act.
11 It shall be unlawful for any employer, individually or
12 through any insurance company or service or adjustment
13 company, to discharge or to threaten to discharge, or to
14 refuse to rehire or recall to active service in a suitable
15 capacity an employee because of the exercise of his or her
16 rights or remedies granted to him or her by this Act.
17 (i) If an employer elects to obtain a life insurance
18 policy on his employees, he may also elect to apply such
19 benefits in satisfaction of all or a portion of the death
20 benefits payable under this Act, in which case, the employer's
21 compensation premium shall be reduced accordingly.
22 (j) Within 45 days of receipt of an initial application or
23 application to renew self-insurance privileges the
24 Self-Insurers Advisory Board shall review and submit for
25 approval by the Chairman of the Commission recommendations of
26 disposition of all initial applications to self-insure and all
HB5228 Enrolled - 28 - LRB104 20014 SPS 33465 b
1 applications to renew self-insurance privileges filed by
2 private self-insurers pursuant to the provisions of this
3 Section and Section 4a-9 of this Act. Each private
4 self-insurer shall submit with its initial and renewal
5 applications the application fee required by Section 4a-4 of
6 this Act.
7 The Chairman of the Commission shall promptly act upon all
8 initial applications and applications for renewal in full
9 accordance with the recommendations of the Board or, should
10 the Chairman disagree with any recommendation of disposition
11 of the Self-Insurer's Advisory Board, he shall within 30 days
12 of receipt of such recommendation provide to the Board in
13 writing the reasons supporting his decision. The Chairman
14 shall also promptly notify the employer of his decision within
15 15 days of receipt of the recommendation of the Board.
16 If an employer is denied a renewal of self-insurance
17 privileges pursuant to application it shall retain said
18 privilege for 120 days after receipt of a notice of
19 cancellation of the privilege from the Chairman of the
20 Commission.
21 All orders made by the Chairman under this Section shall
22 be subject to review by the courts, such review to be taken in
23 the same manner and within the same time as provided by
24 subsection (f) of Section 19 of this Act for review of awards
25 and decisions of the Commission, upon the party seeking the
26 review filing with the clerk of the court to which such review
HB5228 Enrolled - 29 - LRB104 20014 SPS 33465 b
1 is taken a bond in an amount to be fixed and approved by the
2 court to which the review is taken, conditioned upon the
3 payment of all compensation awarded against the person taking
4 such review pending a decision thereof and further conditioned
5 upon such other obligations as the court may impose. Upon the
6 review the Circuit Court shall have power to review all
7 questions of fact as well as of law.
8 (Source: P.A. 101-40, eff. 1-1-20; 102-37, eff. 7-1-21;
9 103-590, eff. 6-5-24..)
10 (Text of Section from P.A. 101-384, 102-37, and 103-590)
11 Sec. 4. (a) Any employer, including but not limited to
12 general contractors and their subcontractors, who shall come
13 within the provisions of Section 3 of this Act, and any other
14 employer who shall elect to provide and pay the compensation
15 provided for in this Act shall:
16 (1) File with the Commission annually an application
17 for approval as a self-insurer which shall include a
18 current financial statement, and annually, thereafter, an
19 application for renewal of self-insurance, which shall
20 include a current financial statement. Said application
21 and financial statement shall be signed and sworn to by
22 the president or vice president and secretary or assistant
23 secretary of the employer if it be a corporation, or by all
24 of the partners, if it be a copartnership, or by the owner
25 if it be neither a copartnership nor a corporation. All
HB5228 Enrolled - 30 - LRB104 20014 SPS 33465 b
1 initial applications and all applications for renewal of
2 self-insurance must be submitted at least 60 days prior to
3 the requested effective date of self-insurance. An
4 employer may elect to provide and pay compensation as
5 provided for in this Act as a member of a group workers'
6 compensation pool under Article V 3/4 of the Illinois
7 Insurance Code. If an employer becomes a member of a group
8 workers' compensation pool, the employer shall not be
9 relieved of any obligations imposed by this Act.
10 If the sworn application and financial statement of
11 any such employer does not satisfy the Commission of the
12 financial ability of the employer who has filed it, the
13 Commission shall require such employer to,
14 (2) Furnish security, indemnity or a bond guaranteeing
15 the payment by the employer of the compensation provided
16 for in this Act, provided that any such employer whose
17 application and financial statement shall not have
18 satisfied the commission of his or her financial ability
19 and who shall have secured his liability in part by excess
20 liability insurance shall be required to furnish to the
21 Commission security, indemnity or bond guaranteeing his or
22 her payment up to the effective limits of the excess
23 coverage, or
24 (3) Insure his entire liability to pay such
25 compensation in some insurance carrier authorized,
26 licensed, or permitted to do such insurance business in
HB5228 Enrolled - 31 - LRB104 20014 SPS 33465 b
1 this State. Every policy of an insurance carrier, insuring
2 the payment of compensation under this Act shall cover all
3 the employees and the entire compensation liability of the
4 insured: Provided, however, that any employer may insure
5 his or her compensation liability with 2 or more insurance
6 carriers or may insure a part and qualify under subsection
7 1, 2, or 4 for the remainder of his or her liability to pay
8 such compensation, subject to the following two
9 provisions:
10 Firstly, the entire compensation liability of the
11 employer to employees working at or from one location
12 shall be insured in one such insurance carrier or
13 shall be self-insured, and
14 Secondly, the employer shall submit evidence
15 satisfactorily to the Commission that his or her
16 entire liability for the compensation provided for in
17 this Act will be secured. Any provisions in any
18 policy, or in any endorsement attached thereto,
19 attempting to limit or modify in any way, the
20 liability of the insurance carriers issuing the same
21 except as otherwise provided herein shall be wholly
22 void.
23 Nothing herein contained shall apply to policies of
24 excess liability carriage secured by employers who have
25 been approved by the Commission as self-insurers, or
26 (4) Make some other provision, satisfactory to the
HB5228 Enrolled - 32 - LRB104 20014 SPS 33465 b
1 Commission, for the securing of the payment of
2 compensation provided for in this Act, and
3 (5) Upon becoming subject to this Act and thereafter
4 as often as the Commission may in writing demand, file
5 with the Commission in form prescribed by it evidence of
6 his or her compliance with the provision of this Section.
7 (a-1) Regardless of its state of domicile or its principal
8 place of business, an employer shall make payments to its
9 insurance carrier or group self-insurance fund, where
10 applicable, based upon the premium rates of the situs where
11 the work or project is located in Illinois if:
12 (A) the employer is engaged primarily in the building
13 and construction industry; and
14 (B) subdivision (a)(3) of this Section applies to the
15 employer or the employer is a member of a group
16 self-insurance plan as defined in subsection (1) of
17 Section 4a.
18 The Illinois Workers' Compensation Commission shall impose
19 a penalty upon an employer for violation of this subsection
20 (a-1) if:
21 (i) the employer is given an opportunity at a hearing
22 to present evidence of its compliance with this subsection
23 (a-1); and
24 (ii) after the hearing, the Commission finds that the
25 employer failed to make payments upon the premium rates of
26 the situs where the work or project is located in
HB5228 Enrolled - 33 - LRB104 20014 SPS 33465 b
1 Illinois.
2 The penalty shall not exceed $1,000 for each day of work
3 for which the employer failed to make payments upon the
4 premium rates of the situs where the work or project is located
5 in Illinois, but the total penalty shall not exceed $50,000
6 for each project or each contract under which the work was
7 performed.
8 Any penalty under this subsection (a-1) must be imposed
9 not later than one year after the expiration of the applicable
10 limitation period specified in subsection (d) of Section 6 of
11 this Act. Penalties imposed under this subsection (a-1) shall
12 be deposited into the Illinois Workers' Compensation
13 Commission Operations Fund, a special fund that is created in
14 the State treasury. Subject to appropriation, moneys in the
15 Fund shall be used solely for the operations of the Illinois
16 Workers' Compensation Commission and by the Department of
17 Insurance for the purposes authorized in subsection (c) of
18 Section 25.5 of this Act.
19 (a-2) Every Employee Leasing Company (ELC), as defined in
20 Section 15 of the Employee Leasing Company Act, shall at a
21 minimum provide the following information to the Commission or
22 any entity designated by the Commission regarding each
23 workers' compensation insurance policy issued to the ELC:
24 (1) Any client company of the ELC listed as an
25 additional named insured.
26 (2) Any informational schedule attached to the master
HB5228 Enrolled - 34 - LRB104 20014 SPS 33465 b
1 policy that identifies any individual client company's
2 name, FEIN, and job location.
3 (3) Any certificate of insurance coverage document
4 issued to a client company specifying its rights and
5 obligations under the master policy that establishes both
6 the identity and status of the client, as well as the dates
7 of inception and termination of coverage, if applicable.
8 (a-3) Any corporation, limited liability company, or
9 partnership engaged in activities requiring licensure by a
10 State agency, for which proof that it has insured its workers'
11 compensation liability is a requirement for licensure, that
12 fails to satisfy a requirement outlined in paragraph (1), (2),
13 (3), or (4) of subsection (a) shall be subject to civil
14 penalties under subsection (d) unless it shows by clear and
15 convincing evidence that it was not operating during the time
16 its license was active.
17 (b) The sworn application and financial statement, or
18 security, indemnity or bond, or amount of insurance, or other
19 provisions, filed, furnished, carried, or made by the
20 employer, as the case may be, shall be subject to the approval
21 of the Commission.
22 Deposits under escrow agreements shall be cash, negotiable
23 United States government bonds or negotiable general
24 obligation bonds of the State of Illinois. Such cash or bonds
25 shall be deposited in escrow with any State or National Bank or
26 Trust Company having trust authority in the State of Illinois.
HB5228 Enrolled - 35 - LRB104 20014 SPS 33465 b
1 Upon the approval of the sworn application and financial
2 statement, security, indemnity or bond or amount of insurance,
3 filed, furnished or carried, as the case may be, the
4 Commission shall send to the employer written notice of its
5 approval thereof. The certificate of compliance by the
6 employer with the provisions of subparagraphs (2) and (3) of
7 paragraph (a) of this Section shall be delivered by the
8 insurance carrier to the Illinois Workers' Compensation
9 Commission within five days after the effective date of the
10 policy so certified. The insurance so certified shall cover
11 all compensation liability occurring during the time that the
12 insurance is in effect and no further certificate need be
13 filed in case such insurance is renewed, extended or otherwise
14 continued by such carrier. The insurance so certified shall
15 not be cancelled or in the event that such insurance is not
16 renewed, extended or otherwise continued, such insurance shall
17 not be terminated until at least 10 days after receipt by the
18 Illinois Workers' Compensation Commission of notice of the
19 cancellation or termination of said insurance; provided,
20 however, that if the employer has secured insurance from
21 another insurance carrier, or has otherwise secured the
22 payment of compensation in accordance with this Section, and
23 such insurance or other security becomes effective prior to
24 the expiration of the 10 days, cancellation or termination
25 may, at the option of the insurance carrier indicated in such
26 notice, be effective as of the effective date of such other
HB5228 Enrolled - 36 - LRB104 20014 SPS 33465 b
1 insurance or security.
2 (c) Whenever the Commission shall find that any
3 corporation, company, association, aggregation of individuals,
4 reciprocal or interinsurers exchange, or other insurer
5 effecting workers' compensation insurance in this State shall
6 be insolvent, financially unsound, or unable to fully meet all
7 payments and liabilities assumed or to be assumed for
8 compensation insurance in this State, or shall practice a
9 policy of delay or unfairness toward employees in the
10 adjustment, settlement, or payment of benefits due such
11 employees, the Commission may after reasonable notice and
12 hearing order and direct that such corporation, company,
13 association, aggregation of individuals, reciprocal or
14 interinsurers exchange, or insurer, shall from and after a
15 date fixed in such order discontinue the writing of any such
16 workers' compensation insurance in this State. Subject to such
17 modification of the order as the Commission may later make on
18 review of the order, as herein provided, it shall thereupon be
19 unlawful for any such corporation, company, association,
20 aggregation of individuals, reciprocal or interinsurers
21 exchange, or insurer to effect any workers' compensation
22 insurance in this State. A copy of the order shall be served
23 upon the Director of Insurance by registered mail. Whenever
24 the Commission finds that any service or adjustment company
25 used or employed by a self-insured employer or by an insurance
26 carrier to process, adjust, investigate, compromise or
HB5228 Enrolled - 37 - LRB104 20014 SPS 33465 b
1 otherwise handle claims under this Act, has practiced or is
2 practicing a policy of delay or unfairness toward employees in
3 the adjustment, settlement or payment of benefits due such
4 employees, the Commission may after reasonable notice and
5 hearing order and direct that such service or adjustment
6 company shall from and after a date fixed in such order be
7 prohibited from processing, adjusting, investigating,
8 compromising or otherwise handling claims under this Act.
9 Whenever the Commission finds that any self-insured
10 employer has practiced or is practicing delay or unfairness
11 toward employees in the adjustment, settlement or payment of
12 benefits due such employees, the Commission may, after
13 reasonable notice and hearing, order and direct that after a
14 date fixed in the order such self-insured employer shall be
15 disqualified to operate as a self-insurer and shall be
16 required to insure his entire liability to pay compensation in
17 some insurance carrier authorized, licensed and permitted to
18 do such insurance business in this State, as provided in
19 subparagraph 3 of paragraph (a) of this Section.
20 All orders made by the Commission under this Section shall
21 be subject to review by the courts, said review to be taken in
22 the same manner and within the same time as provided by Section
23 19 of this Act for review of awards and decisions of the
24 Commission, upon the party seeking the review filing with the
25 clerk of the court to which said review is taken a bond in an
26 amount to be fixed and approved by the court to which the
HB5228 Enrolled - 38 - LRB104 20014 SPS 33465 b
1 review is taken, conditioned upon the payment of all
2 compensation awarded against the person taking said review
3 pending a decision thereof and further conditioned upon such
4 other obligations as the court may impose. Upon the review the
5 Circuit Court shall have power to review all questions of fact
6 as well as of law. The penalty hereinafter provided for in this
7 paragraph shall not attach and shall not begin to run until the
8 final determination of the order of the Commission.
9 (d) Whenever a panel of 3 Commissioners comprised of one
10 member of the employing class, one representative of a labor
11 organization recognized under the National Labor Relations Act
12 or an attorney who has represented labor organizations or has
13 represented employees in workers' compensation cases, and one
14 member not identified with either the employing class or a
15 labor organization, with due process and after a hearing,
16 determines an employer has knowingly failed to provide
17 coverage as required by paragraph (a) of this Section, the
18 failure shall be deemed an immediate serious danger to public
19 health, safety, and welfare sufficient to justify service by
20 the Commission of a work-stop order on such employer,
21 requiring the cessation of all business operations of such
22 employer at the place of employment or job site. Any law
23 enforcement agency in the State shall, at the request of the
24 Commission, render any assistance necessary to carry out the
25 provisions of this Section, including, but not limited to,
26 preventing any employee of such employer from remaining at a
HB5228 Enrolled - 39 - LRB104 20014 SPS 33465 b
1 place of employment or job site after a work-stop order has
2 taken effect. Any work-stop order shall be lifted upon proof
3 of insurance as required by this Act. Any orders under this
4 Section are appealable under Section 19(f) to the Circuit
5 Court.
6 Any individual employer, corporate officer or director of
7 a corporate employer, partner of an employer partnership, or
8 member of an employer limited liability company who knowingly
9 fails to provide coverage as required by paragraph (a) of this
10 Section is guilty of a Class 4 felony. This provision shall not
11 apply to any corporate officer or director of any
12 publicly-owned corporation. Each day's violation constitutes a
13 separate offense. The State's Attorney of the county in which
14 the violation occurred, or the Attorney General, shall bring
15 such actions in the name of the People of the State of
16 Illinois, or may, in addition to other remedies provided in
17 this Section, bring an action for an injunction to restrain
18 the violation or to enjoin the operation of any such employer.
19 Any individual employer, corporate officer or director of
20 a corporate employer, partner of an employer partnership, or
21 member of an employer limited liability company who
22 negligently fails to provide coverage as required by paragraph
23 (a) of this Section is guilty of a Class A misdemeanor. This
24 provision shall not apply to any corporate officer or director
25 of any publicly-owned corporation. Each day's violation
26 constitutes a separate offense. The State's Attorney of the
HB5228 Enrolled - 40 - LRB104 20014 SPS 33465 b
1 county in which the violation occurred, or the Attorney
2 General, shall bring such actions in the name of the People of
3 the State of Illinois.
4 The criminal penalties in this subsection (d) shall not
5 apply where there exists a good faith dispute as to the
6 existence of an employment relationship. Evidence of good
7 faith shall include, but not be limited to, compliance with
8 the definition of employee as used by the Internal Revenue
9 Service.
10 Employers who are subject to and who knowingly fail to
11 comply with this Section shall not be entitled to the benefits
12 of this Act during the period of noncompliance, but shall be
13 liable in an action under any other applicable law of this
14 State. In the action, such employer shall not avail himself or
15 herself of the defenses of assumption of risk or negligence or
16 that the injury was due to a co-employee. In the action, proof
17 of the injury shall constitute prima facie evidence of
18 negligence on the part of such employer and the burden shall be
19 on such employer to show freedom of negligence resulting in
20 the injury. The employer shall not join any other defendant in
21 any such civil action. Nothing in this amendatory Act of the
22 94th General Assembly shall affect the employee's rights under
23 subdivision (a)3 of Section 1 of this Act. Any employer or
24 carrier who makes payments under subdivision (a)3 of Section 1
25 of this Act shall have a right of reimbursement from the
26 proceeds of any recovery under this Section.
HB5228 Enrolled - 41 - LRB104 20014 SPS 33465 b
1 An employee of an uninsured employer, or the employee's
2 dependents in case death ensued, may, instead of proceeding
3 against the employer in a civil action in court, file an
4 application for adjustment of claim with the Commission in
5 accordance with the provisions of this Act and the Commission
6 shall hear and determine the application for adjustment of
7 claim in the manner in which other claims are heard and
8 determined before the Commission.
9 All proceedings under this subsection (d) shall be
10 reported on an annual basis to the Workers' Compensation
11 Advisory Board.
12 An investigator with the Department of Insurance may issue
13 a citation to any employer that is not in compliance with its
14 obligation to have workers' compensation insurance under this
15 Act. The amount of the fine shall be based on the period of
16 time the employer was in non-compliance, but shall be no less
17 than $500, and shall not exceed $2,500. An employer that has
18 been issued a citation shall pay the fine to the Department of
19 Insurance and provide to the Department of Insurance proof
20 that it obtained the required workers' compensation insurance
21 within 10 days after the citation was issued. This Section
22 does not affect any other obligations this Act imposes on
23 employers.
24 Upon a finding by the Commission, after reasonable notice
25 and hearing, of the knowing and wilful failure or refusal of an
26 employer to comply with any of the provisions of paragraph (a)
HB5228 Enrolled - 42 - LRB104 20014 SPS 33465 b
1 of this Section, the failure or refusal of an employer,
2 service or adjustment company, or an insurance carrier to
3 comply with any order of the Illinois Workers' Compensation
4 Commission pursuant to paragraph (c) of this Section
5 disqualifying him or her to operate as a self insurer and
6 requiring him or her to insure his or her liability, or the
7 knowing and willful failure of an employer to comply with a
8 citation issued by an investigator with the Department of
9 Insurance, the Commission may assess a civil penalty of up to
10 $500 per day for each day of such failure or refusal after the
11 effective date of this amendatory Act of 1989. The minimum
12 penalty under this Section shall be the sum of $10,000. Each
13 day of such failure or refusal shall constitute a separate
14 offense. The Commission may assess the civil penalty
15 personally and individually against the corporate officers and
16 directors of a corporate employer, the partners of an employer
17 partnership, and the members of an employer limited liability
18 company, after a finding of a knowing and willful refusal or
19 failure of each such named corporate officer, director,
20 partner, or member to comply with this Section. The liability
21 for the assessed penalty shall be against the named employer
22 first, and if the named employer fails or refuses to pay the
23 penalty to the Commission within 30 days after the final order
24 of the Commission, then the named corporate officers,
25 directors, partners, or members who have been found to have
26 knowingly and willfully refused or failed to comply with this
HB5228 Enrolled - 43 - LRB104 20014 SPS 33465 b
1 Section shall be liable for the unpaid penalty or any unpaid
2 portion of the penalty. Upon investigation by the Department
3 of Insurance, the Attorney General shall have the authority to
4 prosecute all proceedings to enforce the civil and
5 administrative provisions of this Section before the
6 Commission. The Commission and the Department of Insurance
7 shall promulgate procedural rules for enforcing this Section
8 relating to their respective duties prescribed herein.
9 A Commission decision imposing penalties under this
10 Section may be judicially reviewed only as described in
11 Section 19(f). After expiration of the period for seeking
12 judicial review, the Commission's final decision imposing
13 penalties may be enforced in the same manner as a judgment
14 entered by a court of competent jurisdiction. The Commission's
15 final decision imposing penalties is a debt due and owing to
16 the State and can be enforced to the same extent as a judgment
17 entered by a circuit court. The Attorney General shall
18 represent the Commission and the Department of Insurance in
19 any action challenging the final decision in circuit court. If
20 the court affirms the Commission's decision, the court shall
21 enter judgment against the employer in the amount of the fines
22 assessed by the Commission. The Attorney General shall make
23 reasonable efforts to collect the amounts due under the
24 Commission's decision.
25 Any individual employer, corporate officer or director of
26 a corporate employer, partner of an employer partnership, or
HB5228 Enrolled - 44 - LRB104 20014 SPS 33465 b
1 member of an employer limited liability company who, with the
2 intent to avoid payment of compensation under this Act to an
3 injured employee or the employee's dependents, knowingly
4 transfers, sells, encumbers, assigns, or in any manner
5 disposes of, conceals, secretes, or destroys any property
6 belonging to the employer, officer, director, partner, or
7 member is guilty of a Class 4 felony.
8 Penalties and fines collected pursuant to this paragraph
9 (d) shall be deposited upon receipt into a special fund which
10 shall be designated the Injured Workers' Benefit Fund, of
11 which the State Treasurer is ex-officio custodian, such
12 special fund to be held and disbursed in accordance with this
13 paragraph (d) for the purposes hereinafter stated in this
14 paragraph (d), upon the final order of the Commission. The
15 Injured Workers' Benefit Fund shall be deposited the same as
16 are State funds and any interest accruing thereon shall be
17 added thereto every 6 months. The Injured Workers' Benefit
18 Fund is subject to audit the same as State funds and accounts
19 and is protected by the general bond given by the State
20 Treasurer. The Injured Workers' Benefit Fund is considered
21 always appropriated for the purposes of disbursements as
22 provided in this paragraph, and shall be paid out and
23 disbursed as herein provided and shall not at any time be
24 appropriated or diverted to any other use or purpose. Moneys
25 in the Injured Workers' Benefit Fund shall be used only for
26 payment of workers' compensation benefits for injured
HB5228 Enrolled - 45 - LRB104 20014 SPS 33465 b
1 employees when the employer has failed to provide coverage as
2 determined under this paragraph (d) and has failed to pay the
3 benefits due to the injured employee. The employer shall
4 reimburse the Injured Workers' Benefit Fund for any amounts
5 paid to an employee on account of the compensation awarded by
6 the Commission. The Attorney General shall make reasonable
7 efforts to obtain reimbursement for the Injured Workers'
8 Benefit Fund.
9 Any such amounts obtained shall be deposited by the
10 Commission into the Injured Workers' Benefit Fund. If an
11 injured employee or his or her personal representative
12 receives payment from the Injured Workers' Benefit Fund, the
13 State of Illinois has the same rights under paragraph (b) of
14 Section 5 that the employer who failed to pay the benefits due
15 to the injured employee would have had if the employer had paid
16 those benefits, and any moneys recovered by the State as a
17 result of the State's exercise of its rights under paragraph
18 (b) of Section 5 shall be deposited into the Injured Workers'
19 Benefit Fund. The custodian of the Injured Workers' Benefit
20 Fund shall be joined with the employer as a party respondent in
21 the application for adjustment of claim. After July 1, 2006,
22 the Commission shall make disbursements from the Fund once
23 each year to each eligible claimant. An eligible claimant is
24 an injured worker who has within the previous fiscal year
25 obtained a final award for benefits from the Commission
26 against the employer and the Injured Workers' Benefit Fund and
HB5228 Enrolled - 46 - LRB104 20014 SPS 33465 b
1 has notified the Commission within 90 days of receipt of such
2 award. Within a reasonable time after the end of each fiscal
3 year, the Commission shall make a disbursement to each
4 eligible claimant. At the time of disbursement, if there are
5 insufficient moneys in the Fund to pay all claims, each
6 eligible claimant shall receive a pro-rata share, as
7 determined by the Commission, of the available moneys in the
8 Fund for that year. Payment from the Injured Workers' Benefit
9 Fund to an eligible claimant pursuant to this provision shall
10 discharge the obligations of the Injured Workers' Benefit Fund
11 regarding the award entered by the Commission.
12 (e) This Act shall not affect or disturb the continuance
13 of any existing insurance, mutual aid, benefit, or relief
14 association or department, whether maintained in whole or in
15 part by the employer or whether maintained by the employees,
16 the payment of benefits of such association or department
17 being guaranteed by the employer or by some person, firm or
18 corporation for him or her: Provided, the employer contributes
19 to such association or department an amount not less than the
20 full compensation herein provided, exclusive of the cost of
21 the maintenance of such association or department and without
22 any expense to the employee. This Act shall not prevent the
23 organization and maintaining under the insurance laws of this
24 State of any benefit or insurance company for the purpose of
25 insuring against the compensation provided for in this Act,
26 the expense of which is maintained by the employer. This Act
HB5228 Enrolled - 47 - LRB104 20014 SPS 33465 b
1 shall not prevent the organization or maintaining under the
2 insurance laws of this State of any voluntary mutual aid,
3 benefit or relief association among employees for the payment
4 of additional accident or sick benefits.
5 (f) No existing insurance, mutual aid, benefit or relief
6 association or department shall, by reason of anything herein
7 contained, be authorized to discontinue its operation without
8 first discharging its obligations to any and all persons
9 carrying insurance in the same or entitled to relief or
10 benefits therein.
11 (g) Any contract, oral, written or implied, of employment
12 providing for relief benefit, or insurance or any other device
13 whereby the employee is required to pay any premium or
14 premiums for insurance against the compensation provided for
15 in this Act shall be null and void. Any employer withholding
16 from the wages of any employee any amount for the purpose of
17 paying any such premium shall be guilty of a Class B
18 misdemeanor.
19 In the event the employer does not pay the compensation
20 for which he or she is liable, then an insurance company,
21 association or insurer which may have insured such employer
22 against such liability shall become primarily liable to pay to
23 the employee, his or her personal representative or
24 beneficiary the compensation required by the provisions of
25 this Act to be paid by such employer. The insurance carrier may
26 be made a party to the proceedings in which the employer is a
HB5228 Enrolled - 48 - LRB104 20014 SPS 33465 b
1 party and an award may be entered jointly against the employer
2 and the insurance carrier.
3 (h) It shall be unlawful for any employer, insurance
4 company or service or adjustment company to interfere with,
5 restrain or coerce an employee in any manner whatsoever in the
6 exercise of the rights or remedies granted to him or her by
7 this Act or to discriminate, attempt to discriminate, or
8 threaten to discriminate against an employee in any way
9 because of his or her exercise of the rights or remedies
10 granted to him or her by this Act.
11 It shall be unlawful for any employer, individually or
12 through any insurance company or service or adjustment
13 company, to discharge or to threaten to discharge, or to
14 refuse to rehire or recall to active service in a suitable
15 capacity an employee because of the exercise of his or her
16 rights or remedies granted to him or her by this Act.
17 (i) If an employer elects to obtain a life insurance
18 policy on his employees, he may also elect to apply such
19 benefits in satisfaction of all or a portion of the death
20 benefits payable under this Act, in which case, the employer's
21 compensation premium shall be reduced accordingly.
22 (j) Within 45 days of receipt of an initial application or
23 application to renew self-insurance privileges the
24 Self-Insurers Advisory Board shall review and submit for
25 approval by the Chairman of the Commission recommendations of
26 disposition of all initial applications to self-insure and all
HB5228 Enrolled - 49 - LRB104 20014 SPS 33465 b
1 applications to renew self-insurance privileges filed by
2 private self-insurers pursuant to the provisions of this
3 Section and Section 4a-9 of this Act. Each private
4 self-insurer shall submit with its initial and renewal
5 applications the application fee required by Section 4a-4 of
6 this Act.
7 The Chairman of the Commission shall promptly act upon all
8 initial applications and applications for renewal in full
9 accordance with the recommendations of the Board or, should
10 the Chairman disagree with any recommendation of disposition
11 of the Self-Insurer's Advisory Board, he shall within 30 days
12 of receipt of such recommendation provide to the Board in
13 writing the reasons supporting his decision. The Chairman
14 shall also promptly notify the employer of his decision within
15 15 days of receipt of the recommendation of the Board.
16 If an employer is denied a renewal of self-insurance
17 privileges pursuant to application it shall retain said
18 privilege for 120 days after receipt of a notice of
19 cancellation of the privilege from the Chairman of the
20 Commission.
21 All orders made by the Chairman under this Section shall
22 be subject to review by the courts, such review to be taken in
23 the same manner and within the same time as provided by
24 subsection (f) of Section 19 of this Act for review of awards
25 and decisions of the Commission, upon the party seeking the
26 review filing with the clerk of the court to which such review
HB5228 Enrolled - 50 - LRB104 20014 SPS 33465 b
1 is taken a bond in an amount to be fixed and approved by the
2 court to which the review is taken, conditioned upon the
3 payment of all compensation awarded against the person taking
4 such review pending a decision thereof and further conditioned
5 upon such other obligations as the court may impose. Upon the
6 review the Circuit Court shall have power to review all
7 questions of fact as well as of law.
8 (Source: P.A. 101-384, eff. 1-1-20; 102-37, eff. 7-1-21;
9 103-590, eff. 6-5-24.)
10 (820 ILCS 305/7)
11 Sec. 7. The amount of compensation which shall be paid for
12 an accidental injury to the employee resulting in death is:
13 (a) If the employee leaves surviving a widow, widower,
14 child or children, the applicable weekly compensation rate
15 computed in accordance with subparagraph 2 of paragraph (b) of
16 Section 8, shall be payable during the life of the widow or
17 widower and if any surviving child or children shall not be
18 physically or mentally incapacitated then until the death of
19 the widow or widower or until the youngest child shall reach
20 the age of 18, whichever shall come later; provided that if
21 such child or children shall be enrolled as a full-time
22 student in any accredited educational institution, the
23 payments shall continue until such child has attained the age
24 of 25. In the event any surviving child or children shall be
25 physically or mentally incapacitated, the payments shall
HB5228 Enrolled - 51 - LRB104 20014 SPS 33465 b
1 continue for the duration of such incapacity.
2 The term "child" means a child whom the deceased employee
3 left surviving, including a posthumous child, a child legally
4 adopted, a child whom the deceased employee was legally
5 obligated to support or a child to whom the deceased employee
6 stood in loco parentis. The term "children" means the plural
7 of "child".
8 The term "physically or mentally incapacitated child or
9 children" means a child or children incapable of engaging in
10 regular and substantial gainful employment.
11 In the event of the remarriage of a widow or widower, where
12 the decedent did not leave surviving any child or children
13 who, at the time of such remarriage, are entitled to
14 compensation benefits under this Act, the surviving spouse
15 shall be paid a lump sum equal to 2 years compensation benefits
16 and all further rights of such widow or widower shall be
17 extinguished.
18 If the employee leaves surviving any child or children
19 under 18 years of age who at the time of death shall be
20 entitled to compensation under this paragraph (a) of this
21 Section, the weekly compensation payments herein provided for
22 such child or children shall in any event continue for a period
23 of not less than 6 years.
24 Any beneficiary entitled to compensation under this
25 paragraph (a) of this Section shall receive from the special
26 fund provided in paragraph (f) of this Section, in addition to
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1 the compensation herein provided, supplemental benefits in
2 accordance with paragraph (g) of Section 8.
3 (b) If no compensation is payable under paragraph (a) of
4 this Section and the employee leaves surviving a parent or
5 parents who at the time of the accident were totally dependent
6 upon the earnings of the employee then weekly payments equal
7 to the compensation rate payable in the case where the
8 employee leaves surviving a widow or widower, shall be paid to
9 such parent or parents for the duration of their lives, and in
10 the event of the death of either, for the life of the survivor.
11 (c) If no compensation is payable under paragraph (a) or
12 (b) of this Section and the employee leaves surviving any
13 child or children who are not entitled to compensation under
14 the foregoing paragraph (a) but who at the time of the accident
15 were nevertheless in any manner dependent upon the earnings of
16 the employee, or leaves surviving a parent or parents who at
17 the time of the accident were partially dependent upon the
18 earnings of the employee, then there shall be paid to such
19 dependent or dependents for a period of 8 years weekly
20 compensation payments at such proportion of the applicable
21 rate if the employee had left surviving a widow or widower as
22 such dependency bears to total dependency. In the event of the
23 death of any such beneficiary the share of such beneficiary
24 shall be divided equally among the surviving beneficiaries and
25 in the event of the death of the last such beneficiary all the
26 rights under this paragraph shall be extinguished.
HB5228 Enrolled - 53 - LRB104 20014 SPS 33465 b
1 (d) If no compensation is payable under paragraph (a),
2 (b), or (c) of this Section and the employee leaves surviving
3 any grandparent, grandparents, grandchild or grandchildren or
4 collateral heirs dependent upon the employee's earnings to the
5 extent of 50% or more of total dependency, then there shall be
6 paid to such dependent or dependents for a period of 5 years
7 weekly compensation payments at such proportion of the
8 applicable rate if the employee had left surviving a widow or
9 widower as such dependency bears to total dependency. In the
10 event of the death of any such beneficiary the share of such
11 beneficiary shall be divided equally among the surviving
12 beneficiaries and in the event of the death of the last such
13 beneficiary all rights hereunder shall be extinguished.
14 (e) The compensation to be paid for accidental injury
15 which results in death, as provided in this Section, shall be
16 paid to the persons who form the basis for determining the
17 amount of compensation to be paid by the employer, the
18 respective shares to be in the proportion of their respective
19 dependency at the time of the accident on the earnings of the
20 deceased. The Commission or an Arbitrator thereof may, in its
21 or his discretion, order or award the payment to the parent or
22 grandparent of a child for the latter's support the amount of
23 compensation which but for such order or award would have been
24 paid to such child as its share of the compensation payable,
25 which order or award may be modified from time to time by the
26 Commission in its discretion with respect to the person to
HB5228 Enrolled - 54 - LRB104 20014 SPS 33465 b
1 whom shall be paid the amount of the order or award remaining
2 unpaid at the time of the modification.
3 The payments of compensation by the employer in accordance
4 with the order or award of the Commission discharges such
5 employer from all further obligation as to such compensation.
6 (f) The sum of $10,000 $8,000 for burial expenses shall be
7 paid by the employer to the widow or widower, other dependent,
8 next of kin or to the person or persons incurring the expense
9 of burial.
10 In the event the employer failed to provide necessary
11 first aid, medical, surgical or hospital service, he shall pay
12 the cost thereof to the person or persons entitled to
13 compensation under paragraphs (a), (b), (c), or (d) of this
14 Section, or to the person or persons incurring the obligation
15 therefore, or providing the same.
16 On January 15 and July 15, 1981, and on January 15 and July
17 15 of each year thereafter the employer shall within 60 days
18 pay a sum equal to 1/8 of 1% of all compensation payments made
19 by him after July 1, 1980, either under this Act or the
20 Workers' Occupational Diseases Act, whether by lump sum
21 settlement or weekly compensation payments, but not including
22 hospital, surgical or rehabilitation payments, made during the
23 first 6 months and during the second 6 months respectively of
24 the fiscal year next preceding the date of the payments, into a
25 special fund which shall be designated the "Second Injury
26 Fund", of which the State Treasurer is ex officio custodian,
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1 such special fund to be held and disbursed for the purposes
2 hereinafter stated in paragraphs (f) and (g) of Section 8,
3 either upon the order of the Commission or of a competent
4 court. Said special fund shall be deposited the same as are
5 State funds and any interest accruing thereon shall be added
6 thereto every 6 months. It is subject to audit the same as
7 State funds and accounts and is protected by the General bond
8 given by the State Treasurer. It is considered always
9 appropriated for the purposes of disbursements as provided in
10 paragraph (f) of Section 8 of this Act, and shall be paid out
11 and disbursed as therein provided and shall not at any time be
12 appropriated or diverted to any other use or purpose.
13 On January 15, 1991, the employer shall further pay a sum
14 equal to one half of 1% of all compensation payments made by
15 him from January 1, 1990 through June 30, 1990 either under
16 this Act or under the Workers' Occupational Diseases Act,
17 whether by lump sum settlement or weekly compensation
18 payments, but not including hospital, surgical or
19 rehabilitation payments, into an additional Special Fund which
20 shall be designated as the "Rate Adjustment Fund". On March
21 15, 1991, the employer shall pay into the Rate Adjustment Fund
22 a sum equal to one half of 1% of all such compensation payments
23 made from July 1, 1990 through December 31, 1990. Within 60
24 days after July 15, 1991, the employer shall pay into the Rate
25 Adjustment Fund a sum equal to one half of 1% of all such
26 compensation payments made from January 1, 1991 through June
HB5228 Enrolled - 56 - LRB104 20014 SPS 33465 b
1 30, 1991. Within 60 days after January 15 of 1992 and each
2 subsequent year through 1996, the employer shall pay into the
3 Rate Adjustment Fund a sum equal to one half of 1% of all such
4 compensation payments made in the last 6 months of the
5 preceding calendar year. Within 60 days after July 15 of 1992
6 and each subsequent year through 1995, the employer shall pay
7 into the Rate Adjustment Fund a sum equal to one half of 1% of
8 all such compensation payments made in the first 6 months of
9 the same calendar year. Within 60 days after January 15 of 1997
10 and each subsequent year through 2005, the employer shall pay
11 into the Rate Adjustment Fund a sum equal to three-fourths of
12 1% of all such compensation payments made in the last 6 months
13 of the preceding calendar year. Within 60 days after July 15 of
14 1996 and each subsequent year through 2004, the employer shall
15 pay into the Rate Adjustment Fund a sum equal to three-fourths
16 of 1% of all such compensation payments made in the first 6
17 months of the same calendar year. Within 60 days after July 15
18 of 2005, the employer shall pay into the Rate Adjustment Fund a
19 sum equal to 1% of such compensation payments made in the first
20 6 months of the same calendar year. Within 60 days after
21 January 15 of 2006 and each subsequent year through 2024, the
22 employer shall pay into the Rate Adjustment Fund a sum equal to
23 1.25% of such compensation payments made in the last 6 months
24 of the preceding calendar year. Within 60 days after July 15 of
25 2006 and each subsequent year through 2023, the employer shall
26 pay into the Rate Adjustment Fund a sum equal to 1.25% of such
HB5228 Enrolled - 57 - LRB104 20014 SPS 33465 b
1 compensation payments made in the first 6 months of the same
2 calendar year. Within 60 days after July 15 of 2024 and each
3 subsequent year thereafter, the employer shall pay into the
4 Rate Adjustment Fund a sum equal to 1.375% of such
5 compensation payments made in the first 6 months of the same
6 calendar year. Within 60 days after January 15 of 2025 and each
7 subsequent year thereafter, the employer shall pay into the
8 Rate Adjustment Fund a sum equal to 1.375% of such
9 compensation payments made in the last 6 months of the
10 preceding calendar year. The administrative costs of
11 collecting assessments from employers for the Rate Adjustment
12 Fund shall be paid from the Rate Adjustment Fund. The cost of
13 an actuarial audit of the Fund shall be paid from the Rate
14 Adjustment Fund. The State Treasurer is ex officio custodian
15 of such Special Fund and the same shall be held and disbursed
16 for the purposes hereinafter stated in paragraphs (f) and (g)
17 of Section 8 upon the order of the Commission or of a competent
18 court. The Rate Adjustment Fund shall be deposited the same as
19 are State funds and any interest accruing thereon shall be
20 added thereto every 6 months. It shall be subject to audit the
21 same as State funds and accounts and shall be protected by the
22 general bond given by the State Treasurer. It is considered
23 always appropriated for the purposes of disbursements as
24 provided in paragraphs (f) and (g) of Section 8 of this Act and
25 shall be paid out and disbursed as therein provided and shall
26 not at any time be appropriated or diverted to any other use or
HB5228 Enrolled - 58 - LRB104 20014 SPS 33465 b
1 purpose. Within 5 days after December 7, 1990 (the effective
2 date of Public Act 86-1448), the Comptroller and the State
3 Treasurer shall transfer $1,000,000 from the General Revenue
4 Fund to the Rate Adjustment Fund. By February 15, 1991, the
5 Comptroller and the State Treasurer shall transfer $1,000,000
6 from the Rate Adjustment Fund to the General Revenue Fund. The
7 Comptroller and Treasurer are authorized to make transfers at
8 the request of the Chairman up to a total of $19,000,000 from
9 the Second Injury Fund, the General Revenue Fund, and the
10 Workers' Compensation Benefit Trust Fund to the Rate
11 Adjustment Fund to the extent that there is insufficient money
12 in the Rate Adjustment Fund to pay claims and obligations.
13 Amounts may be transferred from the General Revenue Fund only
14 if the funds in the Second Injury Fund or the Workers'
15 Compensation Benefit Trust Fund are insufficient to pay claims
16 and obligations of the Rate Adjustment Fund. All amounts
17 transferred from the Second Injury Fund, the General Revenue
18 Fund, and the Workers' Compensation Benefit Trust Fund shall
19 be repaid from the Rate Adjustment Fund within 270 days of a
20 transfer, together with interest at the rate earned by moneys
21 on deposit in the Fund or Funds from which the moneys were
22 transferred.
23 Upon a finding by the Commission, after reasonable notice
24 and hearing, that any employer has willfully and knowingly
25 failed to pay the proper amounts into the Second Injury Fund or
26 the Rate Adjustment Fund required by this Section or if such
HB5228 Enrolled - 59 - LRB104 20014 SPS 33465 b
1 payments are not made within the time periods prescribed by
2 this Section, the employer shall, in addition to such
3 payments, pay a penalty of 20% of the amount required to be
4 paid or $2,500, whichever is greater, for each year or part
5 thereof of such failure to pay. This penalty shall only apply
6 to obligations of an employer to the Second Injury Fund or the
7 Rate Adjustment Fund accruing after December 18, 1989 (the
8 effective date of Public Act 86-998). All or part of such a
9 penalty may be waived by the Commission for good cause shown.
10 Any obligations of an employer to the Second Injury Fund
11 and Rate Adjustment Fund accruing prior to December 18, 1989
12 (the effective date of Public Act 86-998) shall be paid in full
13 by such employer within 5 years of December 18, 1989 (the
14 effective date of Public Act 86-998), with at least one-fifth
15 of such obligation to be paid during each year following
16 December 18, 1989 (the effective date of Public Act 86-998).
17 If the Commission finds, following reasonable notice and
18 hearing, that an employer has failed to make timely payment of
19 any obligation accruing under the preceding sentence, the
20 employer shall, in addition to all other payments required by
21 this Section, be liable for a penalty equal to 20% of the
22 overdue obligation or $2,500, whichever is greater, for each
23 year or part thereof that obligation is overdue. All or part of
24 such a penalty may be waived by the Commission for good cause
25 shown.
26 The Chairman of the Illinois Workers' Compensation
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1 Commission shall, annually, furnish to the Director of the
2 Department of Insurance a list of the amounts paid into the
3 Second Injury Fund and the Rate Adjustment Fund by each
4 insurance company on behalf of their insured employers. The
5 Director shall verify to the Chairman that the amounts paid by
6 each insurance company are accurate as best as the Director
7 can determine from the records available to the Director. The
8 Chairman shall verify that the amounts paid by each
9 self-insurer are accurate as best as the Chairman can
10 determine from records available to the Chairman. The Chairman
11 may require each self-insurer to provide information
12 concerning the total compensation payments made upon which
13 contributions to the Second Injury Fund and the Rate
14 Adjustment Fund are predicated and any additional information
15 establishing that such payments have been made into these
16 funds. Any deficiencies in payments noted by the Director or
17 Chairman shall be subject to the penalty provisions of this
18 Act.
19 The State Treasurer, or his duly authorized
20 representative, shall be named as a party to all proceedings
21 in all cases involving claim for the loss of, or the permanent
22 and complete loss of the use of one eye, one foot, one leg, one
23 arm or one hand.
24 The State Treasurer or his duly authorized agent shall
25 have the same rights as any other party to the proceeding,
26 including the right to petition for review of any award. The
HB5228 Enrolled - 61 - LRB104 20014 SPS 33465 b
1 reasonable expenses of litigation, such as medical
2 examinations, testimony, and transcript of evidence, incurred
3 by the State Treasurer or his duly authorized representative,
4 shall be borne by the Second Injury Fund.
5 If the award is not paid within 30 days after the date the
6 award has become final, the Commission shall proceed to take
7 judgment thereon in its own name as is provided for other
8 awards by paragraph (g) of Section 19 of this Act and take the
9 necessary steps to collect the award.
10 Any person, corporation or organization who has paid or
11 become liable for the payment of burial expenses of the
12 deceased employee may in his or its own name institute
13 proceedings before the Commission for the collection thereof.
14 For the purpose of administration, receipts and
15 disbursements, the Special Fund provided for in paragraph (f)
16 of this Section shall be administered jointly with the Special
17 Fund provided for in paragraph (f) of Section 7 of the Workers'
18 Occupational Diseases Act.
19 (g) All compensation, except for burial expenses provided
20 in this Section to be paid in case accident results in death,
21 shall be paid in installments equal to the percentage of the
22 average earnings as provided for in paragraph (b) of Section 8
23 of this Act, at the same intervals at which the wages or
24 earnings of the employees were paid. If this is not feasible,
25 then the installments shall be paid weekly. Such compensation
26 may be paid in a lump sum upon petition as provided in Section
HB5228 Enrolled - 62 - LRB104 20014 SPS 33465 b
1 9 of this Act. However, in addition to the benefits provided by
2 Section 9 of this Act where compensation for death is payable
3 to the deceased's widow, widower or to the deceased's widow,
4 widower and one or more children, and where a partial lump sum
5 is applied for by such beneficiary or beneficiaries within 18
6 months after the deceased's death, the Commission may, in its
7 discretion, grant a partial lump sum of not to exceed 100 weeks
8 of the compensation capitalized at their present value upon
9 the basis of interest calculated at 3% per annum with annual
10 rests, upon a showing that such partial lump sum is for the
11 best interest of such beneficiary or beneficiaries.
12 (h) In case the injured employee is under 16 years of age
13 at the time of the accident and is illegally employed, the
14 amount of compensation payable under paragraphs (a), (b), (c),
15 (d), and (f) of this Section shall be increased 50%.
16 Nothing herein contained repeals or amends the provisions
17 of the Child Labor Law of 2024 relating to the employment of
18 minors under the age of 16 years.
19 However, where an employer has on file an employment
20 certificate issued pursuant to the Child Labor Law of 2024 or
21 work permit issued pursuant to the Federal Fair Labor
22 Standards Act, as amended, or a birth certificate properly and
23 duly issued, such certificate, permit or birth certificate is
24 conclusive evidence as to the age of the injured minor
25 employee for the purposes of this Section only.
26 (i) Whenever the dependents of a deceased employee are
HB5228 Enrolled - 63 - LRB104 20014 SPS 33465 b
1 noncitizens not residing in the United States, Mexico or
2 Canada, the amount of compensation payable is limited to the
3 beneficiaries described in paragraphs (a), (b), and (c) of
4 this Section and is 50% of the compensation provided in
5 paragraphs (a), (b), and (c) of this Section, except as
6 otherwise provided by treaty.
7 In a case where any of the persons who would be entitled to
8 compensation is living at any place outside of the United
9 States, then payment shall be made to the personal
10 representative of the deceased employee. The distribution by
11 such personal representative to the persons entitled shall be
12 made to such persons and in such manner as the Commission
13 orders.
14 (Source: P.A. 103-590, eff. 6-5-24; 103-721, eff. 1-1-25;
15 104-417, eff. 8-15-25.)
16 (820 ILCS 305/8.7)
17 Sec. 8.7. Utilization review programs.
18 (a) As used in this Section:
19 "Utilization review" means the evaluation of proposed or
20 provided health care services to determine the appropriateness
21 of both the level of health care services medically necessary
22 and the quality of health care services provided to a patient,
23 including evaluation of their efficiency, efficacy, and
24 appropriateness of treatment, hospitalization, or office
25 visits based on medically accepted standards. The evaluation
HB5228 Enrolled - 64 - LRB104 20014 SPS 33465 b
1 must be accomplished by means of a system that identifies the
2 utilization of health care services based on standards of care
3 of nationally recognized peer review guidelines as well as
4 nationally recognized treatment guidelines and evidence-based
5 medicine based upon standards as provided in this Act.
6 Utilization techniques may include prospective review, second
7 opinions, concurrent review, discharge planning, peer review,
8 independent medical examinations, and retrospective review
9 (for purposes of this sentence, retrospective review shall be
10 applicable to services rendered on or after July 20, 2005).
11 Nothing in this Section applies to prospective review of
12 necessary first aid or emergency treatment.
13 (b) No person may conduct a utilization review program for
14 workers' compensation services in this State unless once every
15 2 years the person registers the utilization review program
16 with the Department of Insurance and certifies compliance with
17 the Workers' Compensation Utilization Management standards or
18 Health Utilization Management Standards of URAC sufficient to
19 achieve URAC accreditation or submits evidence of
20 accreditation by URAC for its Workers' Compensation
21 Utilization Management Standards or Health Utilization
22 Management Standards. Nothing in this Act shall be construed
23 to require an employer or insurer or its subcontractors to
24 become URAC accredited.
25 (c) In addition, the Director of Insurance may certify
26 alternative utilization review standards of national
HB5228 Enrolled - 65 - LRB104 20014 SPS 33465 b
1 accreditation organizations or entities in order for plans to
2 comply with this Section. Any alternative utilization review
3 standards shall meet or exceed those standards required under
4 subsection (b).
5 (d) This registration shall include submission of all of
6 the following information regarding utilization review program
7 activities:
8 (1) The name, address, and telephone number of the
9 utilization review programs.
10 (2) The organization and governing structure of the
11 utilization review programs.
12 (3) The number of lives for which utilization review
13 is conducted by each utilization review program.
14 (4) Hours of operation of each utilization review
15 program.
16 (5) Description of the grievance process for each
17 utilization review program.
18 (6) Number of covered lives for which utilization
19 review was conducted for the previous calendar year for
20 each utilization review program.
21 (7) Written policies and procedures for protecting
22 confidential information according to applicable State and
23 federal laws for each utilization review program.
24 (e) A utilization review program shall have written
25 procedures to ensure that patient-specific information
26 obtained during the process of utilization review will be:
HB5228 Enrolled - 66 - LRB104 20014 SPS 33465 b
1 (1) kept confidential in accordance with applicable
2 State and federal laws; and
3 (2) shared only with the employee, the employee's
4 designee, and the employee's health care provider, and
5 those who are authorized by law to receive the
6 information. Summary data shall not be considered
7 confidential if it does not provide information to allow
8 identification of individual patients or health care
9 providers.
10 Only a health care professional may make determinations
11 regarding the medical necessity of health care services during
12 the course of utilization review. Any adverse determination
13 shall be made by a physician if the health care services are to
14 be delivered or recommended by a physician. The reviewing
15 physician shall have:
16 (1) a current and valid nonrestricted license in any
17 United States jurisdiction and a current certification by
18 a recognized American medical specialty board in the area
19 or areas appropriate to the subject of the review; and
20 (2) experience treating and managing patients with the
21 medical condition or disease for which the health care
22 service is being requested.
23 Notwithstanding the provisions of this subsection, a
24 licensed health care professional who satisfies the
25 requirements of this subsection may make an adverse
26 determination of a service request submitted by a health care
HB5228 Enrolled - 67 - LRB104 20014 SPS 33465 b
1 professional licensed in the same profession.
2 When making retrospective reviews, utilization review
3 programs shall base reviews solely on the medical information
4 available to the attending physician or ordering provider at
5 the time the health care services were provided.
6 (f) If the Department of Insurance finds that a
7 utilization review program is not in compliance with this
8 Section, the Department shall issue a corrective action plan
9 and allow a reasonable amount of time for compliance with the
10 plan. If the utilization review program does not come into
11 compliance, the Department may issue a cease and desist order.
12 Before issuing a cease and desist order under this Section,
13 the Department shall provide the utilization review program
14 with a written notice of the reasons for the order and allow a
15 reasonable amount of time to supply additional information
16 demonstrating compliance with the requirements of this Section
17 and to request a hearing. The hearing notice shall be sent by
18 certified mail, return receipt requested, and the hearing
19 shall be conducted in accordance with the Illinois
20 Administrative Procedure Act.
21 (g) A utilization review program subject to a corrective
22 action may continue to conduct business until a final decision
23 has been issued by the Department.
24 (h) The Department of Insurance may by rule establish a
25 registration fee for each person conducting a utilization
26 review program.
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1 (i) Upon receipt of written notice that the employer or
2 the employer's agent or insurer wishes to invoke the
3 utilization review process, the provider of medical, surgical,
4 or hospital services shall submit to the utilization review,
5 following accredited procedural guidelines.
6 (1) The provider shall make reasonable efforts to
7 provide timely and complete reports of clinical
8 information needed to support a request for treatment. If
9 the provider fails to make such reasonable efforts, the
10 charges for the treatment or service may not be
11 compensable nor collectible by the provider or claimant
12 from the employer, the employer's agent, or the employee.
13 The reporting obligations of providers shall not be
14 unreasonable or unduly burdensome.
15 (2) Written notice of utilization review decisions,
16 including the clinical rationale for certification or
17 non-certification and references to applicable standards
18 of care or evidence-based medical guidelines, shall be
19 furnished to the provider and employee. The certification
20 shall be valid for the 3 months immediately after the date
21 on which the employee and health care provider receive the
22 certification or for the length of treatment as determined
23 by the employee's health care provider. If the
24 certification is for a proposed surgery, it shall be
25 inclusive of 3 months of postoperative health care
26 services as clinically indicated by the treating health
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1 care professional or for the length of treatment as
2 determined by the petitioner's treating health care
3 professional, completed by a licensed health care
4 professional.
5 (2-5) A non-certification may be appealed. All appeals
6 shall be reviewed by a physician if the health care
7 services are to be delivered or recommended by a
8 physician. The reviewing physician shall have:
9 (A) a current and valid nonrestricted license in
10 any United States jurisdiction and a current
11 certification by a recognized American medical
12 specialty board and, where applicable, subspecialty
13 board in the area or areas appropriate to the subject
14 of the review; and
15 (B) experience treating and managing patients with
16 the medical condition or disease for which the health
17 care service is being requested.
18 Notwithstanding the provisions of this paragraph, a
19 licensed health care professional who satisfies the
20 requirements of this subsection may make an adverse
21 determination of a service request submitted by a health
22 care professional licensed in the same profession.
23 (3) An employer may only deny payment of or refuse to
24 authorize payment of medical services rendered or proposed
25 to be rendered on the grounds that the extent and scope of
26 medical treatment is excessive and unnecessary in
HB5228 Enrolled - 70 - LRB104 20014 SPS 33465 b
1 compliance with an accredited utilization review program
2 under this Section.
3 (4) When a payment for medical services has been
4 denied or not authorized by an employer or when
5 authorization for medical services is denied pursuant to
6 utilization review, the employee has the burden of proof
7 to show by a preponderance of the evidence that a variance
8 from the standards of care used by the person or entity
9 performing the utilization review pursuant to subsection
10 (a) is reasonably required to cure or relieve the effects
11 of his or her injury.
12 (5) The medical professional responsible for review in
13 the final stage of utilization review or appeal must be
14 available in this State for interview or deposition; or
15 must be available for deposition by telephone, video
16 conference, or other remote electronic means. A medical
17 professional who works or resides in this State or outside
18 of this State may comply with this requirement by making
19 himself or herself available for an interview or
20 deposition in person or by making himself or herself
21 available by telephone, video conference, or other remote
22 electronic means. The remote interview or deposition shall
23 be conducted in a fair, open, and cost-effective manner.
24 The expense of interview and the deposition method shall
25 be paid by the employer. The deponent shall be in the
26 presence of the officer administering the oath and
HB5228 Enrolled - 71 - LRB104 20014 SPS 33465 b
1 recording the deposition, unless otherwise agreed by the
2 parties. Any exhibits or other demonstrative evidence to
3 be presented to the deponent by any party at the
4 deposition shall be provided to the officer administering
5 the oath and all other parties within a reasonable period
6 of time prior to the deposition. Nothing shall prohibit
7 any party from being with the deponent during the
8 deposition, at that party's expense; provided, however,
9 that a party attending a deposition shall give written
10 notice of that party's intention to appear at the
11 deposition to all other parties within a reasonable time
12 prior to the deposition.
13 An admissible utilization review shall be considered by
14 the Commission, along with all other evidence and in the same
15 manner as all other evidence, and must be addressed along with
16 all other evidence in the determination of the reasonableness
17 and necessity of the medical bills or treatment. Nothing in
18 this Section shall be construed to diminish the rights of
19 employees to reasonable and necessary medical treatment or
20 employee choice of health care provider under Section 8(a) or
21 the rights of employers to medical examinations under Section
22 12.
23 (j) When an employer denies payment of or refuses to
24 authorize payment of first aid, medical, surgical, or hospital
25 services under Section 8(a) of this Act, if that denial or
26 refusal to authorize complies with a utilization review
HB5228 Enrolled - 72 - LRB104 20014 SPS 33465 b
1 program registered under this Section and complies with all
2 other requirements of this Section, then there shall be a
3 rebuttable presumption that the employer shall not be
4 responsible for payment of additional compensation pursuant to
5 Section 19(k) of this Act and if that denial or refusal to
6 authorize does not comply with a utilization review program
7 registered under this Section and does not comply with all
8 other requirements of this Section, then that will be
9 considered by the Commission, along with all other evidence
10 and in the same manner as all other evidence, in the
11 determination of whether the employer may be responsible for
12 the payment of additional compensation pursuant to Section
13 19(k) of this Act.
14 The changes to this Section made by this amendatory Act of
15 the 97th General Assembly apply only to health care services
16 provided or proposed to be provided on or after September 1,
17 2011.
18 (Source: P.A. 97-18, eff. 6-28-11.)
19 (820 ILCS 305/12) (from Ch. 48, par. 138.12)
20 Sec. 12. An employee entitled to receive disability
21 payments shall be required, if requested by the employer, to
22 submit himself, at the expense of the employer, for
23 examination to a duly qualified medical practitioner or
24 surgeon selected by the employer, at any time and place
25 reasonably convenient for the employee, either within or
HB5228 Enrolled - 73 - LRB104 20014 SPS 33465 b
1 without the State of Illinois, for the purpose of determining
2 the nature, extent and probable duration of the injury
3 received by the employee, and for the purpose of ascertaining
4 the amount of compensation which may be due the employee from
5 time to time for disability according to the provisions of
6 this Act. An employee may also be required to submit himself
7 for examination by medical experts under subsection (c) of
8 Section 19.
9 If an employer asks a medical practitioner for an
10 examination of the reasonableness and necessity of the medical
11 services proposed or provided under subsection (a) of Section
12 8, instead of a utilization review under Section 8.7, the
13 examination required under this Section and the report of the
14 examination shall be provided by the medical practitioner to
15 the employee or the employee's representative and the
16 employee's treating health care professional within 90 days
17 after receipt of the request for the examination of the
18 reasonableness and necessity of treatment. The 90-day period
19 begins when the employer receives the medical records from the
20 treating health care professional requesting the medical
21 service. The employer or the employer's representative shall
22 exercise due diligence in requesting and collecting the
23 employee's medical records in accordance with all applicable
24 laws. The medical practitioner who performs the examination to
25 determine the reasonableness and necessity of treatment shall
26 be board certified in the same specialty as the treating
HB5228 Enrolled - 74 - LRB104 20014 SPS 33465 b
1 health care professional. If the employer fails to comply with
2 this paragraph after receiving the medical records from the
3 treating health care professional requesting the medical
4 service, there is a rebuttable presumption that the employer
5 shall be responsible for the payment of additional
6 compensation under Section 16 and subsection (l) of Section
7 19. This paragraph applies to the failure to authorize or
8 approve treatment as well as the failure to pay for treatment.
9 An employer requesting such an examination, of an employee
10 residing within the State of Illinois, shall deliver to the
11 employee with the notice of the time and place of examination
12 sufficient money to defray the necessary expense of travel by
13 the most convenient means to and from the place of
14 examination, and the cost of meals necessary during the trip,
15 and if the examination or travel to and from the place of
16 examination causes any loss of working time on the part of the
17 employee, the employer shall reimburse him for such loss of
18 wages upon the basis of his average daily wage. Such
19 examination shall be made in the presence of a duly qualified
20 medical practitioner or surgeon provided and paid for by the
21 employee, if such employee so desires.
22 In all cases where the examination is made by a surgeon
23 engaged by the employer, and the injured employee has no
24 surgeon present at such examination, it shall be the duty of
25 the surgeon making the examination at the instance of the
26 employer to deliver to the injured employee, or his
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1 representative, a statement in writing of the condition and
2 extent of the injury to the same extent that said surgeon
3 reports to the employer and the same shall be an exact copy of
4 that furnished to the employer, said copy to be furnished the
5 employee, or his representative as soon as practicable but not
6 later than 48 hours before the time the case is set for
7 hearing. Such delivery shall be made in person either to the
8 employee or his representative, or by registered mail to
9 either, and the receipt of either shall be proof of such
10 delivery. If such surgeon refuses to furnish the employee with
11 such statement to the same extent as that furnished the
12 employer said surgeon shall not be permitted to testify at the
13 hearing next following said examination.
14 If the employee refuses so to submit himself to
15 examination or unnecessarily obstructs the same, his right to
16 compensation payments shall be temporarily suspended until
17 such examination shall have taken place, and no compensation
18 shall be payable under this Act for such period.
19 It shall be the duty of surgeons treating an injured
20 employee who is likely to die, and treating him at the instance
21 of the employer, to have called in another surgeon to be
22 designated and paid for by either the injured employee or by
23 the person or persons who would become his beneficiary or
24 beneficiaries, to make an examination before the death of such
25 injured employee.
26 In all cases where the examination is made by a surgeon
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1 engaged by the injured employee, and the employer has no
2 surgeon present at such examination, it shall be the duty of
3 the surgeon making the examination at the instance of the
4 employee, to deliver to the employer, or his representative, a
5 statement in writing of the condition and extent of the injury
6 to the same extent that said surgeon reports to the employee
7 and the same shall be an exact copy of that furnished to the
8 employee, said copy to be furnished the employer, or his
9 representative, as soon as practicable but not later than 48
10 hours before the time the case is set for hearing. Such
11 delivery shall be made in person either to the employer, or his
12 representative, or by registered mail to either, and the
13 receipt of either shall be proof of such delivery. If such
14 surgeon refuses to furnish the employer with such statement to
15 the same extent as that furnished the employee, said surgeon
16 shall not be permitted to testify at the hearing next
17 following said examination.
18 (Source: P.A. 94-277, eff. 7-20-05.)
19 Section 99. Effective date. This Act takes effect upon
20 becoming law.Every fact on this page links to its source, starting with the official bill record.