We just saw a great article from Victor Caruso of the Illinois Policy Institute outlining the group's research on failed workers' compensation defense in at least one Illinois municipality.

Eugene Keefe

Caruso found that the City of Belleville offers a shocking example of what I feel is outright corruption in workers’ comp for local governments.

Since 2013, Belleville has spent more than $2.5 million on workers’ comp settlements, according to city records of Illinois Workers’ Compensation Commission contracts. In 2018 alone, tiny Belleville, with a population of about 42,000, has so far spent $420,000 settling workers’ comp claims.

Between 2013 and 2018, Belleville’s costliest year for workers’ comp payouts was 2016, during which the city spent $662,000 in just that year on workers’ comp settlements.

Caruso’s research indicates that the claims vary widely in severity and cost. One claim settled in 2013 involving a worker “hit by a car while collecting signs” resulted in a payout of $26,100. Meanwhile, a comparatively less serious claim filed that year resulting from “lifting a heavy garbage can” earned one worker a $125,000 settlement.

Shocking settlements for claims with almost no lost time

Many cases in which workers reported sustaining only mild injuries and returned to work the next day nonetheless resulted in large workers’ comp settlements, records show. One worker who reported an injury sustained while landing awkwardly exiting a fire truck collected $39,750. Another worker who reported an injury after pulling a hose collected $24,000. Both returned to work the day after their respective incidents.

In fact, more than 35% of Belleville workers who received a workers’ comp payout between 2013 and 2018 returned to work the day after the reported accident date, amounting to nearly $360,000 in settlements.

Huh? Who is watching the taxpayers’ money?

A Belleville human resources official confirmed that payouts for workers’ comp settlements are paid directly by the city unless a settlement surpasses $250,000, in which case insurance coverage kicks in.

Caruso also notes that workers sustaining the most extreme injuries — “dealing with a combative juvenile” or “trying to remove a door at a fire” — were more likely to receive six-figure settlements. However, comparably ambiguous and modest claims — “testing heavy equipment” or “hauling hose line” — also delivered at least $100,000. Five workers who reported “repetitive trauma” received between $19,300 and $33,000.

Workers’ comp insurance as well as provisional income that injured workers receive while off the job collectively cost state and local governments $1 billion each year in Illinois, a 2017 Policy Institute report found. And local governments bear the brunt of this mandate, shouldering $727 million of that nine-figure annual bill.

Corruption has been present for decades

I am sure that our state WC defense program is a shambles. It blindly pays hundreds of millions each year to wily workers. The City of Chicago WC defense program is run by Alderman Ed Burke, who happily accepts campaign donations from WC defense lawyers, WC plaintiff lawyers and anyone else who wants to benefit via workers’ comp at the expense of Chicago taxpayers. Chicago also pays zillions in WC and other disability benefits.

The Policy Institute confirms that Illinois’ costly workers’ comp system can’t be blamed directly on individual workers. I do feel that lots of municipalities and other small governments corruptly use the WC system as a way to reward coworkers and give them time off with pay. It is easy to blame the system when you are doing nothing to defend your government from abusers and charlatans.

A 2015 report by the state's Local Government Consolidation and Unfunded Mandates Task Force found workers’ comp to be the third-most burdensome unfunded mandate for Illinois municipalities. This runs parallel to the effect that the state’s workers’ comp law has on the private sector, driving businesses across state lines toward more practical regulatory environments.

While I agree it is necessary to have a system in place through which workers are made somewhat whole for workplace accidents, Illinois’ workers’ comp law has failed to evolve with the changing landscape of modern workplace environments.

Originating after the Cherry Mine Disaster in 1909, an era in which workplace danger was commonplace, Illinois’ workers’ comp law was established to guarantee rapid medical coverage and replacement wages to workers in the event of a work-related injury. The system requires good government and solid claims-handling principles.

If your city isn’t doing so, taxes are certain to spiral.

Eugene Keefe is a founding partner of Keefe, Campbell, Biery and Associates, a Chicago-based workers' compensation defense firm. This column was reprinted, with permission, from the firm's KCBA blog.