November Edition 2008
Illinois Jobs Woes Continue
The Illinois Department of Employment Security (IDES) reported that the Illinois economy posted its fourth consecutive month of job loss in September for the first time in more than five years, according to data released by the U.S. Department of Labor, Bureau of Labor Statistics (BLS) and IDES. The seasonally adjusted September Illinois unemployment rate was 6.9 percent, down -0.4 point from August. The three-month moving average, which more clearly depicts overall trends, remained at 7.1 percent, the highest level reported since November 1993.
Illinois’ Unemployment Insurance taxes paid by employers are being outpaced by benefits paid out. For the first three quarters of 2008, just under $1.7 billion in benefits have been paid to unemployed workers approximately a quarter of a billion more than was paid out for the same period in 2007. As of the end of August, the Unemployment Insurance Trust Fund was over $2 billion. The projected fund balance for the end of 2008 is $1.7 billion.
Workers’ Compensation Out-Patient Fee Schedule Advances
The Workers’ Compensation Commission has voted to submit proposed changes to the medical fee schedule. These changes create fee schedules for the following areas: ambulatory surgical treatment centers; hospital outpatient radiology, pathology and laboratory, physical medicine and rehabilitation services; hospital outpatient surgical facility services; and rehabilitation hospitals. Due to a lack of data, the original fee schedule effective February 2006 did not include fees for these areas, and payment was set at 76% of the provider's charge. The Council has been pushing the Commission since 2006 to act to complete the medical fee schedule and eliminate as much as possible the services that are reimbursed at 76% of charge.
Earlier in the year, the Commission held two hearings where public comment was taken on the proposed changes. The Council testified at the Springfield hearing that it was supportive of the effort but was holding its final position on the changes until further analysis could be completed. During the Spring and Summer, we found the fee schedule changes had some disturbing outcomes for some of the physical medicine reimbursements, especially in the Chicago region. We brought these concerns to the attention of the Chairman of the Commission and through our representatives on the Medical Fee Advisory Board.
Unfortunately, the changes made in the rules and Instructions and Guidelines, and approved by the Commission did not address the issues we raised.
The proposed rule now goes to Second Notice at the Joint Committee on Administrative Rules (JCAR) for final review. JCAR likely will meet to discuss the rule at is meeting in November. The Council’s Workers’ Compensation Committee will meet later this month to discuss what action the Council should take regarding JCAR’s consideration of the rule.
Copy of the rule changes approved by the Commission.
Copy of the proposed changes to the Instructions & Guidelines approved by the Commission.
Please note that if approved by JCAR, these changes to the fee schedule will go into effect December 1, 2008.
Workers’ Compensation Medical Fee Schedule will increase by 5.37%
The Illinois Workers' Compensation Commission recently announced that the rates in the Illinois workers' compensation medical fee schedule will be increased by 5.37%, which is the increase in the Consumer Price Index-U between August 2007 and August 2008. This increase will take effect for treatment on or after January 1, 2009. The 2009 fees will be posted online at the Commission’s website www.iwcc.gov by December.
USA Today Editorializes Against “Card Check”
In its October 16 edition, USA Today provided its reasons for opposing the Employee Free Choice Act, also known as card check. The editorial, “Our view on labor laws: No way to form a union: Workers deserve to hear both sides, vote in private”, not only pointed out the problems of taking an employee’s right to vote on unionization in private away, but also indicated that Sen. Obama supports it and Sen. McCain opposes it.
USA Today called organized labor’s efforts in support of the measure “surprising and disturbing”. The editorial concluded with: “Labor has seen its role decline since the 1950s, when about a third of all private sector employees belonged to unions, compared with about 7.5% today. So it's understandably eager to find ways to expand membership, particularly at a time when workers are feeling economically vulnerable. But undermining democratic principles is not the answer.” Full editorial
If the “card check” proposal becomes law, employment law in our nation will be turned on its head and employers across this country will see efforts from labor to organize like never before.
October Edition 2008
Card Check is a Key Business Issue for Presidential Election
Trying to sort out the policy differences between candidates can be difficult at times. But for the Presidential candidates, John McCain and Barack Obama on one of the most important labor management issues in decades there is a clear difference in the direction they would take the country.
Card check, misnamed as the “Employee Free Choice Act” (EFCA) by its proponents, would fundamentally turn labor law on its head by allowing an employer to be organized by a union without a secret ballot vote. Republican John McCain has indicated he would veto any such measure, whereas Democrat nominee Barack Obama is a strong backer of the measure and would sign it into the law if he is elected President.
Sen. Obama, an original cosponsor of the EFCA, urged his colleagues to pass the bill during a 2007 motion to proceed:
“ I support this bill because in order to restore a sense of shared prosperity and security, we need to help working Americans exercise their right to organize under a fair and free process and bargain for their fair share of the wealth our country creates. The current process for organizing a workplace denies too many workers the ability to do so. The Employee Free Choice Act offers to make binding an alternative process under which a majority of employees can sign up to join a union. Currently, employers can choose to accept--but are not bound by law to accept--the signed decision of a majority of workers. That choice should be left up to workers and workers alone.” (EMPLOYEE FREE CHOICE ACT OF 2007--MOTION TO PROCEED", Congressional Record, GPO (2007-06-26), pp. S8378-S8398.) Sen. McCain opposes the EFCA saying:
For more information about the issue go to the U.S. Chamber of Commerce website. |
Constitutional Convention Question…Creating Chaos for the Future?
Illinois voters in November will decide whether a constitutional convention should be held to revise our state constitution. From a labor law perspective, a dangerous direction that could be taken is establishment of a voter initiative power. Currently the state’s Constitution allows voters to change law by initiative only to the Legislative Article of our Constitution.
If voter initiative were to be expanded, Illinois could face ballot questions such as that considered in Ohio in 2006 when Ohio voters raised the minimum wage in Ohio. California employers have spent millions of dollars in their state on initiatives. Many of the California initiatives have dealt with employment related matters such as workers’ compensation benefits, healthcare benefits, workplace conditions, employment discrimination, etc. Most of the California initiatives were detrimental to employers in that state.
For more information on why the Illinois Chamber is opposing the question of holding a state constitutional convention go to the Alliance to Protect the Illinois Constitution website.
Illinois’ Unemployment Continues to Climb
The August figures for Illinois’ unemployment rate has climbed to 7.3%. The national rate is 6.1%. Illinois only trails Michigan (8.9%), California (7.7%) and Mississippi (7.7%). Illinois has lost 239,000 high paying manufacturing jobs since 1990?this loss of 26 percent of in-state manufacturing jobs over 17 years was worse than the rate of loss for the Midwest (20.8 percent) and the nation (20.9 percent). See Chicago Tribune article
September Edition 2008
General Assembly Approves Governor’s Plan to Expand Social Obligation of Small Business to Provide Healthcare
In a surprise move, the General Assembly approved an amendatory veto (AV) to HB 5285 that requires health insurance coverage for unmarried dependents up to age 26 and if a veteran up to age 30. This issue is one facet of the Governor’s plan to expand healthcare coverage. It requires that an employer provide the higher age coverage if dependent coverage is provided to its workforce. An employer is not required to provide dependent coverage nor pay any of the dependent premium. But, the most egregious provision of the Governor’s AV is the provision that does not require any creditable coverage for the dependent. In other words, no pre-existing exclusion is applied. This is like a homeowner waiting until the house catches on fire to buy homeowners insurance.
The Illinois House vote was 70-21. Seventeen House republicans joined all 53 democrats in attendance to send the amendatory veto over to the Senate. The Senate approved the measure 35-17-1. Three GOP senators (Sen. Larry Bomke-Springfield; Sen. John Jones, Mt. Vernon; Sen Carol Pankau-Bloomingdale) joined 32 democrats in approving the measure. Two Democrats voted “no”, Sen. Bill Haine (Alton) and Sen. Linda Holmes (Aurora).
While there are certainly valid reasons that raise questions as to the public policy value of the proposal, the AV is questionable also as to its constitutionality. Illinois is one of the few states that provides their Governor an amendatory veto pen. But the courts have provided limits on that power. In this instance the original, underlying bill expanded coverage to dependents. It allowed full-time college students to extend their dependent coverage by one year if they were injured or sick and left school as full-time student. The Governor’s addition is clearly related to the original legislation, but the question is whether the courts will allow such a drastic change. The language added by the Governor was never debated or voted on in either chamber of the legislature. In fact, bills introduced that dealt with this issue never were able to advance out of any committee in the Senate or House. If changes of this magnitude are allowed to be made by the executive branch one questions the need of the legislative process. The Illinois Chamber should consider legal options to challenge the constitutionality of enactment of HB 5285.
The unintended consequence of HB 5285 becoming law is that access to care for young adults in Illinois will actually diminish. As costs increase, employers will seek to mitigate their costs and avoid this requirement entirely. How? First, this will drive more employers to try self-insurance. Second, more employers will either discontinue to provide dependent coverage or will alter their plans like some already do and charge more premium if the employee has multiple children on the plan.
Autism Health Mandate Advances Again
During the General Assembly’s recent two weeks in Springfield, two different measures were amended to attempt to pass a mandate for autism coverage. Sen. James DeLeo (D-Chicago) amended HB 415, adding provisions identical to SB 1900 which will require group and individual insurance policies to provide up to $36,000 of coverage for a wide range of services and providers to treat children with autism spectrum disorders. The Chamber continues to ask for an amendment to allow employers of 50 and fewer employees an option to purchase this coverage, but the language was not provided in HB 415. The legislation now goes back to the House for concurrence. SB 1900 was held in the Senate due to the Speaker’s rules amendment. HB 415 does not have the Speaker’s rules language.
Not to be outdone, the Governor amenditorily vetoed HB 4255 sponsored by Rep. Bob Pritchard (R-DeKalb) and Sen. Link, adding SB 1900 to the legislation. The legislation will go back to the House Rules Committee to determine whether it meets the constitutional latitude granted to the Governor.
The Chamber is very concerned that mandates are driving the cost of healthcare insurance such that employers are no longer able to afford it. Recent data indicates that Illinois leads the nation in the number of businesses that have dropped health insurance benefits for its employees. While mandates such as this one have merit, they come with a cost…no health benefits for some.
Independent Contractor Rule Finalized
The Joint Committee on Administrative Rules (JCAR) advanced the Illinois Department of Labor’s changes to a proposed rule to implement the Employee Classification Act that went into effect on January 1, 2008. A number of changes recommended to IDOL by the Council were included in the proposed changes to the rules. The rule with changes approved by JCAR will become the adopted, final rule.
Of particular importance, IDOL agreed to bolster two opportunities for contractors to provide additional information to IDOL, one at the outset of an investigation, the other just before a formal charge is filed. The Council in its comments to IDOL and JCAR raised concerns of the lack of due process for contractors. These changes are helpful, however they fall far short of formal hearings as we had recommended.
Finally, IDOL agreed to consult with affected organizations between now and January 1, 2010 and, if appropriate, to seek either legislative or rulemaking amendments to address issues raised by affected parties, particularly with an aim to shortening the 3 year investigatory period.
For more information on the Employee Classification Act and the IDOL rule contact Jay Shattuck at 217-544-6590.
U.S. Supreme Court Rejects State Law Requiring “Neutrality” Towards Union Organizing
For several years, the Employment Law Council has vigorously opposed legislative efforts that have prevented state contractors from exercising their constitutional right to fight an effort to be organized by a union. A similar law in California was recently struck down by the U.S. Supreme Court. The Council’s Employment Law & Litigation Committee Chairman, Jeff Risch of Wessels, Pautsch & Sherman has prepared the following brief article on his thoughts about the decision. Click here for the article.
August Edition 2008
Autism Health Mandate Advances Again
During the General Assembly’s recent two weeks in Springfield, two different measures were amended to attempt to pass a mandate for autism coverage. Sen. James DeLeo (D-Chicago) amended HB 415, adding provisions identical to SB 1900 which will require group and individual insurance policies to provide up to $36,000 of coverage for a wide range of services and providers to treat children with autism spectrum disorders. The Chamber continues to ask for an amendment to allow employers of 50 and fewer employees an option to purchase this coverage, but the language was not provided in HB 415. The legislation now goes back to the House for concurrence. SB 1900 was held in the Senate due to the Speaker’s rules amendment. HB 415 does not have the Speaker’s rules language.
Not to be outdone, the Governor amenditorily vetoed HB 4255 sponsored by Rep. Bob Pritchard (R-DeKalb) and Sen. Link, adding SB 1900 to the legislation. The legislation will go back to the House Rules Committee to determine whether it meets the constitutional latitude granted to the Governor.
The Chamber is very concerned that mandates are driving the cost of healthcare insurance such that employers are no longer able to afford it. Recent data indicates that Illinois leads the nation in the number of businesses that have dropped health insurance benefits for its employees. While mandates such as this one have merit, they come with a cost…no health benefits for some.
Independent Contractor Rule Finalized
The Joint Committee on Administrative Rules (JCAR) advanced the Illinois Department of Labor’s changes to a proposed rule to implement the Employee Classification Act that went into effect on January 1, 2008. A number of changes recommended to IDOL by the Council were included in the proposed changes to the rules. The rule with changes approved by JCAR will become the adopted, final rule.
Of particular importance, IDOL agreed to bolster two opportunities for contractors to provide additional information to IDOL, one at the outset of an investigation, the other just before a formal charge is filed. The Council in its comments to IDOL and JCAR raised concerns of the lack of due process for contractors. These changes are helpful, however they fall far short of formal hearings as we had recommended.
Finally, IDOL agreed to consult with affected organizations between now and January 1, 2010 and, if appropriate, to seek either legislative or rulemaking amendments to address issues raised by affected parties, particularly with an aim to shortening the 3 year investigatory period.
For more information on the Employee Classification Act and the IDOL rule contact Jay Shattuck at 217-544-6590.
U.S. Supreme Court Rejects State Law Requiring “Neutrality” Towards Union Organizing
For several years, the Employment Law Council has vigorously opposed legislative efforts that have prevented state contractors from exercising their constitutional right to fight an effort to be organized by a union. A similar law in California was recently struck down by the U.S. Supreme Court. The Council’s Employment Law & Litigation Committee Chairman, Jeff Risch of Wessels, Pautsch & Sherman has prepared the following brief article on his thoughts about the decision. Click here for the article.
July Edition 2008
IDOL Responds to Council Comments on Employee Classification Act Rule
Earlier this year, Employment Law Council representatives met with the staff of the Illinois Department of Labor (IDOL) to discuss concerns about the emergency rules to implement the Employee Classification Act. The Council also submitted written comments to IDOL. A number of the suggestions made by the Council to IDOL have been included in the revised rule being submitted to the Joint Committee on Administrative Rules (JCAR).
The Employee Classification Act was effective January 1, 2008 and provides further regulation of the employee or independent contractor status determination for the construction industry. The Council had fought hard against the original legislation as it was being considered by the Illinois General Assembly and Governor Blagojevich.
For a copy of the revised rule and the response to comments from IDOL, contact Jay Shattuck at 217-544-6590.
Council’s Workers’ Compensation Committee Recommends More Review of Out-Patient Fee Schedule
The Illinois Workers’ Compensation Commission is considering implementation of the final piece of the medical fee schedule in Illinois, out-patient and ambulatory treatment facility services. Currently, employers are required to pay 76% of charge for these services and the Council has pushed for two years for inclusion of these services in the fee schedule. A lack of data as required by the statute has delayed these services inclusion until earlier this year.
However, Committee members have reviewed data that indicates potential flaws or inconsistencies in the proposed fee schedule, especially for physical therapy services. The Committee has directed ELC staff to ask the members of the Medical Fee Advisory Board at its meeting on June 19 to further delay the implementation until further review of the data can be accomplished.
To view the proposed out-patient fee schedule go to: IWCC
U.S. Department of Labor Deputy Secretary Howard M. Radzely Briefs Employment Law Council Members
Deputy Secretary Howard Radzely briefed Council members earlier this month as to what activities are on-going at the Agency. USDOL has a number of initiatives and has taken a new approach to working with employers and assisting them in their compliance with federal labor laws.
Howard M. Radzely is the chief operating officer of the U.S. DOL, a Cabinet agency with over 15,000 employees and an annual budget of over $50 billion. Mr. Radzely was confirmed by the U.S. Senate as Deputy Secretary on December 19, 2007. Prior to serving as the Acting Deputy Secretary and Deputy Secretary, Mr. Radzely served as the Solicitor of Labor, the chief legal officer in the Department for nearly seven years. Prior to joining the Department, Mr. Radzely was in private practice in Washington, D.C. concentrating in labor and employment law. He graduated summa cum laude from the University of Pennsylvania's Wharton School of Business and magna cum laude from the Harvard Law School, where he served on the Harvard Law Review. Prior to entering private practice, Mr. Radzely clerked for the Honorable J. Michael Luttig, United States Court of Appeals for the Fourth Circuit, and for the Honorable Antonin Scalia, Supreme Court of the United States.
Deputy Secretary Radzely spoke on the USDOL initiative “Compliance Assistance Initiative Resources” which provides employers on-line as well as toll-free telephone numbers to seek answers to questions from USDOL staff. For more information go to: www.dol.gov or compliancehelp@dol.gov
June Edition 2008
Workers’ Compensation Committee Reviews Proposed Fee Schedule Change
The Council’s Workers’ Compensation Committee is reviewing the Workers’ Compensation Commission’s proposed expansion of the medical fee schedule to out-patient facility services. The Commission issued a proposed rule with guidelines and instructions earlier in the year that has raised initial concerns. Committee members are individually analyzing the proposed fee structure to ascertain its impact and providing feedback to the Council in order for the Council to prepare a response for the next meeting of the Workers’ Compensation Commission Medical Fee Advisory Board being held on June 19.
Enterprise Zones & TIF Districts at RISK!
HB 773 proposes to extend the Prevailing Wage Act to all projects in an enterprise zone or a TIF district. As proposed, all privately funded projects except single or multi-family owner/occupied projects would be covered. It makes numerous other administrative changes some of which will overturn recent court decisions protecting contractors. HB 773 passed the House last year and is now pending on the floor of the Senate.
The Illinois Chamber is Opposed to HB 773 for the following reasons:
Council to Host New Laws Briefing
On June 19th, the Council is hosting a free member meeting on what new laws and regulations have been put into place that impact the human resources aspect of an Illinois employer. Employment Law and Litigation Committee Chairman Jeff Risch will lead the program and will be joined by ELC staff Jay Shattuck. Discrimination, healthcare, labor relations, workers’ compensation and a number of other issues will be covered in the briefing. Mr. Risch is a partner in the law firm Wessels, Pautch & Sherman P.C. of St. Charles.
In addition, the briefing also will consist of a panel of state leaders from state agencies with employment law regulation and enforcement responsibilities. The panel will discuss what current issues are impacting Illinois employers from their agency and how employers can be more effective and productive when dealing with the agency. We are planning an hour for the panel which will include questions and discussion.
The program begins at 2:00 pm and concludes at 4 pm. It is being held at the Illinois Chamber Office in Chicago, 311 S. Wacker Dr. 15th Floor. Space is limited and registration will be on a first come basis. To register for this free program contact Sarah Seiz at 217-544-6590 or sarahseiz@att.net
The following day the Illinois Chamber will be holding its annual luncheon meeting with featured speaker the Honorable Mel Knight, Minister of Energy, Alberta, Canada. For registration information of the annual meeting.
May Edition 2008
Return of the Structural Work Act
Reinstatement of the Structural Work Act (SWA) recently advanced out of the House Judiciary Civil Law Committee as Amendment #1 to HB 2094 under the name “Construction Safety Act of 2008.” HB 2094 also reinstates the cause of action and all the prior case law of the SWA that was repealed in 1995. A study in 1998 showed that nearly $300 million in insurance liability and related legal costs were saved with the repeal of the SWA.
Chamber members must contact their State Representative and ask them to vote “NO” on HB 2094. Bullet points highlighting why we are opposed can be found at the Chamber’s grassroots action center.
Whitley Expresses Illinois Chamber’s Disappointment on Recent UR Decision by WC Commission
In a letter to Illinois Workers’ Compensation Commission Chairman Dennis Ruth, Illinois Chamber President Doug Whitley has expressed his concern and disappointment on behalf of Illinois employers with a recent decision on utilization review (UR) issued by one of the Workers’ Compensation Commission panels. The Vaupel v. Ingersoll Machine Tools decision (Vaupel v. Ingersoll Machine Tools, 06 WC 25877, 08 IWCC 130, February 1, 2008) was a dispute over whether the claimant needed surgery to a wrist which was recommended by his treating doctor.
Ingersoll used the 2005 changes to the law that allows for utilization review of a prospective medical service to determine the reasonableness and medical necessity of the surgery. Utilization review resulted in denial by both the generalist and the specialist in hand care and treatment. The Arbitrator noted in his decision that one of the reviewing physicians stated, “The case notes suggest that the claimant does not have ulnar positive findings, does not have ulnar impaction, and does not have leakage of the TFC although there may be a very pinpoint lesion…further medical clarification is needed regarding the medical necessity of surgery.”
The Commission panel consisting of Commissioner Barbara Sherman, Commissioner Youlaine Dauphin and Commissioner Kevin Lamborn overturned the decision of the Arbitrator on a 2-1 vote. Management Commissioner Kevin Lamborn dissented indicating that the utilization review process was properly followed and that the Arbitrator had correctly interpreted the intent of the statute.
Whitley noted,” The “Labor” and “Public” Commissioners by relying on the treating physician without explanation has severely undermined the ability of the employer to assure quality care is provided to injured workers. Treating providers are not infallible and there should not be a presumption in favor of the treating doctor's opinion. The medical evidence and opinions should be considered impartially, with no presumption.
Utilization review is a process that is the normal course of practice in the group health arena. The URAC standards that are required for utilization review allow for appropriate appeals by the treating physician and are designed to help determine the best course of treatment for the injured worker. The Chamber’s goal of bringing utilization review to Illinois’ workers’ compensation system in the 2005 amendments to our law was to help weed out unnecessary services and to bring the most effective care to injured workers. In turn, employer costs for medical care for workers’ compensation also would be tempered as a result of greater review.”
“We also understand that the use of a utilization review process is not always perfect. If the URAC process was not followed, if the decision was not based upon national standards of care, peer reviewed national guidelines, or on evidence-based medicine, we would better understand a decision to agree with the treating doctor. It is our understanding however and our read of the Commission decision that the employer did everything within the intent of Section 8.7 of the Act in attempting to provide the best course of treatment given the reasonable and necessity standards of the law.
These are the kind of decisions that puts Illinois decades behind other states when it comes to dealing with workers’ compensation disputes. It undermines the 2005 agreement to address not only the cost of workers’ compensation medical services but to advance the care injured workers deserve,” wrote Whitley.
Whitley pointed out, “These are the kind of decisions that keep Illinois decades behind other states when it comes to dealing with workers’ compensation disputes. It undermines the 2005 agreement to address not only the cost of workers’ compensation medical services but to advance the care injured workers deserve.
As the Commission reviews these types of cases in the future, we urge the arbitrators and commissioners to keep in perspective that the intent of the employer community to add utilization review to the law in 2005 was to bring a viable process that will enhance care and outcomes for injured workers, eliminate unnecessary and unreasonable treatments and bring more cost-effectiveness to Illinois employers paying for medical services under the law.”
For a copy of the letter, contact Jay Shattuck, Employment Law Council Executive Director.
IDES Analysis Indicates Trust Fund Balance $2 Billion Ahead of Projections
In 2003 when the Unemployment Insurance Trust Fund was deep in the red, The Illinois Chamber, other business representatives and labor forged an agreement that raised employer UI taxes and reduced UI benefits. Five years later, the UI Trust Fund is over $2 billion ahead of where it was projected to be. In a report released last month to the UI Advisory Board, the Illinois Department of Employment Security (IDES) indicated, “Two-thirds of the way through the original 6-year forecast horizon for the 2003 Agreed Bill, the system has performed significantly better than expected due primarily to an economy that improved sooner and at a stronger pace than what the experts were predicting back in 2003.
Under the 2003 economic assumptions, the Agreed Bill was expected to produce a December 31, 2007 UTF balance that was approximately $277 million in debt. In reality, the improving economy led to a 2007 year-end positive UTF balance of $1.802 billion with no remaining debt.”
The IDES report also stated, “Looking ahead, assuming annual Illinois unemployment rates of 5.3% to 5.4%, the original, relatively modest goal of a December 31, 2009 UTF balance of $0 would be surpassed by $1.3 billion. However, year-end UTF balances are projected to have peaked in 2007 and
decline each subsequent year to a 2010 year-end balance of approximately $0.7 billion.”
Contact Jay Shattuck for a copy of the IDES report.
April Edition 2008
Health Insurance Mandates Dominate Legislative Agenda in Springfield
While last session focused on the Governor’s massive healthcare plan, this year the legislature appears to be heading down the path of punishing small business health plans with coverage mandates. The fact that health insurance costs have been dramatically increasing for some time and forcing employers to reduce their benefits or eliminate healthcare for employees is not stopping lawmakers from continuing to drive up the cost of health insurance and to put health plans in jeopardy for many families in our state.
Autism and “habilitative care” mandates propose expensive coverages.
Sen. James DeLeo (D-Chicago) and a growing list of bipartisan sponsors of SB 1900 seek to require group and individual insurance policies to provide up to $36,000 of coverage for a wide range of services and providers to treat children with autism spectrum disorders. Sen. DeLeo has indicated an interest in addressing our concerns as to the breadth of the proposed coverage and the types of providers that could be reimbursed. Without serious modification though, SB 1900 will cost small employer health plans hundreds of millions of dollars annually. SB 1900 likely will pass the Senate when they return next month.
Rep. Beth Coulson and 34 co-sponsors also have an expansive mandate, HB 5595, that requires payment of habilitative services including, but not limited to occupational therapy, physical therapy, and speech therapy for children under the age of 19 with congenital or genetic defects existing at or from birth or with a defect acquired at a young age. We are meeting with Rep. Coulson to try to narrow the scope of the coverage this week. This bill is on the House floor for consideration.
IDOL Reaches Out to Chamber on Employee Classification Act
The Illinois Chamber has been advocating that the Illinois Department of Labor (IDOL) should be emphasizing compliance with the new Employee Classification Act as much as enforcement. This new law and the emergency rules filed to begin its implementation as of January 1 of this year are inadequate in providing guidelines for compliance by construction contractors impacted by the law. IDOL has held a number of outreach meetings since the beginning of the year that have raised the awareness of the new law for construction contractors.
To IDOL’s credit, they have heard the Chamber’s criticism and met recently with Jeff Risch an attorney from Wessels & Pautch and the Council’s Employment law Committee Chairman, ELC Executive Director Jay Shattuck and other business representatives. IDOL Director Catherine Shannon and several of her legal and enforcement staff listened to our questions regarding interpretations of the law and suggestions as to how to provide more guidance for compliance. While we received no commitments, Director Shannon indicated that the Department will be adding in the future to its website a Q & A segment on the Act. We agreed to continue discussions and that we would provide additional background information and a list of suggested documents that could be used by IDOL to help a contractor to determine whether a relationship is employment or independent contractor under the Act.
The difficulty that IDOL faces is that the law is poorly drafted. Unfortunately, legislation introduced to help clarify the law HB 5060 by Rep. Bill Mitchell (R-Forsyth) never was released from the House Rules Committee for consideration.
Illinois Case Law Summary Available
Employment Law Committee Chairman, Jeff Risch has released to the Council his firm’s recent review of various employment and labor case law that has an Illinois focus. Entitled “Key Case Law Developments in Employment and Labor Law---in Illinois”, the 21 page document highlights important recent decisions in the areas of employment discrimination, FMLA, Equal Pay Act, employee benefits and other employment case law impacting Illinois employers. For a copy, email ELC executive Director Jay Shattuck at jaydeeshattuck@att.net
March Edition 2008
Chamber Workers’ Compensation Initiatives Introduced
SB 2363/HB 5659
Sen. Dan Cronin (R-Elmhurst) and Rep. Dave Reis (R-Effingham) have introduced legislation to address the areas of abuse employers face under Illinois’ workers’ compensation system. Since the 2005 revisions of the Workers’ Compensation Act, the Illinois Chamber of Commerce has held a series of meetings with employers across the state to ascertain the impact of the new law and need for further changes. Employers have consistently and clearly indicated that more needs to be done to address the abuses and the imbalance of the workers’ compensation system in our state. This legislation reflects what employers from all parts of Illinois have told the Illinois Chamber they believe will enhance the workers’ compensation system for legitimately injured workers and employers alike.
Council Offers Comments on Employee Classification Act Rule
In its recent letter to the Illinois Department of Labor (IDOL), the Council expressed disappointment that the rule to implement the new Employee Classification Act does not provide more guidance to assist construction contractors in their compliance with the law. The Council indicated its appreciation to IDOL for some of the minor clarifications such as the definition of “person with an interest in compliance with the Act” which should help reduce frivolous and harassing complaints and the 180 day limitation for filing a complaint. “Certainly blatant misclassification of workers by a business and disregard of the many laws on classification of workers by a business should be curtailed and violators penalized. The economics of misclassifying a worker creates serious unfair competitive advantages to the detriment to employers who properly classify their employees. However, this area of law has many gray issues, is often litigated and has an extensive history for finding legitimate independent contractor relationships. That is why we hoped that the Department would have been more helpful in the rules to assist contractors who wish to comply with the law”, wrote Council Executive Director Jay Shattuck. Our Comments also pointed out the rule’s lack of due process protections and the need for specific examples. For a copy of the comments contact Jay Shattuck at jaydeeshattuck@att.net
Commission Hands Business a Setback to Improving WC Medical Care
The Workers’ Compensation Commission recently ruled against employers seeking to provide quality care to injured workers and control medical costs in workers’ compensation, Vaupel v. Ingersoll Machine Tools, (06 WC 25877, 08 IWCC 130, February 1, 2008). The Vaupel v. Ingersoll Machine Tools decision involved a dispute over whether the claimant needed surgery to a wrist which was recommended by his treating doctor. Ingersoll used the 2005 changes to the law that allows for utilization review of a prospective medical service to determine the reasonableness and medical necessity of the surgery. Utilization review resulted in denial by both the generalist and the specialist in hand care and treatment. The Arbitrator noted in his decision that one of the reviewing physicians stated, “The case notes suggest that the claimant does not have ulnar positive findings, does not have ulnar impaction, and does not have leakage of the TFC although there may be a very pinpoint lesion…further medical clarification is needed regarding the medical necessity of surgery.”
The Commission panel consisting Com. Barbara Sherman, Com. Youlaine Dauphin and Com Kevin Lamborn overturned the decision of the Arbitrator on a 2-1 vote. Management Commissioner Kevin Lamborn dissented indicating that the utilization review process was properly followed and that the Arbitrator had correctly interpreted the intent of the statute.
The “Labor” and “Public” Commissioners by relying on the treating physician without explanation has severely undermined the ability of the employer to assure quality care is provided to injured workers. Treating providers are not infallible. Utilization review is a process that is the normal course of practice in the group health arena. The URAC standards that are required for utilization review allow for appropriate appeals by the treating physician and are designed to help determine the best course of treatment for the injured worker. The Chamber’s goal of bringing utilization review to Illinois’ workers’ compensation system was to help weed out unnecessary services and to bring the most effective care to injured workers. In turn, employer costs for medical care for workers’ compensation also would be brought under control.
These are the kind of decisions that puts Illinois decades behind other states when it comes to dealing with workers’ compensation disputes. It undermines the 2005 agreement to address not only the cost of workers’ compensation medical services but to advance the care injured workers deserve.
February Edition 2008
E-Verify Legislation Introduced in Springfield…New Form I-9
Sen. Iris Martinez (D-Chicago) has introduced legislation, SB 1878, to address the Department of Homeland Security’s (DHS) recent lawsuit against the State. The amended law would “discourage”, but not prohibit, Illinois employers from participating in the federal government’s voluntary pilot E-Verify program, and would declare that the State of Illinois will not participate in the program until its accuracy is improved to 99%.
We are reviewing SB 1878, especially what is meant by “employers are discouraged from participating” and “automatically verify”. SB 1878
Sen. Bill Brady (R-Bloomington) has also introduced legislation, SB 1870 to address this issue. Sen. Brady’s bill seeks to repeal the section that led to the DHS lawsuit.
The U.S. Citizenship and Immigration Services has issued a new Form I-9 to verify employees' eligibility for employment. Employers were required to begin using the new form by December 26, 2007. Previous versions of Form I-9, in English or Spanish, are no longer valid after December 26, 2007. Employers still using the old forms after this date will be subject to applicable penalties and fines.
The number of documents employers can accept to verify employment eligibility have been reduced. Five documents were eliminated because they lacked security features necessary to deter counterfeiting, tampering and fraud.
The federal government requires all employers to complete a Form I-9 for every employee within the first three days of employment and to retain that form for either one year after termination of employment or three years, whichever is longer. There is no small business exemption for the Form I-9.
For more information on the I-9 Form as well as down-loadable copy go here.
JCAR Blocks “Smoke Free” Rule
At the January meeting of the Joint Committee on Administrative Rules (JCAR), JCAR objected to, and prohibited the filing of, the Department of Public Health’s proposed rules to implement the Smoke Free Illinois Act (77 Ill Adm Code 975; 31 Ill Reg 13672). JCAR indicated that the adoption of this rulemaking constituted a serious threat to the public interest and welfare because the rulemaking contained no due process by which an accused violator may argue that no violation occurred, appeal a finding of a violation, or appeal the amount of the imposed fine. An alleged violator's only options provided by the proposed rule were to pay the fine or challenge enforcement action through the circuit court.
The Department will have an opportunity to respond to JCAR’s ruling hopefully rectifying the problem and move forward with implementation of the new law.
Public Act 95-17 prohibits smoking in public places or places of employment. PA 95-17 defines "public place" as that part of any building or vehicle used by and open to the public, whether or not the building or vehicle is owned wholly or partially by private or public entities and whether or not a fee is charged for admission. The Act prohibits smoking within 15 feet of entrances, exits, windows that open, or ventilation intakes that serve enclosed areas where smoking is prohibited. The Act defines private clubs, bowling alleys, restaurants, public restrooms, and numerous other locations as public places. Responsibilities of employers are provided in the law.
Union Membership Falls in Illinois in ‘07.
A report just released by the federal Bureau of Labor Statistics indicates that while Illinois has had tepid job growth in 2007, both the number of union members and the percentage of union members as part of the workforce fell last year. The percent of total employed that are members of a union fell from 16.4% in 2006 to 14.5% in 2007. View the BLS report for Illinois, nation and all states here: Union Members Summary
WCRI Releases Illinois Workers’ Compensation Study
The new Workers’ Compensation Research Institute (WCRI) report Baseline Metrics for Monitoring 2005 Reforms in Illinois: CompScope™ Benchmarks, 8th Edition is now available.
Published annually, CompScope™ provides policymakers and others a tool to monitor changes in state trends and system performance by providing detailed benchmark information on two questions central to workers’ compensation:
(1) How does the performance of a state system compare with that of other states?
(2) How is a state system changing over time?
CompScope™ provides the most meaningful comparisons currently available for more than 60 system performance measures for fourteen large states (Arkansas, California, Florida, Illinois, Indiana, Louisiana, Maryland, Massachusetts, Michigan, North Carolina, Pennsylvania, Tennessee, Texas, and Wisconsin). The study uses data from claims from injury years 2000 through 2005, evaluated as of mid-2006 from WCRI’s Detailed Benchmarking/Evaluation (DBE) database containing over 23 million claims.
Reports may be purchased through the WCRI web site www.wcrinet.org
January Edition 2008
New Laws in 2008
SB500 Smoke-Free Illinois Act prohibits smoking in public places or places of employment. PA 95-17 defines "public place" as that part of any building or vehicle used by and open to the public, whether or not the building or vehicle is owned wholly or partially by private or public entities and whether or not a fee is charged for admission. The Act prohibits smoking within 15 feet of entrances, exits, windows that open, or ventilation intakes that serve enclosed areas where smoking is prohibited. The Act defines private clubs, bowling alleys, restaurants, public restrooms, and numerous other locations as public places. Responsibilities of employers are provided in the law and are being clarified by rules proposed by the Department of Public Health. Public Act 95-17
For complete text of the rules, click here.
HB 1743 Hiring and Firing Practices provides that it is an employment discrimination violation for any employer participating in the federal Basic Pilot Program (E-Verify) for employment eligibility confirmation to refuse to hire, to segregate, or to act with respect to recruitment, hiring, promotion, renewal of employment, selection for training or apprenticeship, discharge, discipline, tenure or terms, privileges or conditions of employment without following the procedures under the Basic Pilot Program. Public Act 95-137
HB 1744 E-Verify System prohibits employers from enrolling in any Employment Eligibility Verification System, including the Federal Basic Pilot program, as authorized by federal law, until the Social Security Administration and Department of Homeland Security databases are able to make a determination on 99% of the tentative non confirmation notices issued to employers within 3 days, unless otherwise required by federal law. Homeland Security has challenged the constitutionality of this Act and it appears that they will prevail with their preemption argument. Additional employer training and posting requirements also are part of this Act. Public Act 95-138
HB1509 Employment Discrimination authorizes employment discrimination complainants to commence a civil action in the appropriate circuit court instead of filing a complaint with the Human Rights Commission. If complaint is filed with the Commission, a complainant may not later commence a civil action in a circuit court. Public Act 95-243
SB479 "Successor Clause" requires that service contracts with the State include a clause that when a business purchases a business with the state contract, the purchasing entity must certify (i) that it shall offer to assume the collective bargaining obligations of the prior employer and (ii) that it shall offer employment to any employees currently in any existing bargaining unit who perform substantially similar work. Public Act 95-314
HB 1795 Independent contractors provides that an individual performing services for a construction contractor is deemed to be an employee of the contractor unless it is shown that: (1) the individual has been and will continue to be free from control or direction over the performance of the service for the contractor, both under the individual's contract of service and in fact; (2) the service performed by the individual is outside the usual course of services performed by the contractor; and (3) the individual is engaged in an independently established trade, occupation, profession or business; or (4) the individual is deemed a legitimate sole proprietor or partnership. The penalties and remedies provided for in this legislation are extreme and over the top.
We anticipate that the Illinois Department of Labor will be issuing proposed rules in the next few weeks to implement this new law. Public Act 95-26
HB 1855 Drug Testing for Construction Contractors prohibits an employee’s use, possession, attempt to possess, distribute, deliver, or be under the influence of cannabis or a controlled substance, or use or be under the influence of alcohol, while performing work on a prevailing wage project. A contractor must have a substance abuse prevention program in place with specified elements. Public Act 95-635
December Edition 2007
Immigration Change Blocked by Federal Lawsuit
Earlier this year the Governor signed HB 1744 into law that prohibited Illinois employers to participate in the federal pilot program for verification of citizenship for employment purposes (e-verify). Homeland Security shortly after the Governor’s action filed a lawsuit blocking the state’s implementation of the law arguing that the state law is preempted by federal law. We recently have heard that the Illinois Attorney General agrees with the U.S. Department of Justice.
Some proponents of HB 1744 are looking at other ways to “discourage” Illinois employer use of the e-verify system. While Chamber members have expressed frustration with the burden that the e-verify program can cause when there are inaccuracies within the databases used for the program, we believe that the e-verify program can be a tremendous tool to assist employers in complying with law. We intend to continue working on this issue in Illinois, finding solutions to enforcement and efficient ways for verification of citizenship status by employers.
Workers’ Compensation Committee Continues Fight for Employers
The Council’s Workers’ Compensation Committee met earlier this month to help provide guidance to the employer representatives to the Medical Fee Advisory Board. A number of critical issues at the Workers’ Compensation Committee are being implemented, including the outpatient medical fee schedule and an access to care process.
Another key issue that the Committee is working diligently on is the concern about potential billing abuse with implants. The Committee is gathering examples of billing abuses and building a case that the current reimbursement methodology is unfair and unreasonable for employers. Illinois is not alone on this front as a number of states and the federal government are looking at ways to provide greater transparency to payers of the devices and equipment. U.S. Senators Grassley and Specter have introduced The Transparency in Medical Device Pricing Act of 2007. S.2221 amends the Social Security Act to require any manufacturer of an implantable medical device to report the average and median sales price of each covered medical device. The information would then be made publicly available on the CMS website. While it is highly unusual for a law to require public disclosure of pricing information for such equipment, proponents point to the need to control increasing costs of health care and the resulting pressures on hospitals, patients, and private and public payers as justification for this departure.
The Committee’s next meeting is scheduled for December 6 at the Chamber’s offices in Chicago from 2-4 pm. Our meeting agenda will include an open discussion with the three management Commissioners, Commissioner Basurto, Commissioner Lindsay and Commissioner Lamborn all whom will be in attendance.
Governor’s Challenge of JCAR Could Have Dramatic Impact on All Future Rulemakings
Gov. Rod Blagojevich has decided to ignore the Joint Committee on Administrative Rules (JCAR) vote to suspend and prohibit implementation of emergency rules filed by the Department of Healthcare and Family Services (HFS) that seek to implement a drastic expansion of FamilyCare. HFS has been instructed to proceed with implementation of the expansion including the enrollment of individuals with incomes up to 400% of the federal poverty level (over $80,000 for a family of 4).
If the Governor succeeds in ignoring legislative oversight of proposed rulemakings, he would secure unprecedented authority to shape state government through the rulemaking process. The Judicial Branch is likely to decide the extent of the Governor’s power to ignore JCAR.
The Governor’s action raises a state constitutional question that likely will be litigated. The question is a separation of powers and whether the General Assembly through JCAR can impede the authority of the Governor to implement programs under the executive branch of government though the administrative rules process. Interestingly, it was Gov. Blagojevich that signed into law the legislation that expanded the authority of JCAR to suspend and prohibit a rule’s implementation. Prior to 2003, JCAR only could “object” to a rule, which did not prevent an agency from proceeding with implementation of the rule.
November Edition 2007
Governor’s Healthcare Expansion Blocked by JCAR
On a 9-1 vote earlier this month, the Joint Committee on Administrative Rules (JCAR) voted to prohibit and suspend the implementation of a proposed rule to require quarterly reporting of certain healthcare data by Illinois insurers (Division of Insurance’s proposed rule “Supplemental Reports for Accident and Health Insurers” (50 ILL. Adm. Code 937- Notice Published: 31 ILL. Register 10699 on July 27, 2007). This is the same rule that JCAR voted to suspend as an emergency rule last month. This action prohibits the Division of Insurance from implementing the rule provisions.
While citing that they believe the Department of Financial and Professional Regulation does not have the statutory authority to collect the data sought in the rule, several members of JCAR voiced their support of DOI’s efforts to collect the data. In essence, JCAR was advising DOI to clarify the law through the legislative process.
Of additional concern are the proposed rules that are to take effect July 1 of 2008. The Division of Insurance is proposing to regulate rates of companies providing individual health insurance policies to Illinois residents. The rule also attempts to implement a modified community rating approach for individual policies written in Illinois. In addition DOI is expanding the annual certification filing required of insurance carriers for small employers under the Small Employer Health Insurance Rating Act. Insurance companies will be required to report, effective 1/1/08, rate data for each class of business in their annual certification, along with the lowest actual premium rate and highest annual premium rate for each class of business. We have submitted our comments to DOI and JCAR.
Workers’ Compensation Committee Tackles Key Issues
The Council’s Workers’ Compensation Committee has been actively working with the employer representatives of the Medical Fee Advisory Board to continue efforts to implement the medical fee schedule and other workers’ compensation medical issues. We are reviewing the proposed fee schedule for outpatient and ambulatory surgery center services which currently are not covered by the fee schedule and reimbursed at 76% of charge. The Committee is preparing comments and a response to the Workers’ Compensation Commission Chairman on the proposal.
The Committee also is exploring ways to assist employers who are dealing with fraudulent claims. We are supporting employer efforts like those of U.S. Cold Storage in fighting workers’ compensation fraud. If your company is interested in how combat fraud contact Jay Shattuck, ELC Executive Director.
Public Health Issues Smoking Rules
The Illinois Department of Public Health has issued a proposed a rule, "Smoke Free Illinois Code" (77 Ill Adm Code 695; 31 Ill Reg 13672), to implement the statewide smoking ban law (SB 500/PA 95-17). Public Act 95-17, which goes into effect January 1, 2008, prohibits smoking in public places or places of employment. PA 95-17 defines "public place" as that part of any building or vehicle used by and open to the public, whether or not the building or vehicle is owned wholly or partially by private or public entities and whether or not a fee is charged for admission. The Act prohibits smoking within 15 feet of entrances, exits, windows that open, or ventilation intakes that serve enclosed areas where smoking is prohibited. The Act defines private clubs, bowling alleys, restaurants, public restrooms, and numerous other locations as public places. Responsibilities of employers are provided in the law and are being clarified by the rule.
"No Smoking" signs must be posted, and ashtrays must be removed. The Department of Public Health, State-certified local public health departments, and local law enforcement will enforce the provisions of the Act, and complaints may be registered with these agencies. The rulemaking sets forth fines for violations of the Act of $100 to $250 per occurrence for individuals who smoke in prohibited areas and $250 to $2,500 for business owners, employers, and others who permit smoking in prohibited areas under their control. The rulemaking also prohibits discrimination against individuals who exercise their rights under the Act.
We are reviewing the rule to determine whether we will be submitting any comments. Go to the October 5, 2007 Illinois Register to view.
October Edition 2007
JCAR Unplugs Gov’s Latest Healthcare Scheme
Citing that they did not believe the Department of Financial and Professional Regulation had met the statutory standard for an emergency rule, the members of the Joint Committee on Administrative Rules (JCAR) voted 11-0 to suspend the Division of Insurance’s emergency rule “Supplemental Reports for Accident and Health Insurers” (50 ILL. Adm. Code 937- Notice Published: 31 ILL. Register 10699 on July 27, 2007).
During the vote taken on September 18, several of the JCAR members expressed support of the Director’s efforts to collect the data he seeks, but they opposed the use of the emergency rule process to implement the rule.
This action prohibits the Division of Insurance from implementing the emergency rules provisions. Insurance Director McRaith indicated that the Administration will continue to pursue the rule’s provisions through the proposed rule process. That process does not allow the implementation of the rule until a public comment process is completed and JCAR reviews the rule.
Voting to suspend the rule were: Sen. Burzynski; Sen. Clayborne; Sen. Crotty; Rep. Hassert; Sen. Hultgren; Rep. Lang; Rep. Leitch; Rep. Miller; Rep. Mulligan; Sen. Rutherford; and Sen. Silverstein.
Read the full report here.
Workers’ Compensation Committee Works on Fee Schedule Changes
The Council’s Workers’ Compensation Committee met on September 5 to review several proposals of the Workers’ Compensation Commission to expand the medical fee schedule to include outpatient services. Currently, the fee schedule does not include such services and employers are required to pay 76% of charge which is counter to the 2005 law changes that are intended to better contain medical costs for workers’ compensation.
In addition, the Committee is working on strategies to better inform and assist employers in reducing workers’ compensation fraud. The Division of Insurance has hired four additional investigators in the Fraud Unit, yet we continue to meet reluctance from states attorneys to prosecute workers’ compensation fraud.
Recent Study Questions Causes of Carpal Tunnel Injuries
A recent article written by a doctor affiliated with Northwestern University indicates most cases of carpal tunnel syndrome do not have an identifiable cause. Women are more commonly afflicted than men and incidence increases with age. Other conditions associated with carpal tunnel syndrome may include wrist trauma, obesity and hypothyroidism. Additionally, rheumatoid arthritis and renal (kidney) failure may lead to an increase in pressure within the carpal tunnel while drug toxicity, diabetes, and alcoholism may have direct injurious effects on the median nerve. CTS also occurs in 20-45 percent of all pregnancies, however it typically disappears after childbirth.
The article can be found in this month’s issue of the Journal of the American Academy of Orthopedic Surgeons. We thank Gene Keefe of Keefe, Campbell & Associates for bringing it to our attention.