Uninsured Employers in Illinois Can be Subjected to High Punishment
Workers compensation is a system that is designed by law to pay certain benefits for injuries and diseases that are work related without regard to fault. A governmental agency known as “the Illinois Industrial Commission” is in charge setting rules and resolving disputes of both injured workers and employers.
Employees in Illinois get covered immediately after hire. The Workers Compensation Act states that any injury that is caused in whole or in part by the employee’s work is covered. This includes also preexisting conditions that are aggravated by work.
Benefits provided under workers comp include medical care required to cure the injury plus certain disability income benefits, as well as vocational rehabilitation benefits. There is also death benefit for surviving family members if the injuries lead to death of the worker.
Employers in Illinois must maintain workers compensation coverage (self insured with permission of the Commission or purchase workers compensation insurance policy). All employers are also required to pay 100% of the premium of the workers compensation insurance. Benefits that are paid to injured employees are not taxable to the employees. Employers must also maintain records of all work related injuries. All employers should post a notice in each workplace which must explain workers rights under the Workers Compensation Act and list details of employer’s insurance.
An employer who fails to provide workers compensation because of negligence is guilty of Class A misdemeanor for each day without coverage, punishable by up to 12 months in jail and a fine of $2,500. If the employer knowingly fails to provide workers compensation then the employer is guilty of Class 4 Felony for each day without coverage, punishable by up 3 years in jail and $25,000 fine. The state can also shut down the employer if the employer knowingly fails to provide workers compensation coverage.
An injured employee must report the work related injury to the employer’s management orally or in writing as soon as possible but not more than 45 days of the injury. Reporting an injury to a co-worker is not acceptable. Employer must provide all first aid and medical care, inform workers compensation insurance carrier, begin making disability payments if disability is expected to last more than 3 days. If employer disputes the injury, a written explanation must be provided to the employee.
Making fraudulent statements by employers or employees regarding workers compensation is classified as Class 4 Felony punishable by up to 3 years in jail and $25,000 fine.
The cost of workers compensation is based on several factors: (1) The nature of work – workers compensation for roofers cost significantly more than clerical employees. (2) Payroll- it determines the amount of exposure of the insurer to future disability payments if there is an injury. (3) Prior claims. The more claims you have the more you pay to workers compensation- up to a limit. If insurance companies do not wish to insure a particular employer because of past claims or because of the nature of the business, the employer may go to the pool (National Council on Compensation Insurance) to get coverage.
The Premiums that are charged by insurance companies for workers compensation coverage are always estimates, not final numbers. Because the insurance company will be covering an unknown number of (future) employees in the future, no premium can be exactly determined until the end of the policy term which is at the time when the insurance company audits the payroll of the employer. At the end of the policy term if the actual wages that the employer paid during the policy term is equal to the payroll the employer reported as projected payroll at the time of purchasing the policy then there will be no changes in premium. However, if the employer over-projected the wages at the time of getting the coverage then the company may owe the employer a refund. If the employer under-projected the wages at the time of writing up the policy, the employer may have to pay more premiums to the insurance company for past coverage.
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