Locke Lord QuickStudy: Illinois Adopts Substantial Workers' Compensation Reform to Address COVID-19

Through a virtually unanimous vote in the General Assembly, Illinois adopted substantial changes in ‎its Workers’ Compensation and Occupational Diseases statutes to address the COVID-19 pandemic. ‎Recognizing that many workers face increased risk of infection from the COVID-19 virus in the ‎workplace, the General Assembly and Governor Pritzker modified the Illinois Workers’ ‎Compensation laws through Public Act 101-633 (“WC Covid Legislation”) to increase the chances ‎that front-line and other essential workers receive workers’ compensation benefits after contracting ‎COVID-19. Industry experts project the likely costs to be in the neighborhood of $500,000,000.‎

Before the enactment of the WC Covid Legislation on June 5, 2020, employees seeking workers’ ‎compensation benefits would need to prove that any disease they contract, including COVID-19, both ‎occurred during the course of their employment and arose out of their employment. The WC Covid ‎Legislation, eliminates certain front-line and essential employees’ initial burden of proving a COVID-19 ‎diagnosis to be a compensable occupational disease through the use of “rebuttable presumptions.” ‎Now, if a covered employee contracts the virus, it “shall be rebuttably presumed” that the disease ‎arose out of and in the course of the employee’s employment. Similarly, the disease “shall be ‎rebuttably presumed to be causally connected to the hazards” of the employee’s work. This means ‎that certain front-line and essential workers that become sick with COVID-19 will enjoy a presumption ‎that they are entitled to workers’ compensation benefits, which includes payment for medical costs, ‎lost wages, and, potentially, death benefits.‎

This represents a substantial change in the law. Historically, it has been very difficult to prove that ‎communicable diseases present in the community at large, such as influenza and pneumonia, were ‎attributable to the workplace and thus compensable under the Illinois Workers’ Compensation ‎regime.‎

The WC Covid Legislation applies to front line workers such as police, fire personnel, and all health ‎care providers. The legislation also applies to any individual employed by “essential businesses” as ‎defined in Governor Pritzker’s Executive Order 2020-10 if the individual employed by the essential ‎business is required to encounter members of the general public in the workplace or to work in ‎employment locations of more than 15 employees.‎

Whether any employee’s claim will be compensable will depend on whether the claimant’s employer ‎presents evidence to rebut the presumption. The WC Covid Legislation provides three ways to ‎‎“rebut” or defeat the presumption:‎

• The employee was working from home or outside the workplace for at least 14 days ‎prior to the employee’s contraction of COVID-19; ‎
  
  
• The employer strictly adhered to industry-specific workplace sanitation, social ‎distancing, and safety practice guidelines as defined by either the Center for Disease ‎Control or the Illinois Department of Public Health; or
  
  
• The employee was exposed to COVID-19 by an alternative source. ‎

The presumptions in the WC Covid Legislation apply to COVID-19 cases diagnosed in 2020. ‎For cases occurring after June 15, 2020, a positive test for either the virus or the antibodies is ‎required. 

The WC Covid Legislation specifically states that COVID-19 losses shall not affect any ‎employer’s workers’ compensation insurance experience rating modification factors, which ‎otherwise could substantially increase the specific employer’s premiums. COVID-19 costs, ‎however, may be included in determining overall State loss costs, which will allow workers' ‎compensation insurers to ensure base rates are adequate in the future.   ‎

In many ways, this legislation is a success story and a testament to the civic process. Before the ‎legislation was enacted, the Illinois Workers’ Compensation Commission (the “Commission”) passed ‎a much broader administrative rule that lacked most of the safeguards and fairness present in the ‎current legislation. Several industry groups brought suit to challenge the Commission’s authority to ‎enact a substantive rule that was expected to impose costs of $1 billion and possibly much more. The ‎Circuit Court in Sangamon County granted a temporary restraining order to stop the Commission, ‎and the Commission subsequently repealed its administrative rule.‎

The task then went to the legislature to create a more balanced law. Both labor and business groups ‎participated in the creation of the WC Covid Legislation, and the bill passed both the House and ‎the Senate with near unanimous support. Although the WC Covid Legislation will still be costly for employers and workers’ compensation insurers, the impact is far less severe than it would have been if ‎the industry had not successfully challenged the Commission’s initial rule. For example, the repealed ‎rule would have paid healthy workers to quarantine and the WC Covid Legislation requires an actual ‎medical diagnosis. Indeed, the WC Covid Legislation requires a positive test for COVID-19 after June ‎‎15, 2020.‎

Similarly, the repealed rule did not outline how employers could rebut the presumption. Not only ‎did the legislature expressly identify means for employers to rebut the presumption in the WC Covid ‎Legislation, but the legislative history expressly states that the General Assembly intends the ‎presumption in the WC Covid Legislation to be interpreted the same way as the presumption in Johnston v. Illinois Workers’ Comp. Comm’n, 2017 IL App (2d) 160010WC. In Johnston, the employer of ‎an experienced fire fighter with coronary artery disease was able to rebut a similar statutory ‎presumption for front-line workers by presenting “some” contradictory evidence regarding whether ‎Mr. Johnston’s medical condition arose from the workplace. The explicit embrace of Johnston in the legislative history for the WC Covid Legislation suggests that employers will have a reasonable chance ‎of rebutting the presumption of compensability for COVID-19 under appropriate circumstances.‎

The National Council on Compensation Insurance has estimated that the most likely cost of the ‎WC Covid Legislation is about half of the most likely estimated cost of the enjoined and repealed ‎administrative rule. Thus, it appears that the engagement of all three branches of government and ‎major stakeholders resulted in broadly accepted legislation. Although the ultimate outcome will depend on the implementation of the WC Covid Legislation by the Commission, it appears as though ‎front-line workers are more likely to have compensable workers’ compensation claims arising from ‎COVID-19 exposure and employers and insurers will bear a more reasonable cost.‎

Visit our COVID-19 Resource Center often for up-to-date information to help you stay informed of the legal issues related to COVID-19.