How does workers' comp work in Illinois?

In 2011, Illinois embarked on legislative changes and reform demanded by employer and business interest groups. The key provision of the plan limited access to doctors who were not participating in a new approved medical fee plan. The result was less cost associated with medical treatment.

Currently the cost of medical treatment has reduced significantly (approximately 30%) and the frequency of claims is down nearly 40%. This information is proof that Illinois Reform is working. More insurance companies are moving back in to the state as a viable option for coverage.

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Workers' Comp Rules & Information for Illinois

Illinois Workers Compensation Commission

The Illinois Workers’ Compensation Commission is the State agency that administers the judicial process that resolves disputed workers’ compensation claims between employees and employers. The Commission acts as an administrative court system for these claims. As the administrative court system, the Commission must be impartial. Commission staff help explain procedures and basic provisions of the law to members of the public, but cannot provide legal advice or act as an advocate for either the employee or employer.

Workers' Comp Requirements for IL Employers

Employers are required to:

  • Purchase workers’ compensation insurance or obtain permission to self-insure from the Commission
  • Post a notice in the workplace. Employers can obtain this notice at
  • Keep records of work-related injuries and report to the Commission those accidents involving more than three lost workdays
  • Employers are prohibited from:

  • Charging the employee for any part of the workers’ compensation insurance premium or benefits
  • Harassing, discharging, refusing to rehire, or discriminating against an employee for exercising his or her rights under the Workers’ Compensation Act
  • Illinois Work Comp Penalties for Non-Compliance

    There are various provisions in the Workers’ Compensation Act that address this issue.

    Negligent failure to provide workers’ compensation insurance coverage is punishable by a Class A misdemeanor for each day without coverage (maximum 12 months imprisonment, $2,500 fine).

    Knowing failure to provide workers’ compensation insurance coverage is punishable by a Class 4 felony for each day without coverage (maximum 1-3 years imprisonment, $25,000 fine).

    An uninsured employer may also be subject to a civil penalty of $500 for every day it lacked insurance, with a minimum $10,000 fine.

    Employers without workers’ compensation insurance may be subject to a citation issued by the Insurance Compliance Division. The citation fine may range from $500 to $2,500.

    An uninsured employer loses the protections of the Workers’ Compensation Act for the period of noncompliance. That means an employee who was injured during the period of noncompliance may choose to sue in civil court.

    In addition, if the Commission finds that an employer knowingly failed to provide insurance coverage, it may issue a stop-work order and shut the company down until it obtains insurance.

    Qualifying for Workers' Comp Benefits

    In order for an Illinois employee to qualify for workers' comp benefits, they must prove each item below:

  • Jurisdiction: on the date of the accident, the employer was subject to the Illinois Workers' Compensation or Occupational Diseases Act
  • Employment: on the date of the accident, a relationship of employee and employer existed between the parties
  • Accident or exposure: the employee sustained accidental injuries or was exposed to an occupational disease that arose out of and in the course of employment
  • Causal connection: the medical condition was caused or aggravated by the alleged accident or exposure.
  • Notice: the employer received notice of the accident or exposure within the time limits set by law
  • When an employee prevails on these issues, he or she will generally qualify for some workers' comp benefits, but there may be other issues in dispute. For example, the parties may disagree over the extent of the employee’s disability, or the employee’s average weekly wage, or whether the medical treatments and bills were reasonable and necessary.

    State Insurance Directives Regarding Covid-19

    IL DOI “requests” insurers: 1) postpone or withdraw any previous cancellation/nonrenewal notice in which the cancellation/nonrenewal occurs on or after March 9, 2020; 2) postpone issuing any new cancellation/nonrenewal notices through at least April 30, 2020, but longer depending on policyholder’s circumstances; 3) continue coverage, even in cases on unpaid premium, through at least April 30, 2020; 4) postpone cancellation/nonrenewal hearings scheduled on or after April 3 to a date after April 30; 5) grant extension of at least 30 days for any policy provision that imposes a time limit for an insured or claimant to perform an act (e.g., submission of proof of loss; info reporting; bill submission); 6) provide at least 30 day extension for repairs; 7) extensions of coverage under this bulletin will not be considered to convert a fire policy to one subject to the 60-day nonrenewal notice requirement set forth under 215 ILCS 5/143.21.1.

    Discretionary order in effect from 04/03/2020 - further notice.

    State Orders Regarding Insurance Claims Related to Coronavirus

    In any proceeding before the WC Commission in which the petitioner is a first responder (police, firefighter, emergency medical technician, paramedic, health care provider, correctional officer) whose injury/occupational disease/period of incapacity is from exposure to COVID-19, the exposure will be rebuttably presumed to have arisen out of and in the course of employment and to be causally connected to the hazards/exposures of employment.

    Mandatory law in effect from 04/16/2020 until futher notice.

    Specialized Programs for Select Industries

    We work with our national insurance partners to develop targeted programs with easier underwriting requirements and lower rates. We offer a broad range of business class codes that help streamline the quote process so you get the lowest price for coverage.

    Knowing the Illinois workers comp requirements can help lower the cost of coverage.

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    Illinois Work Comp Information

    IWCC Responsibilities

    Workers' compensation is a no-fault system of benefits paid by IL employers to workers who experience work-related injuries or diseases.

    The Illinois Workers' Compensation Commission (IWCC) resolves disputes between employees and employers regarding work-related injuries and claims. A case is first tried by an arbitrator, whose decision may be reviewed by a panel of three commissioners. Cases may then be appealed to the circuit court, Appellate Court, and Illinois Supreme Court. Like most court systems, the vast majority of disputes are resolved by settlement.

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    Workers' Comp Includes Employers Liability Insurance?

    Employers liability insurance is an additional layer of coverage included as part of a workers' compensation insurance policy. Employers Liability is known as Part 2 of the policy. It adds two additional coverages for employers:

    Employers Legal Liability and Legal Defense Costs

    In today's world, there are a variety of reasons employees and third-parties sue employers for damages. Here a some common types covered by employers liability insurance:

    Third Party Lawsuits

    Your employee sues another party that may have contributed to the injury, In turn, the third party sues your business.

    Consequential Bodily Injury

    Another party or individual is injured while providing care for the injured employee.

    Dual Capacity Legal Action

    An employee files a claim but also attempts to sue the employer for being responsible in other ways outside of the employment relationship.

    Loss of Consortium

    A spouse sues for damages caused by the loss of companionship or relations.

    Employers Liability coverage is not included with coverage in the four monopolistic states. Employers in these states can endorse this coverage onto their General Liability policy. That coverage is commonly known as Stop Gap Coverage.

    Workers' Comp Covers IL Employers from Injury Related Expenses & Lawsuits
    Employers liability insurance is included under a workers' comp policy in most states.
    • Employers liability coverage is not included in all monopolistic states.
    • All NCCI and most other states' coverage includes employers liability insurance.
    Visit NCCI for more resources and information about workers' compensation class codes. Visit United States Department of Labor for more information about government agencies managing workers compensation insurance rates.

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