Recent work for several of our clients has reinforced the necessity of your making sure that all businesses, including medical practices that have employees maintain adequate workers compensation insurance.
Workers’ Compensation Insurance covers employees if they are injured while on the job. Doctors offices, home health agencies, social service agencies and similar health care businesses which employ persons (other than the owners and certain high level employees which may be exempt) have always been required to purchase this insurance. Payment for injuries covered under workers’ compensation insurance are determined according to a mandated state fee schedule, and claims are usually adjudicated by the Workers’ Compensation Commission (the “Commission”), not by the courts. Both the premium rate and the risk of such injuries are relatively low in the health care industry, but nonetheless the requirement to purchase adequate insurance (or join a self-insurance pool) is still mandatory.
An employer who fails to purchase workers’ compensation insurance risks significant penalties. There is a $500 per day penalty for each day without adequate workers’ compensation insurance. This can result in fines of hundreds of thousands of dollars even for a relatively small business with few employees (A company that does not have adequate insurance will be charged with any expenses an injured employee has). In addition, Illinois law provides a felony penalty for individuals who own or manage a company and who knowingly do not purchase adequate insurance. The financial penalties may be assessed not only on the company, but on the President and Secretary, and any other culpable officer. There is no minimum size for a business required to purchase insurance; any business of any size with any number of employees has to comply with the law.
Recent changes, both in the law (The Workers’ Compensation Act, 820 ILCS 305/1 et seq.) and in the office of a the Illinois Workers’ Compensation Commission that enforces the insurance requirements, have resulted in much more aggressive enforcement of the requirement that every employer in Illinois maintain workers’ compensation coverage. In addition, the creation of a national insurance database makes it easy for regulators to determine if a company has proper workers’ compensation insurance. Governor Blagojevich has hired an aggressive ex-prosecutor to run the Commission, who is targeting, for the first time, health care businesses. The Commission has recently begun proceedings against several home health care agencies discovered to be non-compliant and is looking at a range of medical and provider businesses in the health care industry.
