The Injured Workers’ Benefit Fund pays workers’ compensation benefits to Illinois workers whose employers have failed to provide insurance coverage as required by law and have failed to pay the benefits owed to them.
Uninsured Employers Subject to Penalties and Fines
Employers in Illinois are generally required to obtain insurance coverage to pay benefits under the Workers’ Compensation Act or otherwise guarantee their ability to pay benefits to the Illinois Workers’ Compensation Commission. 820 ILCS 305/4(a) Illinois General Assembly | IWCC PDF. Employers who fail to satisfy these requirements are subject to various penalties, including significant fines. The fines that are collected from uninsured employers are held in a special fund called the Injured Workers’ Benefit Fund (IWBF). 820 ILCS 305/4(d) Illinois General Assembly | IWCC PDF.
The IWBF is reserved to pay the workers’ compensation benefits of workers whose employers have failed to pay because of their lack of insurance. Unfortunately, these benefits cannot be paid as they accrue during the life of a claim. Rather, the injured worker is required to have their claim adjudicated by the Commission.
Arbitration of Claim Required
Unlike other claimants who can adjudicate their claims without a determination of permanent disability, IWBF claimants are only allowed one adjudication against the IWBF so they must wait until permanency can be established (such as when they have finished treatment and they are at maximum medical improvement). 820 ILCS 305/4(d) (“Payment from the Injured Workers’ Benefit Fund to an eligible claimant pursuant to this provision shall discharge the obligations of the Injured Workers’ Benefit Fund regarding the award entered by the Commission.”) Illinois General Assembly | IWCC PDF.
IWBF claimants must name the Illinois State Treasurer, who is the custodian of the fund, as a respondent in the case. At the arbitration hearing, the case is then defended by both the employer (if present at all) and the Illinois Attorney General’s Office, who represents the Treasurer.
If the IWBF claimant succeeds on their claim and obtains a final award from the Commission (following any appeals), the claimant has 90 days within receipt of the award to notify the Commission. The claimant can do this by filing the Injured Workers’ Benefit Fund: Request for Benefits and Affidavit form, which is available on the Commission’s website. IWCC PDF.
Annual Pro-Rata Distributions to All Eligible Claimants
The Act requires the Commission to direct disbursements from the IWBF once every fiscal year to each eligible claimant (those who have a final award and have notified the Commission). If there are insufficient funds to fully pay each IWBF claimant, the Commission makes pro-rata distributions based on all eligible claims in the fiscal year. For instance, in Fiscal Year 2014, the Commission was only able to pay each eligible claimant 79% of the total compensation they were awarded.
Entry of Judgment of Unpaid Commission Award
IWBF claimants can seek to enforce their workers’ compensation awards against uninsured employers in civil court, although collection may be difficult. 820 ILCS 305/19(g) Illinois General Assembly | IWCC PDF. The State of Illinois will also seek to collect the money paid out of the IWBF in civil court. Any money that the state is able to recover from the uninsured employer is returned to the IWBF.
Illinois State Treasurer v. Illinois Workers’ Compensation Commission, 2015 IL 117418 (Illinois State Treasurer, as ex-officio custodian of the Injured Workers’ Benefit Fund, is required to file an appeal bond to vest the courts with jurisdiction to review the Commission’s decision) Google Scholar | Illinois Courts PDF.
Dratewska-Zator v. Rutherford, 2013 IL App (1st) 122699 (entry of judgment under section 19(g) of the Workers’ Compensation Act against the Illinois State Treasurer, as ex-officio custodian of the Injured Workers’ Benefit Fund, for alleged failure to disburse funds properly under section 4(d) barred by the doctrine of sovereign immunity) Google Scholar | Illinois Courts PDF.