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HB5228 - 104th General Assembly

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HB5228 Enrolled
LRB104 20014 SPS 33465 b
1

AN ACT concerning employment.

2

Be it enacted by the People of the State of Illinois,
3
represented in the General Assembly:

4

Section 5.
The Illinois Insurance Code is amended by
5
changing Section 416 as follows:

6

(215 ILCS 5/416)
7

Sec. 416.
Illinois Workers' Compensation Commission
8
Operations Fund Surcharge.
9

(a) As of July 30, 2004 (the effective date of Public Act
10
93-840), every company licensed or authorized by the Illinois
11
Department of Insurance and insuring employers' liabilities
12
arising under the Workers' Compensation Act or the Workers'
13
Occupational Diseases Act shall remit to the Director a
14
surcharge based upon the annual direct written premium, as
15
reported under Section 136 of this Act, of the company in the
16
manner provided in this Section. Such proceeds shall be
17
deposited into the Illinois Workers' Compensation Commission
18
Operations Fund as established in the Workers' Compensation
19
Act. If a company survives or was formed by a merger,
20
consolidation, reorganization, or reincorporation, the direct
21
written premiums of all companies party to the merger,
22
consolidation, reorganization, or reincorporation shall, for
23
purposes of determining the amount of the fee imposed by this

HB5228 Enrolled
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LRB104 20014 SPS 33465 b
1
Section, be regarded as those of the surviving or new company.
2

(b) Beginning on July 30, 2004 (the effective date of
3
Public Act 93-840) and on July 1 of each year thereafter
4
through 2023, the Director shall charge an annual Illinois
5
Workers' Compensation Commission Operations Fund Surcharge
6
from every company subject to subsection (a) of this Section
7
equal to 1.01% of its direct written premium for insuring
8
employers' liabilities arising under the Workers' Compensation
9
Act or Workers' Occupational Diseases Act as reported in each
10
company's annual statement filed for the previous year as
11
required by Section 136. Within 15 days after June 5, 2024 (the
12
effective date of Public Act 103-590) and on July 1 of each
13
year thereafter, the Director shall charge an annual Illinois
14
Workers' Compensation Commission Operations Fund Surcharge
15
from every company subject to subsection (a) of this Section
16
equal to 1.092% of its direct written premium for insuring
17
employers' liabilities arising under the Workers' Compensation
18
Act or Workers' Occupational Diseases Act as reported in each
19
company's annual statement filed for the previous year as
20
required by Section 136. The Illinois Workers' Compensation
21
Commission Operations Fund Surcharge shall be collected by
22
companies subject to subsection (a) of this Section as a
23
separately stated surcharge on insured employers at the rate
24
of 1.092% of direct written premium for the surcharge due in
25
2024 and each year thereafter
, plus an additional amount
26
determined under subsection (b-5) beginning in 2026
. The

HB5228 Enrolled
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LRB104 20014 SPS 33465 b
1
Illinois Workers' Compensation Commission Operations Fund
2
Surcharge shall not be collected by companies subject to
3
subsection (a) of this Section from any employer that
4
self-insures its liabilities arising under the Workers'
5
Compensation Act or Workers' Occupational Diseases Act,
6
provided that the employer has paid the Illinois Workers'
7
Compensation Commission Operations Fund Fee pursuant to
8
Section 4d of the Workers' Compensation Act. All sums
9
collected by the Department of Insurance under the provisions
10
of this Section shall be paid promptly after the receipt of the
11
same, accompanied by a detailed statement thereof, into the
12
Illinois Workers' Compensation Commission Operations Fund in
13
the State treasury.
14

(b-5) As used in this subsection:
15

"Annual funding target for the year" means $7,000,000 for
16
2026 and, for each year thereafter, the previous year's annual
17
funding target increased by 3.5%.
18

"Statewide underwriting gain for the previous year" means
19
the sum of the underwriting gains for all companies that had an
20
underwriting gain for their workers' compensation and excess
21
workers' compensation lines in this State, as reported in the
22
companies' annual statements filed for the previous year under
23
Section 136.
24

"Underwriting gain" means, if the difference is a positive
25
dollar amount, the difference between direct earned premiums
26
and the sum of the following expenses and fees:

HB5228 Enrolled
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LRB104 20014 SPS 33465 b
1

(A) direct losses incurred;
2

(B) direct defense and cost containment expense
3

incurred;
4

(C) commission and brokerage expenses; and
5

(D) taxes, licenses, and fees.
6

On or before July 1, 2026 or 15 days after the effective
7
date of this amendatory Act of the 104th General Assembly,
8
whichever is later, and on or before July 1 of each year
9
thereafter, in addition to the amount required by subsections
10
(a) and (b), the Director shall charge an amount to be included
11
in a company's obligation to pay the annual Illinois Workers'
12
Compensation Commission Operations Fund Surcharge under this
13
Section. The additional amount shall be collected from every
14
company subject to subsection (a) that had an underwriting
15
gain for its workers' compensation and excess workers'
16
compensation lines in this State, as reported in the company's
17
annual statement filed for the previous year under Section
18
136. All provisions of this Section for the administration and
19
enforcement of the portion of the annual Illinois Workers'
20
Compensation Commission Operations Fund Surcharge described in
21
subsection (b) shall apply to the additional amount described
22
in this subsection.

23

The additional amount included in each company's surcharge
24
for a given year shall be a percentage of the company's
25
underwriting gain for its workers' compensation and excess
26
workers' compensation lines in this State, as reported in the

HB5228 Enrolled
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1
company's annual statement filed for the previous year under
2
Section 136. Each year's percentage shall be calculated as the
3
annual funding target for the year divided by the statewide
4
underwriting gain for the previous year multiplied by 100.
5

Before collecting the additional amount each year, the
6
Department shall publish a company bulletin demonstrating the
7
calculation of the percentage in accordance with this
8
subsection. The bulletin shall include or contain a hyperlink
9
to download the underlying data from the companies' annual
10
statements that the Department used to perform the
11
calculation.
12

The additional amount included in the surcharge shall be
13
deposited into the Illinois Workers' Compensation Commission
14
Operations Fund in accordance with the Workers' Compensation
15
Act. If a company survives or was formed by a merger,
16
consolidation, reorganization, or reincorporation, the
17
underwriting gain in this State for all companies that are
18
parties to the merger, consolidation, reorganization, or
19
reincorporation shall, for purposes of determining the
20
additional amount imposed by this subsection, be regarded as
21
those of the surviving or new company.
22

(c) In addition to the authority specifically granted
23
under Article XXV of this Code, the Director shall have such
24
authority to adopt rules or establish forms as may be
25
reasonably necessary for purposes of enforcing this Section.
26
The Director shall also have authority to defer, waive, or

HB5228 Enrolled
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LRB104 20014 SPS 33465 b
1
abate the surcharge or any penalties imposed by this Section
2
if in the Director's opinion the company's solvency and
3
ability to meet its insured obligations would be immediately
4
threatened by payment of the surcharge due.
5

(d) When a company fails to pay the full amount of any
6
annual Illinois Workers' Compensation Commission Operations
7
Fund Surcharge of $100 or more due under this Section, there
8
shall be added to the amount due as a penalty an amount equal
9
to 10% of the deficiency for each month or part of a month that
10
the deficiency remains unpaid.
11

(e) The Department of Insurance may enforce the collection
12
of any delinquent payment, penalty, or portion thereof by
13
legal action or in any other manner by which the collection of
14
debts due the State of Illinois may be enforced under the laws
15
of this State.
16

(f) Whenever it appears to the satisfaction of the
17
Director that a company has paid pursuant to this Act an
18
Illinois Workers' Compensation Commission Operations Fund
19
Surcharge in an amount in excess of the amount legally
20
collectable from the company, the Director shall issue a
21
credit memorandum for an amount equal to the amount of such
22
overpayment. A credit memorandum may be applied for the 2-year
23
period from the date of issuance, against the payment of any
24
amount due during that period under the surcharge imposed by
25
this Section or, subject to reasonable rule of the Department
26
of Insurance including requirement of notification, may be

HB5228 Enrolled
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LRB104 20014 SPS 33465 b
1
assigned to any other company subject to regulation under this
2
Act. Any application of credit memoranda after the period
3
provided for in this Section is void.
4

(g) Annually, the Governor may direct a transfer of up to
5
2% of all moneys collected under this Section to the Insurance
6
Financial Regulation Fund.
7
(Source: P.A. 103-590, eff. 6-5-24; 104-417, eff. 8-15-25.)

8

Section 10.
The Workers' Compensation Act is amended by
9
changing Sections 4, 7, 8.7, and 12 as follows:

10

(820 ILCS 305/4)

(from Ch. 48, par. 138.4)
11

(Text of Section from P.A. 101-40, 102-37, and 103-590)
12

Sec. 4.
(a) Any employer, including but not limited to
13
general contractors and their subcontractors, who shall come
14
within the provisions of Section 3 of this Act, and any other
15
employer who shall elect to provide and pay the compensation
16
provided for in this Act shall:
17

(1) File with the Commission annually an application
18

for approval as a self-insurer which shall include a
19

current financial statement, and annually, thereafter, an
20

application for renewal of self-insurance, which shall
21

include a current financial statement. Said application
22

and financial statement shall be signed and sworn to by
23

the president or vice president and secretary or assistant
24

secretary of the employer if it be a corporation, or by all

HB5228 Enrolled
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LRB104 20014 SPS 33465 b
1

of the partners, if it be a copartnership, or by the owner
2

if it be neither a copartnership nor a corporation. All
3

initial applications and all applications for renewal of
4

self-insurance must be submitted at least 60 days prior to
5

the requested effective date of self-insurance. An
6

employer may elect to provide and pay compensation as
7

provided for in this Act as a member of a group workers'
8

compensation pool under Article V 3/4 of the Illinois
9

Insurance Code. If an employer becomes a member of a group
10

workers' compensation pool, the employer shall not be
11

relieved of any obligations imposed by this Act.
12

If the sworn application and financial statement of
13

any such employer does not satisfy the Commission of the
14

financial ability of the employer who has filed it, the
15

Commission shall require such employer to,
16

(2) Furnish security, indemnity or a bond guaranteeing
17

the payment by the employer of the compensation provided
18

for in this Act, provided that any such employer whose
19

application and financial statement shall not have
20

satisfied the commission of his or her financial ability
21

and who shall have secured his liability in part by excess
22

liability insurance shall be required to furnish to the
23

Commission security, indemnity or bond guaranteeing his or
24

her payment up to the effective limits of the excess
25

coverage, or
26

(3) Insure his entire liability to pay such

HB5228 Enrolled
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LRB104 20014 SPS 33465 b
1

compensation in some insurance carrier authorized,
2

licensed, or permitted to do such insurance business in
3

this State. Every policy of an insurance carrier, insuring
4

the payment of compensation under this Act shall cover all
5

the employees and the entire compensation liability of the
6

insured: Provided, however, that any employer may insure
7

his or her compensation liability with 2 or more insurance
8

carriers or may insure a part and qualify under subsection
9

1, 2, or 4 for the remainder of his or her liability to pay
10

such compensation, subject to the following two
11

provisions:
12

Firstly, the entire compensation liability of the
13

employer to employees working at or from one location
14

shall be insured in one such insurance carrier or
15

shall be self-insured, and
16

Secondly, the employer shall submit evidence
17

satisfactorily to the Commission that his or her
18

entire liability for the compensation provided for in
19

this Act will be secured. Any provisions in any
20

policy, or in any endorsement attached thereto,
21

attempting to limit or modify in any way, the
22

liability of the insurance carriers issuing the same
23

except as otherwise provided herein shall be wholly
24

void.
25

Nothing herein contained shall apply to policies of
26

excess liability carriage secured by employers who have

HB5228 Enrolled
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LRB104 20014 SPS 33465 b
1

been approved by the Commission as self-insurers, or
2

(4) Make some other provision, satisfactory to the
3

Commission, for the securing of the payment of
4

compensation provided for in this Act, and
5

(5) Upon becoming subject to this Act and thereafter
6

as often as the Commission may in writing demand, file
7

with the Commission in form prescribed by it evidence of
8

his or her compliance with the provision of this Section.
9

(a-1) Regardless of its state of domicile or its principal
10
place of business, an employer shall make payments to its
11
insurance carrier or group self-insurance fund, where
12
applicable, based upon the premium rates of the situs where
13
the work or project is located in Illinois if:
14

(A) the employer is engaged primarily in the building
15

and construction industry; and
16

(B) subdivision (a)(3) of this Section applies to the
17

employer or the employer is a member of a group
18

self-insurance plan as defined in subsection (1) of
19

Section 4a.
20

The Illinois Workers' Compensation Commission shall impose
21
a penalty upon an employer for violation of this subsection
22
(a-1) if:
23

(i) the employer is given an opportunity at a hearing
24

to present evidence of its compliance with this subsection
25

(a-1); and
26

(ii) after the hearing, the Commission finds that the

HB5228 Enrolled
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LRB104 20014 SPS 33465 b
1

employer failed to make payments upon the premium rates of
2

the situs where the work or project is located in
3

Illinois.
4

The penalty shall not exceed $1,000 for each day of work
5
for which the employer failed to make payments upon the
6
premium rates of the situs where the work or project is located
7
in Illinois, but the total penalty shall not exceed $50,000
8
for each project or each contract under which the work was
9
performed.
10

Any penalty under this subsection (a-1) must be imposed
11
not later than one year after the expiration of the applicable
12
limitation period specified in subsection (d) of Section 6 of
13
this Act. Penalties imposed under this subsection (a-1) shall
14
be deposited into the Illinois Workers' Compensation
15
Commission Operations Fund, a special fund that is created in
16
the State treasury. Subject to appropriation, moneys in the
17
Fund shall be used solely for the operations of the Illinois
18
Workers' Compensation Commission, the salaries and benefits of
19
the Self-Insurers Advisory Board employees, the operating
20
costs of the Self-Insurers Advisory Board, and by the
21
Department of Insurance for the purposes authorized in
22
subsection (c) of Section 25.5 of this Act.
23

(a-2) Every Employee Leasing Company (ELC), as defined in
24
Section 15 of the Employee Leasing Company Act, shall at a
25
minimum provide the following information to the Commission or
26
any entity designated by the Commission regarding each

HB5228 Enrolled
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LRB104 20014 SPS 33465 b
1
workers' compensation insurance policy issued to the ELC:
2

(1) Any client company of the ELC listed as an
3

additional named insured.
4

(2) Any informational schedule attached to the master
5

policy that identifies any individual client company's
6

name, FEIN, and job location.
7

(3) Any certificate of insurance coverage document
8

issued to a client company specifying its rights and
9

obligations under the master policy that establishes both
10

the identity and status of the client, as well as the dates
11

of inception and termination of coverage, if applicable.
12

(a-3) Any corporation, limited liability company, or
13
partnership engaged in activities requiring licensure by a
14
State agency, for which proof that it has insured its workers'
15
compensation liability is a requirement for licensure, that
16
fails to satisfy a requirement outlined in paragraph (1), (2),
17
(3), or (4) of subsection (a) shall be subject to civil
18
penalties under subsection (d) unless it shows by clear and
19
convincing evidence that it was not operating during the time
20
its license was active.

21

(b) The sworn application and financial statement, or
22
security, indemnity or bond, or amount of insurance, or other
23
provisions, filed, furnished, carried, or made by the
24
employer, as the case may be, shall be subject to the approval
25
of the Commission.
26

Deposits under escrow agreements shall be cash, negotiable

HB5228 Enrolled
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LRB104 20014 SPS 33465 b
1
United States government bonds or negotiable general
2
obligation bonds of the State of Illinois. Such cash or bonds
3
shall be deposited in escrow with any State or National Bank or
4
Trust Company having trust authority in the State of Illinois.
5

Upon the approval of the sworn application and financial
6
statement, security, indemnity or bond or amount of insurance,
7
filed, furnished or carried, as the case may be, the
8
Commission shall send to the employer written notice of its
9
approval thereof. The certificate of compliance by the
10
employer with the provisions of subparagraphs (2) and (3) of
11
paragraph (a) of this Section shall be delivered by the
12
insurance carrier to the Illinois Workers' Compensation
13
Commission within five days after the effective date of the
14
policy so certified. The insurance so certified shall cover
15
all compensation liability occurring during the time that the
16
insurance is in effect and no further certificate need be
17
filed in case such insurance is renewed, extended or otherwise
18
continued by such carrier. The insurance so certified shall
19
not be cancelled or in the event that such insurance is not
20
renewed, extended or otherwise continued, such insurance shall
21
not be terminated until at least 10 days after receipt by the
22
Illinois Workers' Compensation Commission of notice of the
23
cancellation or termination of said insurance; provided,
24
however, that if the employer has secured insurance from
25
another insurance carrier, or has otherwise secured the
26
payment of compensation in accordance with this Section, and

HB5228 Enrolled
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LRB104 20014 SPS 33465 b
1
such insurance or other security becomes effective prior to
2
the expiration of the 10 days, cancellation or termination
3
may, at the option of the insurance carrier indicated in such
4
notice, be effective as of the effective date of such other
5
insurance or security.
6

(c) Whenever the Commission shall find that any
7
corporation, company, association, aggregation of individuals,
8
reciprocal or interinsurers exchange, or other insurer
9
effecting workers' compensation insurance in this State shall
10
be insolvent, financially unsound, or unable to fully meet all
11
payments and liabilities assumed or to be assumed for
12
compensation insurance in this State, or shall practice a
13
policy of delay or unfairness toward employees in the
14
adjustment, settlement, or payment of benefits due such
15
employees, the Commission may after reasonable notice and
16
hearing order and direct that such corporation, company,
17
association, aggregation of individuals, reciprocal or
18
interinsurers exchange, or insurer, shall from and after a
19
date fixed in such order discontinue the writing of any such
20
workers' compensation insurance in this State. Subject to such
21
modification of the order as the Commission may later make on
22
review of the order, as herein provided, it shall thereupon be
23
unlawful for any such corporation, company, association,
24
aggregation of individuals, reciprocal or interinsurers
25
exchange, or insurer to effect any workers' compensation
26
insurance in this State. A copy of the order shall be served

HB5228 Enrolled
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LRB104 20014 SPS 33465 b
1
upon the Director of Insurance by registered mail. Whenever
2
the Commission finds that any service or adjustment company
3
used or employed by a self-insured employer or by an insurance
4
carrier to process, adjust, investigate, compromise or
5
otherwise handle claims under this Act, has practiced or is
6
practicing a policy of delay or unfairness toward employees in
7
the adjustment, settlement or payment of benefits due such
8
employees, the Commission may after reasonable notice and
9
hearing order and direct that such service or adjustment
10
company shall from and after a date fixed in such order be
11
prohibited from processing, adjusting, investigating,
12
compromising or otherwise handling claims under this Act.
13

Whenever the Commission finds that any self-insured
14
employer has practiced or is practicing delay or unfairness
15
toward employees in the adjustment, settlement or payment of
16
benefits due such employees, the Commission may, after
17
reasonable notice and hearing, order and direct that after a
18
date fixed in the order such self-insured employer shall be
19
disqualified to operate as a self-insurer and shall be
20
required to insure his entire liability to pay compensation in
21
some insurance carrier authorized, licensed and permitted to
22
do such insurance business in this State, as provided in
23
subparagraph 3 of paragraph (a) of this Section.
24

All orders made by the Commission under this Section shall
25
be subject to review by the courts, said review to be taken in
26
the same manner and within the same time as provided by Section

HB5228 Enrolled
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LRB104 20014 SPS 33465 b
1
19 of this Act for review of awards and decisions of the
2
Commission, upon the party seeking the review filing with the
3
clerk of the court to which said review is taken a bond in an
4
amount to be fixed and approved by the court to which the
5
review is taken, conditioned upon the payment of all
6
compensation awarded against the person taking said review
7
pending a decision thereof and further conditioned upon such
8
other obligations as the court may impose. Upon the review the
9
Circuit Court shall have power to review all questions of fact
10
as well as of law. The penalty hereinafter provided for in this
11
paragraph shall not attach and shall not begin to run until the
12
final determination of the order of the Commission.
13

(d) Whenever a Commissioner, with due process and after a
14
hearing, determines an employer has knowingly failed to
15
provide coverage as required by paragraph (a) of this Section,
16
the failure shall be deemed an immediate serious danger to
17
public health, safety, and welfare sufficient to justify
18
service by the Commission of a work-stop order on such
19
employer, requiring the cessation of all business operations
20
of such employer at the place of employment or job site. If a
21
business is declared to be extra hazardous, as defined in
22
Section 3, a Commissioner may issue an emergency work-stop
23
order on such an employer ex parte, prior to holding a hearing,
24
requiring the cessation of all business operations of such
25
employer at the place of employment or job site while awaiting
26
the ruling of the Commission. Whenever a Commissioner issues

HB5228 Enrolled
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LRB104 20014 SPS 33465 b
1
an emergency work-stop order, the Commission shall issue a
2
notice of emergency work-stop hearing to be posted at the
3
employer's places of employment and job sites. Any law
4
enforcement agency in the State shall, at the request of the
5
Commission, render any assistance necessary to carry out the
6
provisions of this Section, including, but not limited to,
7
preventing any employee of such employer from remaining at a
8
place of employment or job site after a work-stop order has
9
taken effect. Any work-stop order shall be lifted upon proof
10
of insurance as required by this Act. Any orders under this
11
Section are appealable under Section 19(f) to the Circuit
12
Court.
13

Any individual employer, corporate officer or director of
14
a corporate employer, partner of an employer partnership, or
15
member of an employer limited liability company who knowingly
16
fails to provide coverage as required by paragraph (a) of this
17
Section is guilty of a Class 4 felony. This provision shall not
18
apply to any corporate officer or director of any
19
publicly-owned corporation. Each day's violation constitutes a
20
separate offense. The State's Attorney of the county in which
21
the violation occurred, or the Attorney General, shall bring
22
such actions in the name of the People of the State of
23
Illinois, or may, in addition to other remedies provided in
24
this Section, bring an action for an injunction to restrain
25
the violation or to enjoin the operation of any such employer.
26

Any individual employer, corporate officer or director of

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1
a corporate employer, partner of an employer partnership, or
2
member of an employer limited liability company who
3
negligently fails to provide coverage as required by paragraph
4
(a) of this Section is guilty of a Class A misdemeanor. This
5
provision shall not apply to any corporate officer or director
6
of any publicly-owned corporation. Each day's violation
7
constitutes a separate offense. The State's Attorney of the
8
county in which the violation occurred, or the Attorney
9
General, shall bring such actions in the name of the People of
10
the State of Illinois.
11

The criminal penalties in this subsection (d) shall not
12
apply where there exists a good faith dispute as to the
13
existence of an employment relationship. Evidence of good
14
faith shall include, but not be limited to, compliance with
15
the definition of employee as used by the Internal Revenue
16
Service.
17

All investigative actions must be acted upon within 90
18
days of the issuance of the complaint. Employers who are
19
subject to and who knowingly fail to comply with this Section
20
shall not be entitled to the benefits of this Act during the
21
period of noncompliance, but shall be liable in an action
22
under any other applicable law of this State. In the action,
23
such employer shall not avail himself or herself of the
24
defenses of assumption of risk or negligence or that the
25
injury was due to a co-employee. In the action, proof of the
26
injury shall constitute prima facie evidence of negligence on

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1
the part of such employer and the burden shall be on such
2
employer to show freedom of negligence resulting in the
3
injury. The employer shall not join any other defendant in any
4
such civil action. Nothing in this amendatory Act of the 94th
5
General Assembly shall affect the employee's rights under
6
subdivision (a)3 of Section 1 of this Act. Any employer or
7
carrier who makes payments under subdivision (a)3 of Section 1
8
of this Act shall have a right of reimbursement from the
9
proceeds of any recovery under this Section.
10

An employee of an uninsured employer, or the employee's
11
dependents in case death ensued, may, instead of proceeding
12
against the employer in a civil action in court, file an
13
application for adjustment of claim with the Commission in
14
accordance with the provisions of this Act and the Commission
15
shall hear and determine the application for adjustment of
16
claim in the manner in which other claims are heard and
17
determined before the Commission.
18

All proceedings under this subsection (d) shall be
19
reported on an annual basis to the Workers' Compensation
20
Advisory Board.
21

An investigator with the Department of Insurance may issue
22
a citation to any employer that is not in compliance with its
23
obligation to have workers' compensation insurance under this
24
Act. The amount of the fine shall be based on the period of
25
time the employer was in non-compliance, but shall be no less
26
than $500, and shall not exceed $10,000. An employer that has

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1
been issued a citation shall pay the fine to the Department of
2
Insurance and provide to the Department of Insurance proof
3
that it obtained the required workers' compensation insurance
4
within 10 days after the citation was issued. This Section
5
does not affect any other obligations this Act imposes on
6
employers.
7

Upon a finding by the Commission, after reasonable notice
8
and hearing, of the knowing and willful failure or refusal of
9
an employer to comply with any of the provisions of paragraph
10
(a) of this Section, the failure or refusal of an employer,
11
service or adjustment company, or an insurance carrier to
12
comply with any order of the Illinois Workers' Compensation
13
Commission pursuant to paragraph (c) of this Section
14
disqualifying him or her to operate as a self insurer and
15
requiring him or her to insure his or her liability, or the
16
knowing and willful failure of an employer to comply with a
17
citation issued by an investigator with the Department of
18
Insurance, the Commission may assess a civil penalty of up to
19
$500 per day for each day of such failure or refusal after the
20
effective date of this amendatory Act of 1989. The minimum
21
penalty under this Section shall be the sum of $10,000. Each
22
day of such failure or refusal shall constitute a separate
23
offense. The Commission may assess the civil penalty
24
personally and individually against the corporate officers and
25
directors of a corporate employer, the partners of an employer
26
partnership, and the members of an employer limited liability

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1
company, after a finding of a knowing and willful refusal or
2
failure of each such named corporate officer, director,
3
partner, or member to comply with this Section. The liability
4
for the assessed penalty shall be against the named employer
5
first, and if the named employer fails or refuses to pay the
6
penalty to the Commission within 30 days after the final order
7
of the Commission, then the named corporate officers,
8
directors, partners, or members who have been found to have
9
knowingly and willfully refused or failed to comply with this
10
Section shall be liable for the unpaid penalty or any unpaid
11
portion of the penalty. Upon investigation by the Department
12
of Insurance, the Attorney General shall have the authority to
13
prosecute all proceedings to enforce the civil and
14
administrative provisions of this Section before the
15
Commission. The Commission and the Department of Insurance
16
shall promulgate procedural rules for enforcing this Section
17
relating to their respective duties prescribed herein.
18

If an employer is found to be in non-compliance with any
19
provisions of paragraph (a) of this Section more than once,
20
all minimum penalties will double. Therefore, upon the failure
21
or refusal of an employer, service or adjustment company, or
22
insurance carrier to comply with any order of the Commission
23
pursuant to paragraph (c) of this Section disqualifying him or
24
her to operate as a self-insurer and requiring him or her to
25
insure his or her liability, or the knowing and willful
26
failure of an employer to comply with a citation issued by an

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1
investigator with the Department of Insurance, the Commission
2
may assess a civil penalty of up to $1,000 per day for each day
3
of such failure or refusal after the effective date of this
4
amendatory Act of the 101st General Assembly. The minimum
5
penalty under this Section shall be the sum of $20,000. In
6
addition, employers with 2 or more violations of any
7
provisions of paragraph (a) of this Section may not
8
self-insure for one year or until all penalties are paid.
9

A Commission decision imposing penalties under this
10
Section may be judicially reviewed only as described in
11
Section 19(f). After expiration of the period for seeking
12
judicial review, the Commission's final decision imposing
13
penalties may be enforced in the same manner as a judgment
14
entered by a court of competent jurisdiction. The Commission's
15
final decision imposing penalties is a debt due and owing to
16
the State and can be enforced to the same extent as a judgment
17
entered by a circuit court. The Attorney General shall
18
represent the Commission and the Department of Insurance in
19
any action challenging the final decision in circuit court. If
20
the court affirms the Commission's decision, the court shall
21
enter judgment against the employer in the amount of the fines
22
assessed by the Commission. The Attorney General shall make
23
reasonable efforts to collect the amounts due under the
24
Commission's decision.
25

Any individual employer, corporate officer or director of
26
a corporate employer, partner of an employer partnership, or

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1
member of an employer limited liability company who, with the
2
intent to avoid payment of compensation under this Act to an
3
injured employee or the employee's dependents, knowingly
4
transfers, sells, encumbers, assigns, or in any manner
5
disposes of, conceals, secretes, or destroys any property
6
belonging to the employer, officer, director, partner, or
7
member is guilty of a Class 4 felony.
8

Penalties and fines collected pursuant to this paragraph
9
(d) shall be deposited upon receipt into a special fund which
10
shall be designated the Injured Workers' Benefit Fund, of
11
which the State Treasurer is ex-officio custodian, such
12
special fund to be held and disbursed in accordance with this
13
paragraph (d) for the purposes hereinafter stated in this
14
paragraph (d), upon the final order of the Commission. The
15
Injured Workers' Benefit Fund shall be deposited the same as
16
are State funds and any interest accruing thereon shall be
17
added thereto every 6 months. The Injured Workers' Benefit
18
Fund is subject to audit the same as State funds and accounts
19
and is protected by the general bond given by the State
20
Treasurer. The Injured Workers' Benefit Fund is considered
21
always appropriated for the purposes of disbursements as
22
provided in this paragraph, and shall be paid out and
23
disbursed as herein provided and shall not at any time be
24
appropriated or diverted to any other use or purpose. Moneys
25
in the Injured Workers' Benefit Fund shall be used only for
26
payment of workers' compensation benefits for injured

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1
employees when the employer has failed to provide coverage as
2
determined under this paragraph (d) and has failed to pay the
3
benefits due to the injured employee. The employer shall
4
reimburse the Injured Workers' Benefit Fund for any amounts
5
paid to an employee on account of the compensation awarded by
6
the Commission. The Attorney General shall make reasonable
7
efforts to obtain reimbursement for the Injured Workers'
8
Benefit Fund.
9

Any such amounts obtained shall be deposited by the
10
Commission into the Injured Workers' Benefit Fund. If an
11
injured employee or his or her personal representative
12
receives payment from the Injured Workers' Benefit Fund, the
13
State of Illinois has the same rights under paragraph (b) of
14
Section 5 that the employer who failed to pay the benefits due
15
to the injured employee would have had if the employer had paid
16
those benefits, and any moneys recovered by the State as a
17
result of the State's exercise of its rights under paragraph
18
(b) of Section 5 shall be deposited into the Injured Workers'
19
Benefit Fund. The custodian of the Injured Workers' Benefit
20
Fund shall be joined with the employer as a party respondent in
21
the application for adjustment of claim. After July 1, 2006,
22
the Commission shall make disbursements from the Fund once
23
each year to each eligible claimant. An eligible claimant is
24
an injured worker who has within the previous fiscal year
25
obtained a final award for benefits from the Commission
26
against the employer and the Injured Workers' Benefit Fund and

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1
has notified the Commission within 90 days of receipt of such
2
award. Within a reasonable time after the end of each fiscal
3
year, the Commission shall make a disbursement to each
4
eligible claimant. At the time of disbursement, if there are
5
insufficient moneys in the Fund to pay all claims, each
6
eligible claimant shall receive a pro-rata share, as
7
determined by the Commission, of the available moneys in the
8
Fund for that year. Payment from the Injured Workers' Benefit
9
Fund to an eligible claimant pursuant to this provision shall
10
discharge the obligations of the Injured Workers' Benefit Fund
11
regarding the award entered by the Commission.
12

(e) This Act shall not affect or disturb the continuance
13
of any existing insurance, mutual aid, benefit, or relief
14
association or department, whether maintained in whole or in
15
part by the employer or whether maintained by the employees,
16
the payment of benefits of such association or department
17
being guaranteed by the employer or by some person, firm or
18
corporation for him or her: Provided, the employer contributes
19
to such association or department an amount not less than the
20
full compensation herein provided, exclusive of the cost of
21
the maintenance of such association or department and without
22
any expense to the employee. This Act shall not prevent the
23
organization and maintaining under the insurance laws of this
24
State of any benefit or insurance company for the purpose of
25
insuring against the compensation provided for in this Act,
26
the expense of which is maintained by the employer. This Act

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1
shall not prevent the organization or maintaining under the
2
insurance laws of this State of any voluntary mutual aid,
3
benefit or relief association among employees for the payment
4
of additional accident or sick benefits.
5

(f) No existing insurance, mutual aid, benefit or relief
6
association or department shall, by reason of anything herein
7
contained, be authorized to discontinue its operation without
8
first discharging its obligations to any and all persons
9
carrying insurance in the same or entitled to relief or
10
benefits therein.
11

(g) Any contract, oral, written or implied, of employment
12
providing for relief benefit, or insurance or any other device
13
whereby the employee is required to pay any premium or
14
premiums for insurance against the compensation provided for
15
in this Act shall be null and void. Any employer withholding
16
from the wages of any employee any amount for the purpose of
17
paying any such premium shall be guilty of a Class B
18
misdemeanor.
19

In the event the employer does not pay the compensation
20
for which he or she is liable, then an insurance company,
21
association or insurer which may have insured such employer
22
against such liability shall become primarily liable to pay to
23
the employee, his or her personal representative or
24
beneficiary the compensation required by the provisions of
25
this Act to be paid by such employer. The insurance carrier may
26
be made a party to the proceedings in which the employer is a

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1
party and an award may be entered jointly against the employer
2
and the insurance carrier.
3

(h) It shall be unlawful for any employer, insurance
4
company or service or adjustment company to interfere with,
5
restrain or coerce an employee in any manner whatsoever in the
6
exercise of the rights or remedies granted to him or her by
7
this Act or to discriminate, attempt to discriminate, or
8
threaten to discriminate against an employee in any way
9
because of his or her exercise of the rights or remedies
10
granted to him or her by this Act.
11

It shall be unlawful for any employer, individually or
12
through any insurance company or service or adjustment
13
company, to discharge or to threaten to discharge, or to
14
refuse to rehire or recall to active service in a suitable
15
capacity an employee because of the exercise of his or her
16
rights or remedies granted to him or her by this Act.
17

(i) If an employer elects to obtain a life insurance
18
policy on his employees, he may also elect to apply such
19
benefits in satisfaction of all or a portion of the death
20
benefits payable under this Act, in which case, the employer's
21
compensation premium shall be reduced accordingly.
22

(j) Within 45 days of receipt of an initial application or
23
application to renew self-insurance privileges the
24
Self-Insurers Advisory Board shall review and submit for
25
approval by the Chairman of the Commission recommendations of
26
disposition of all initial applications to self-insure and all

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1
applications to renew self-insurance privileges filed by
2
private self-insurers pursuant to the provisions of this
3
Section and Section 4a-9 of this Act. Each private
4
self-insurer shall submit with its initial and renewal
5
applications the application fee required by Section 4a-4 of
6
this Act.
7

The Chairman of the Commission shall promptly act upon all
8
initial applications and applications for renewal in full
9
accordance with the recommendations of the Board or, should
10
the Chairman disagree with any recommendation of disposition
11
of the Self-Insurer's Advisory Board, he shall within 30 days
12
of receipt of such recommendation provide to the Board in
13
writing the reasons supporting his decision. The Chairman
14
shall also promptly notify the employer of his decision within
15
15 days of receipt of the recommendation of the Board.
16

If an employer is denied a renewal of self-insurance
17
privileges pursuant to application it shall retain said
18
privilege for 120 days after receipt of a notice of
19
cancellation of the privilege from the Chairman of the
20
Commission.
21

All orders made by the Chairman under this Section shall
22
be subject to review by the courts, such review to be taken in
23
the same manner and within the same time as provided by
24
subsection (f) of Section 19 of this Act for review of awards
25
and decisions of the Commission, upon the party seeking the
26
review filing with the clerk of the court to which such review

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1
is taken a bond in an amount to be fixed and approved by the
2
court to which the review is taken, conditioned upon the
3
payment of all compensation awarded against the person taking
4
such review pending a decision thereof and further conditioned
5
upon such other obligations as the court may impose. Upon the
6
review the Circuit Court shall have power to review all
7
questions of fact as well as of law.
8
(Source: P.A. 101-40, eff. 1-1-20; 102-37, eff. 7-1-21;
9
103-590, eff. 6-5-24..)

10

(Text of Section from P.A. 101-384, 102-37, and 103-590)
11

Sec. 4.
(a) Any employer, including but not limited to
12
general contractors and their subcontractors, who shall come
13
within the provisions of Section 3 of this Act, and any other
14
employer who shall elect to provide and pay the compensation
15
provided for in this Act shall:
16

(1) File with the Commission annually an application
17

for approval as a self-insurer which shall include a
18

current financial statement, and annually, thereafter, an
19

application for renewal of self-insurance, which shall
20

include a current financial statement. Said application
21

and financial statement shall be signed and sworn to by
22

the president or vice president and secretary or assistant
23

secretary of the employer if it be a corporation, or by all
24

of the partners, if it be a copartnership, or by the owner
25

if it be neither a copartnership nor a corporation. All

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1

initial applications and all applications for renewal of
2

self-insurance must be submitted at least 60 days prior to
3

the requested effective date of self-insurance. An
4

employer may elect to provide and pay compensation as
5

provided for in this Act as a member of a group workers'
6

compensation pool under Article V 3/4 of the Illinois
7

Insurance Code. If an employer becomes a member of a group
8

workers' compensation pool, the employer shall not be
9

relieved of any obligations imposed by this Act.
10

If the sworn application and financial statement of
11

any such employer does not satisfy the Commission of the
12

financial ability of the employer who has filed it, the
13

Commission shall require such employer to,
14

(2) Furnish security, indemnity or a bond guaranteeing
15

the payment by the employer of the compensation provided
16

for in this Act, provided that any such employer whose
17

application and financial statement shall not have
18

satisfied the commission of his or her financial ability
19

and who shall have secured his liability in part by excess
20

liability insurance shall be required to furnish to the
21

Commission security, indemnity or bond guaranteeing his or
22

her payment up to the effective limits of the excess
23

coverage, or
24

(3) Insure his entire liability to pay such
25

compensation in some insurance carrier authorized,
26

licensed, or permitted to do such insurance business in

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1

this State. Every policy of an insurance carrier, insuring
2

the payment of compensation under this Act shall cover all
3

the employees and the entire compensation liability of the
4

insured: Provided, however, that any employer may insure
5

his or her compensation liability with 2 or more insurance
6

carriers or may insure a part and qualify under subsection
7

1, 2, or 4 for the remainder of his or her liability to pay
8

such compensation, subject to the following two
9

provisions:
10

Firstly, the entire compensation liability of the
11

employer to employees working at or from one location
12

shall be insured in one such insurance carrier or
13

shall be self-insured, and
14

Secondly, the employer shall submit evidence
15

satisfactorily to the Commission that his or her
16

entire liability for the compensation provided for in
17

this Act will be secured. Any provisions in any
18

policy, or in any endorsement attached thereto,
19

attempting to limit or modify in any way, the
20

liability of the insurance carriers issuing the same
21

except as otherwise provided herein shall be wholly
22

void.
23

Nothing herein contained shall apply to policies of
24

excess liability carriage secured by employers who have
25

been approved by the Commission as self-insurers, or
26

(4) Make some other provision, satisfactory to the

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1

Commission, for the securing of the payment of
2

compensation provided for in this Act, and
3

(5) Upon becoming subject to this Act and thereafter
4

as often as the Commission may in writing demand, file
5

with the Commission in form prescribed by it evidence of
6

his or her compliance with the provision of this Section.
7

(a-1) Regardless of its state of domicile or its principal
8
place of business, an employer shall make payments to its
9
insurance carrier or group self-insurance fund, where
10
applicable, based upon the premium rates of the situs where
11
the work or project is located in Illinois if:
12

(A) the employer is engaged primarily in the building
13

and construction industry; and
14

(B) subdivision (a)(3) of this Section applies to the
15

employer or the employer is a member of a group
16

self-insurance plan as defined in subsection (1) of
17

Section 4a.
18

The Illinois Workers' Compensation Commission shall impose
19
a penalty upon an employer for violation of this subsection
20
(a-1) if:
21

(i) the employer is given an opportunity at a hearing
22

to present evidence of its compliance with this subsection
23

(a-1); and
24

(ii) after the hearing, the Commission finds that the
25

employer failed to make payments upon the premium rates of
26

the situs where the work or project is located in

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1

Illinois.
2

The penalty shall not exceed $1,000 for each day of work
3
for which the employer failed to make payments upon the
4
premium rates of the situs where the work or project is located
5
in Illinois, but the total penalty shall not exceed $50,000
6
for each project or each contract under which the work was
7
performed.
8

Any penalty under this subsection (a-1) must be imposed
9
not later than one year after the expiration of the applicable
10
limitation period specified in subsection (d) of Section 6 of
11
this Act. Penalties imposed under this subsection (a-1) shall
12
be deposited into the Illinois Workers' Compensation
13
Commission Operations Fund, a special fund that is created in
14
the State treasury. Subject to appropriation, moneys in the
15
Fund shall be used solely for the operations of the Illinois
16
Workers' Compensation Commission and by the Department of
17
Insurance for the purposes authorized in subsection (c) of
18
Section 25.5 of this Act.
19

(a-2) Every Employee Leasing Company (ELC), as defined in
20
Section 15 of the Employee Leasing Company Act, shall at a
21
minimum provide the following information to the Commission or
22
any entity designated by the Commission regarding each
23
workers' compensation insurance policy issued to the ELC:
24

(1) Any client company of the ELC listed as an
25

additional named insured.
26

(2) Any informational schedule attached to the master

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1

policy that identifies any individual client company's
2

name, FEIN, and job location.
3

(3) Any certificate of insurance coverage document
4

issued to a client company specifying its rights and
5

obligations under the master policy that establishes both
6

the identity and status of the client, as well as the dates
7

of inception and termination of coverage, if applicable.
8

(a-3) Any corporation, limited liability company, or
9
partnership engaged in activities requiring licensure by a
10
State agency, for which proof that it has insured its workers'
11
compensation liability is a requirement for licensure, that
12
fails to satisfy a requirement outlined in paragraph (1), (2),
13
(3), or (4) of subsection (a) shall be subject to civil
14
penalties under subsection (d) unless it shows by clear and
15
convincing evidence that it was not operating during the time
16
its license was active.

17

(b) The sworn application and financial statement, or
18
security, indemnity or bond, or amount of insurance, or other
19
provisions, filed, furnished, carried, or made by the
20
employer, as the case may be, shall be subject to the approval
21
of the Commission.
22

Deposits under escrow agreements shall be cash, negotiable
23
United States government bonds or negotiable general
24
obligation bonds of the State of Illinois. Such cash or bonds
25
shall be deposited in escrow with any State or National Bank or
26
Trust Company having trust authority in the State of Illinois.

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1

Upon the approval of the sworn application and financial
2
statement, security, indemnity or bond or amount of insurance,
3
filed, furnished or carried, as the case may be, the
4
Commission shall send to the employer written notice of its
5
approval thereof. The certificate of compliance by the
6
employer with the provisions of subparagraphs (2) and (3) of
7
paragraph (a) of this Section shall be delivered by the
8
insurance carrier to the Illinois Workers' Compensation
9
Commission within five days after the effective date of the
10
policy so certified. The insurance so certified shall cover
11
all compensation liability occurring during the time that the
12
insurance is in effect and no further certificate need be
13
filed in case such insurance is renewed, extended or otherwise
14
continued by such carrier. The insurance so certified shall
15
not be cancelled or in the event that such insurance is not
16
renewed, extended or otherwise continued, such insurance shall
17
not be terminated until at least 10 days after receipt by the
18
Illinois Workers' Compensation Commission of notice of the
19
cancellation or termination of said insurance; provided,
20
however, that if the employer has secured insurance from
21
another insurance carrier, or has otherwise secured the
22
payment of compensation in accordance with this Section, and
23
such insurance or other security becomes effective prior to
24
the expiration of the 10 days, cancellation or termination
25
may, at the option of the insurance carrier indicated in such
26
notice, be effective as of the effective date of such other

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1
insurance or security.
2

(c) Whenever the Commission shall find that any
3
corporation, company, association, aggregation of individuals,
4
reciprocal or interinsurers exchange, or other insurer
5
effecting workers' compensation insurance in this State shall
6
be insolvent, financially unsound, or unable to fully meet all
7
payments and liabilities assumed or to be assumed for
8
compensation insurance in this State, or shall practice a
9
policy of delay or unfairness toward employees in the
10
adjustment, settlement, or payment of benefits due such
11
employees, the Commission may after reasonable notice and
12
hearing order and direct that such corporation, company,
13
association, aggregation of individuals, reciprocal or
14
interinsurers exchange, or insurer, shall from and after a
15
date fixed in such order discontinue the writing of any such
16
workers' compensation insurance in this State. Subject to such
17
modification of the order as the Commission may later make on
18
review of the order, as herein provided, it shall thereupon be
19
unlawful for any such corporation, company, association,
20
aggregation of individuals, reciprocal or interinsurers
21
exchange, or insurer to effect any workers' compensation
22
insurance in this State. A copy of the order shall be served
23
upon the Director of Insurance by registered mail. Whenever
24
the Commission finds that any service or adjustment company
25
used or employed by a self-insured employer or by an insurance
26
carrier to process, adjust, investigate, compromise or

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1
otherwise handle claims under this Act, has practiced or is
2
practicing a policy of delay or unfairness toward employees in
3
the adjustment, settlement or payment of benefits due such
4
employees, the Commission may after reasonable notice and
5
hearing order and direct that such service or adjustment
6
company shall from and after a date fixed in such order be
7
prohibited from processing, adjusting, investigating,
8
compromising or otherwise handling claims under this Act.
9

Whenever the Commission finds that any self-insured
10
employer has practiced or is practicing delay or unfairness
11
toward employees in the adjustment, settlement or payment of
12
benefits due such employees, the Commission may, after
13
reasonable notice and hearing, order and direct that after a
14
date fixed in the order such self-insured employer shall be
15
disqualified to operate as a self-insurer and shall be
16
required to insure his entire liability to pay compensation in
17
some insurance carrier authorized, licensed and permitted to
18
do such insurance business in this State, as provided in
19
subparagraph 3 of paragraph (a) of this Section.
20

All orders made by the Commission under this Section shall
21
be subject to review by the courts, said review to be taken in
22
the same manner and within the same time as provided by Section
23
19 of this Act for review of awards and decisions of the
24
Commission, upon the party seeking the review filing with the
25
clerk of the court to which said review is taken a bond in an
26
amount to be fixed and approved by the court to which the

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review is taken, conditioned upon the payment of all
2
compensation awarded against the person taking said review
3
pending a decision thereof and further conditioned upon such
4
other obligations as the court may impose. Upon the review the
5
Circuit Court shall have power to review all questions of fact
6
as well as of law. The penalty hereinafter provided for in this
7
paragraph shall not attach and shall not begin to run until the
8
final determination of the order of the Commission.
9

(d) Whenever a panel of 3 Commissioners comprised of one
10
member of the employing class, one representative of a labor
11
organization recognized under the National Labor Relations Act
12
or an attorney who has represented labor organizations or has
13
represented employees in workers' compensation cases, and one
14
member not identified with either the employing class or a
15
labor organization, with due process and after a hearing,
16
determines an employer has knowingly failed to provide
17
coverage as required by paragraph (a) of this Section, the
18
failure shall be deemed an immediate serious danger to public
19
health, safety, and welfare sufficient to justify service by
20
the Commission of a work-stop order on such employer,
21
requiring the cessation of all business operations of such
22
employer at the place of employment or job site. Any law
23
enforcement agency in the State shall, at the request of the
24
Commission, render any assistance necessary to carry out the
25
provisions of this Section, including, but not limited to,
26
preventing any employee of such employer from remaining at a

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place of employment or job site after a work-stop order has
2
taken effect. Any work-stop order shall be lifted upon proof
3
of insurance as required by this Act. Any orders under this
4
Section are appealable under Section 19(f) to the Circuit
5
Court.
6

Any individual employer, corporate officer or director of
7
a corporate employer, partner of an employer partnership, or
8
member of an employer limited liability company who knowingly
9
fails to provide coverage as required by paragraph (a) of this
10
Section is guilty of a Class 4 felony. This provision shall not
11
apply to any corporate officer or director of any
12
publicly-owned corporation. Each day's violation constitutes a
13
separate offense. The State's Attorney of the county in which
14
the violation occurred, or the Attorney General, shall bring
15
such actions in the name of the People of the State of
16
Illinois, or may, in addition to other remedies provided in
17
this Section, bring an action for an injunction to restrain
18
the violation or to enjoin the operation of any such employer.
19

Any individual employer, corporate officer or director of
20
a corporate employer, partner of an employer partnership, or
21
member of an employer limited liability company who
22
negligently fails to provide coverage as required by paragraph
23
(a) of this Section is guilty of a Class A misdemeanor. This
24
provision shall not apply to any corporate officer or director
25
of any publicly-owned corporation. Each day's violation
26
constitutes a separate offense. The State's Attorney of the

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county in which the violation occurred, or the Attorney
2
General, shall bring such actions in the name of the People of
3
the State of Illinois.
4

The criminal penalties in this subsection (d) shall not
5
apply where there exists a good faith dispute as to the
6
existence of an employment relationship. Evidence of good
7
faith shall include, but not be limited to, compliance with
8
the definition of employee as used by the Internal Revenue
9
Service.
10

Employers who are subject to and who knowingly fail to
11
comply with this Section shall not be entitled to the benefits
12
of this Act during the period of noncompliance, but shall be
13
liable in an action under any other applicable law of this
14
State. In the action, such employer shall not avail himself or
15
herself of the defenses of assumption of risk or negligence or
16
that the injury was due to a co-employee. In the action, proof
17
of the injury shall constitute prima facie evidence of
18
negligence on the part of such employer and the burden shall be
19
on such employer to show freedom of negligence resulting in
20
the injury. The employer shall not join any other defendant in
21
any such civil action. Nothing in this amendatory Act of the
22
94th General Assembly shall affect the employee's rights under
23
subdivision (a)3 of Section 1 of this Act. Any employer or
24
carrier who makes payments under subdivision (a)3 of Section 1
25
of this Act shall have a right of reimbursement from the
26
proceeds of any recovery under this Section.

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1

An employee of an uninsured employer, or the employee's
2
dependents in case death ensued, may, instead of proceeding
3
against the employer in a civil action in court, file an
4
application for adjustment of claim with the Commission in
5
accordance with the provisions of this Act and the Commission
6
shall hear and determine the application for adjustment of
7
claim in the manner in which other claims are heard and
8
determined before the Commission.
9

All proceedings under this subsection (d) shall be
10
reported on an annual basis to the Workers' Compensation
11
Advisory Board.
12

An investigator with the Department of Insurance may issue
13
a citation to any employer that is not in compliance with its
14
obligation to have workers' compensation insurance under this
15
Act. The amount of the fine shall be based on the period of
16
time the employer was in non-compliance, but shall be no less
17
than $500, and shall not exceed $2,500. An employer that has
18
been issued a citation shall pay the fine to the Department of
19
Insurance and provide to the Department of Insurance proof
20
that it obtained the required workers' compensation insurance
21
within 10 days after the citation was issued. This Section
22
does not affect any other obligations this Act imposes on
23
employers.
24

Upon a finding by the Commission, after reasonable notice
25
and hearing, of the knowing and wilful failure or refusal of an
26
employer to comply with any of the provisions of paragraph (a)

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of this Section, the failure or refusal of an employer,
2
service or adjustment company, or an insurance carrier to
3
comply with any order of the Illinois Workers' Compensation
4
Commission pursuant to paragraph (c) of this Section
5
disqualifying him or her to operate as a self insurer and
6
requiring him or her to insure his or her liability, or the
7
knowing and willful failure of an employer to comply with a
8
citation issued by an investigator with the Department of
9
Insurance, the Commission may assess a civil penalty of up to
10
$500 per day for each day of such failure or refusal after the
11
effective date of this amendatory Act of 1989. The minimum
12
penalty under this Section shall be the sum of $10,000. Each
13
day of such failure or refusal shall constitute a separate
14
offense. The Commission may assess the civil penalty
15
personally and individually against the corporate officers and
16
directors of a corporate employer, the partners of an employer
17
partnership, and the members of an employer limited liability
18
company, after a finding of a knowing and willful refusal or
19
failure of each such named corporate officer, director,
20
partner, or member to comply with this Section. The liability
21
for the assessed penalty shall be against the named employer
22
first, and if the named employer fails or refuses to pay the
23
penalty to the Commission within 30 days after the final order
24
of the Commission, then the named corporate officers,
25
directors, partners, or members who have been found to have
26
knowingly and willfully refused or failed to comply with this

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Section shall be liable for the unpaid penalty or any unpaid
2
portion of the penalty. Upon investigation by the Department
3
of Insurance, the Attorney General shall have the authority to
4
prosecute all proceedings to enforce the civil and
5
administrative provisions of this Section before the
6
Commission. The Commission and the Department of Insurance
7
shall promulgate procedural rules for enforcing this Section
8
relating to their respective duties prescribed herein.
9

A Commission decision imposing penalties under this
10
Section may be judicially reviewed only as described in
11
Section 19(f). After expiration of the period for seeking
12
judicial review, the Commission's final decision imposing
13
penalties may be enforced in the same manner as a judgment
14
entered by a court of competent jurisdiction. The Commission's
15
final decision imposing penalties is a debt due and owing to
16
the State and can be enforced to the same extent as a judgment
17
entered by a circuit court. The Attorney General shall
18
represent the Commission and the Department of Insurance in
19
any action challenging the final decision in circuit court. If
20
the court affirms the Commission's decision, the court shall
21
enter judgment against the employer in the amount of the fines
22
assessed by the Commission. The Attorney General shall make
23
reasonable efforts to collect the amounts due under the
24
Commission's decision.
25

Any individual employer, corporate officer or director of
26
a corporate employer, partner of an employer partnership, or

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member of an employer limited liability company who, with the
2
intent to avoid payment of compensation under this Act to an
3
injured employee or the employee's dependents, knowingly
4
transfers, sells, encumbers, assigns, or in any manner
5
disposes of, conceals, secretes, or destroys any property
6
belonging to the employer, officer, director, partner, or
7
member is guilty of a Class 4 felony.
8

Penalties and fines collected pursuant to this paragraph
9
(d) shall be deposited upon receipt into a special fund which
10
shall be designated the Injured Workers' Benefit Fund, of
11
which the State Treasurer is ex-officio custodian, such
12
special fund to be held and disbursed in accordance with this
13
paragraph (d) for the purposes hereinafter stated in this
14
paragraph (d), upon the final order of the Commission. The
15
Injured Workers' Benefit Fund shall be deposited the same as
16
are State funds and any interest accruing thereon shall be
17
added thereto every 6 months. The Injured Workers' Benefit
18
Fund is subject to audit the same as State funds and accounts
19
and is protected by the general bond given by the State
20
Treasurer. The Injured Workers' Benefit Fund is considered
21
always appropriated for the purposes of disbursements as
22
provided in this paragraph, and shall be paid out and
23
disbursed as herein provided and shall not at any time be
24
appropriated or diverted to any other use or purpose. Moneys
25
in the Injured Workers' Benefit Fund shall be used only for
26
payment of workers' compensation benefits for injured

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employees when the employer has failed to provide coverage as
2
determined under this paragraph (d) and has failed to pay the
3
benefits due to the injured employee. The employer shall
4
reimburse the Injured Workers' Benefit Fund for any amounts
5
paid to an employee on account of the compensation awarded by
6
the Commission. The Attorney General shall make reasonable
7
efforts to obtain reimbursement for the Injured Workers'
8
Benefit Fund.
9

Any such amounts obtained shall be deposited by the
10
Commission into the Injured Workers' Benefit Fund. If an
11
injured employee or his or her personal representative
12
receives payment from the Injured Workers' Benefit Fund, the
13
State of Illinois has the same rights under paragraph (b) of
14
Section 5 that the employer who failed to pay the benefits due
15
to the injured employee would have had if the employer had paid
16
those benefits, and any moneys recovered by the State as a
17
result of the State's exercise of its rights under paragraph
18
(b) of Section 5 shall be deposited into the Injured Workers'
19
Benefit Fund. The custodian of the Injured Workers' Benefit
20
Fund shall be joined with the employer as a party respondent in
21
the application for adjustment of claim. After July 1, 2006,
22
the Commission shall make disbursements from the Fund once
23
each year to each eligible claimant. An eligible claimant is
24
an injured worker who has within the previous fiscal year
25
obtained a final award for benefits from the Commission
26
against the employer and the Injured Workers' Benefit Fund and

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has notified the Commission within 90 days of receipt of such
2
award. Within a reasonable time after the end of each fiscal
3
year, the Commission shall make a disbursement to each
4
eligible claimant. At the time of disbursement, if there are
5
insufficient moneys in the Fund to pay all claims, each
6
eligible claimant shall receive a pro-rata share, as
7
determined by the Commission, of the available moneys in the
8
Fund for that year. Payment from the Injured Workers' Benefit
9
Fund to an eligible claimant pursuant to this provision shall
10
discharge the obligations of the Injured Workers' Benefit Fund
11
regarding the award entered by the Commission.
12

(e) This Act shall not affect or disturb the continuance
13
of any existing insurance, mutual aid, benefit, or relief
14
association or department, whether maintained in whole or in
15
part by the employer or whether maintained by the employees,
16
the payment of benefits of such association or department
17
being guaranteed by the employer or by some person, firm or
18
corporation for him or her: Provided, the employer contributes
19
to such association or department an amount not less than the
20
full compensation herein provided, exclusive of the cost of
21
the maintenance of such association or department and without
22
any expense to the employee. This Act shall not prevent the
23
organization and maintaining under the insurance laws of this
24
State of any benefit or insurance company for the purpose of
25
insuring against the compensation provided for in this Act,
26
the expense of which is maintained by the employer. This Act

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1
shall not prevent the organization or maintaining under the
2
insurance laws of this State of any voluntary mutual aid,
3
benefit or relief association among employees for the payment
4
of additional accident or sick benefits.
5

(f) No existing insurance, mutual aid, benefit or relief
6
association or department shall, by reason of anything herein
7
contained, be authorized to discontinue its operation without
8
first discharging its obligations to any and all persons
9
carrying insurance in the same or entitled to relief or
10
benefits therein.
11

(g) Any contract, oral, written or implied, of employment
12
providing for relief benefit, or insurance or any other device
13
whereby the employee is required to pay any premium or
14
premiums for insurance against the compensation provided for
15
in this Act shall be null and void. Any employer withholding
16
from the wages of any employee any amount for the purpose of
17
paying any such premium shall be guilty of a Class B
18
misdemeanor.
19

In the event the employer does not pay the compensation
20
for which he or she is liable, then an insurance company,
21
association or insurer which may have insured such employer
22
against such liability shall become primarily liable to pay to
23
the employee, his or her personal representative or
24
beneficiary the compensation required by the provisions of
25
this Act to be paid by such employer. The insurance carrier may
26
be made a party to the proceedings in which the employer is a

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1
party and an award may be entered jointly against the employer
2
and the insurance carrier.
3

(h) It shall be unlawful for any employer, insurance
4
company or service or adjustment company to interfere with,
5
restrain or coerce an employee in any manner whatsoever in the
6
exercise of the rights or remedies granted to him or her by
7
this Act or to discriminate, attempt to discriminate, or
8
threaten to discriminate against an employee in any way
9
because of his or her exercise of the rights or remedies
10
granted to him or her by this Act.
11

It shall be unlawful for any employer, individually or
12
through any insurance company or service or adjustment
13
company, to discharge or to threaten to discharge, or to
14
refuse to rehire or recall to active service in a suitable
15
capacity an employee because of the exercise of his or her
16
rights or remedies granted to him or her by this Act.
17

(i) If an employer elects to obtain a life insurance
18
policy on his employees, he may also elect to apply such
19
benefits in satisfaction of all or a portion of the death
20
benefits payable under this Act, in which case, the employer's
21
compensation premium shall be reduced accordingly.
22

(j) Within 45 days of receipt of an initial application or
23
application to renew self-insurance privileges the
24
Self-Insurers Advisory Board shall review and submit for
25
approval by the Chairman of the Commission recommendations of
26
disposition of all initial applications to self-insure and all

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1
applications to renew self-insurance privileges filed by
2
private self-insurers pursuant to the provisions of this
3
Section and Section 4a-9 of this Act. Each private
4
self-insurer shall submit with its initial and renewal
5
applications the application fee required by Section 4a-4 of
6
this Act.
7

The Chairman of the Commission shall promptly act upon all
8
initial applications and applications for renewal in full
9
accordance with the recommendations of the Board or, should
10
the Chairman disagree with any recommendation of disposition
11
of the Self-Insurer's Advisory Board, he shall within 30 days
12
of receipt of such recommendation provide to the Board in
13
writing the reasons supporting his decision. The Chairman
14
shall also promptly notify the employer of his decision within
15
15 days of receipt of the recommendation of the Board.
16

If an employer is denied a renewal of self-insurance
17
privileges pursuant to application it shall retain said
18
privilege for 120 days after receipt of a notice of
19
cancellation of the privilege from the Chairman of the
20
Commission.
21

All orders made by the Chairman under this Section shall
22
be subject to review by the courts, such review to be taken in
23
the same manner and within the same time as provided by
24
subsection (f) of Section 19 of this Act for review of awards
25
and decisions of the Commission, upon the party seeking the
26
review filing with the clerk of the court to which such review

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1
is taken a bond in an amount to be fixed and approved by the
2
court to which the review is taken, conditioned upon the
3
payment of all compensation awarded against the person taking
4
such review pending a decision thereof and further conditioned
5
upon such other obligations as the court may impose. Upon the
6
review the Circuit Court shall have power to review all
7
questions of fact as well as of law.
8
(Source: P.A. 101-384, eff. 1-1-20
; 102-37, eff. 7-1-21;
9
103-590, eff. 6-5-24.)

10

(820 ILCS 305/7)
11

Sec. 7.
The amount of compensation which shall be paid for
12
an accidental injury to the employee resulting in death is:
13

(a) If the employee leaves surviving a widow, widower,
14
child or children, the applicable weekly compensation rate
15
computed in accordance with subparagraph 2 of paragraph (b) of
16
Section 8, shall be payable during the life of the widow or
17
widower and if any surviving child or children shall not be
18
physically or mentally incapacitated then until the death of
19
the widow or widower or until the youngest child shall reach
20
the age of 18, whichever shall come later; provided that if
21
such child or children shall be enrolled as a full-time
22
student in any accredited educational institution, the
23
payments shall continue until such child has attained the age
24
of 25. In the event any surviving child or children shall be
25
physically or mentally incapacitated, the payments shall

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continue for the duration of such incapacity.
2

The term "child" means a child whom the deceased employee
3
left surviving, including a posthumous child, a child legally
4
adopted, a child whom the deceased employee was legally
5
obligated to support or a child to whom the deceased employee
6
stood in loco parentis. The term "children" means the plural
7
of "child".
8

The term "physically or mentally incapacitated child or
9
children" means a child or children incapable of engaging in
10
regular and substantial gainful employment.
11

In the event of the remarriage of a widow or widower, where
12
the decedent did not leave surviving any child or children
13
who, at the time of such remarriage, are entitled to
14
compensation benefits under this Act, the surviving spouse
15
shall be paid a lump sum equal to 2 years compensation benefits
16
and all further rights of such widow or widower shall be
17
extinguished.
18

If the employee leaves surviving any child or children
19
under 18 years of age who at the time of death shall be
20
entitled to compensation under this paragraph (a) of this
21
Section, the weekly compensation payments herein provided for
22
such child or children shall in any event continue for a period
23
of not less than 6 years.
24

Any beneficiary entitled to compensation under this
25
paragraph (a) of this Section shall receive from the special
26
fund provided in paragraph (f) of this Section, in addition to

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1
the compensation herein provided, supplemental benefits in
2
accordance with paragraph (g) of Section 8.
3

(b) If no compensation is payable under paragraph (a) of
4
this Section and the employee leaves surviving a parent or
5
parents who at the time of the accident were totally dependent
6
upon the earnings of the employee then weekly payments equal
7
to the compensation rate payable in the case where the
8
employee leaves surviving a widow or widower, shall be paid to
9
such parent or parents for the duration of their lives, and in
10
the event of the death of either, for the life of the survivor.
11

(c) If no compensation is payable under paragraph (a) or
12
(b) of this Section and the employee leaves surviving any
13
child or children who are not entitled to compensation under
14
the foregoing paragraph (a) but who at the time of the accident
15
were nevertheless in any manner dependent upon the earnings of
16
the employee, or leaves surviving a parent or parents who at
17
the time of the accident were partially dependent upon the
18
earnings of the employee, then there shall be paid to such
19
dependent or dependents for a period of 8 years weekly
20
compensation payments at such proportion of the applicable
21
rate if the employee had left surviving a widow or widower as
22
such dependency bears to total dependency. In the event of the
23
death of any such beneficiary the share of such beneficiary
24
shall be divided equally among the surviving beneficiaries and
25
in the event of the death of the last such beneficiary all the
26
rights under this paragraph shall be extinguished.

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1

(d) If no compensation is payable under paragraph (a),
2
(b), or (c) of this Section and the employee leaves surviving
3
any grandparent, grandparents, grandchild or grandchildren or
4
collateral heirs dependent upon the employee's earnings to the
5
extent of 50% or more of total dependency, then there shall be
6
paid to such dependent or dependents for a period of 5 years
7
weekly compensation payments at such proportion of the
8
applicable rate if the employee had left surviving a widow or
9
widower as such dependency bears to total dependency. In the
10
event of the death of any such beneficiary the share of such
11
beneficiary shall be divided equally among the surviving
12
beneficiaries and in the event of the death of the last such
13
beneficiary all rights hereunder shall be extinguished.
14

(e) The compensation to be paid for accidental injury
15
which results in death, as provided in this Section, shall be
16
paid to the persons who form the basis for determining the
17
amount of compensation to be paid by the employer, the
18
respective shares to be in the proportion of their respective
19
dependency at the time of the accident on the earnings of the
20
deceased. The Commission or an Arbitrator thereof may, in its
21
or his discretion, order or award the payment to the parent or
22
grandparent of a child for the latter's support the amount of
23
compensation which but for such order or award would have been
24
paid to such child as its share of the compensation payable,
25
which order or award may be modified from time to time by the
26
Commission in its discretion with respect to the person to

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1
whom shall be paid the amount of the order or award remaining
2
unpaid at the time of the modification.
3

The payments of compensation by the employer in accordance
4
with the order or award of the Commission discharges such
5
employer from all further obligation as to such compensation.
6

(f) The sum of
$10,000

$8,000
for burial expenses shall be
7
paid by the employer to the widow or widower, other dependent,
8
next of kin or to the person or persons incurring the expense
9
of burial.
10

In the event the employer failed to provide necessary
11
first aid, medical, surgical or hospital service, he shall pay
12
the cost thereof to the person or persons entitled to
13
compensation under paragraphs (a), (b), (c), or (d) of this
14
Section, or to the person or persons incurring the obligation
15
therefore, or providing the same.
16

On January 15 and July 15, 1981, and on January 15 and July
17
15 of each year thereafter the employer shall within 60 days
18
pay a sum equal to 1/8 of 1% of all compensation payments made
19
by him after July 1, 1980, either under this Act or the
20
Workers' Occupational Diseases Act, whether by lump sum
21
settlement or weekly compensation payments, but not including
22
hospital, surgical or rehabilitation payments, made during the
23
first 6 months and during the second 6 months respectively of
24
the fiscal year next preceding the date of the payments, into a
25
special fund which shall be designated the "Second Injury
26
Fund", of which the State Treasurer is ex officio custodian,

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1
such special fund to be held and disbursed for the purposes
2
hereinafter stated in paragraphs (f) and (g) of Section 8,
3
either upon the order of the Commission or of a competent
4
court. Said special fund shall be deposited the same as are
5
State funds and any interest accruing thereon shall be added
6
thereto every 6 months. It is subject to audit the same as
7
State funds and accounts and is protected by the General bond
8
given by the State Treasurer. It is considered always
9
appropriated for the purposes of disbursements as provided in
10
paragraph (f) of Section 8 of this Act, and shall be paid out
11
and disbursed as therein provided and shall not at any time be
12
appropriated or diverted to any other use or purpose.
13

On January 15, 1991, the employer shall further pay a sum
14
equal to one half of 1% of all compensation payments made by
15
him from January 1, 1990 through June 30, 1990 either under
16
this Act or under the Workers' Occupational Diseases Act,
17
whether by lump sum settlement or weekly compensation
18
payments, but not including hospital, surgical or
19
rehabilitation payments, into an additional Special Fund which
20
shall be designated as the "Rate Adjustment Fund". On March
21
15, 1991, the employer shall pay into the Rate Adjustment Fund
22
a sum equal to one half of 1% of all such compensation payments
23
made from July 1, 1990 through December 31, 1990. Within 60
24
days after July 15, 1991, the employer shall pay into the Rate
25
Adjustment Fund a sum equal to one half of 1% of all such
26
compensation payments made from January 1, 1991 through June

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1
30, 1991. Within 60 days after January 15 of 1992 and each
2
subsequent year through 1996, the employer shall pay into the
3
Rate Adjustment Fund a sum equal to one half of 1% of all such
4
compensation payments made in the last 6 months of the
5
preceding calendar year. Within 60 days after July 15 of 1992
6
and each subsequent year through 1995, the employer shall pay
7
into the Rate Adjustment Fund a sum equal to one half of 1% of
8
all such compensation payments made in the first 6 months of
9
the same calendar year. Within 60 days after January 15 of 1997
10
and each subsequent year through 2005, the employer shall pay
11
into the Rate Adjustment Fund a sum equal to three-fourths of
12
1% of all such compensation payments made in the last 6 months
13
of the preceding calendar year. Within 60 days after July 15 of
14
1996 and each subsequent year through 2004, the employer shall
15
pay into the Rate Adjustment Fund a sum equal to three-fourths
16
of 1% of all such compensation payments made in the first 6
17
months of the same calendar year. Within 60 days after July 15
18
of 2005, the employer shall pay into the Rate Adjustment Fund a
19
sum equal to 1% of such compensation payments made in the first
20
6 months of the same calendar year. Within 60 days after
21
January 15 of 2006 and each subsequent year through 2024, the
22
employer shall pay into the Rate Adjustment Fund a sum equal to
23
1.25% of such compensation payments made in the last 6 months
24
of the preceding calendar year. Within 60 days after July 15 of
25
2006 and each subsequent year through 2023, the employer shall
26
pay into the Rate Adjustment Fund a sum equal to 1.25% of such

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1
compensation payments made in the first 6 months of the same
2
calendar year. Within 60 days after July 15 of 2024 and each
3
subsequent year thereafter, the employer shall pay into the
4
Rate Adjustment Fund a sum equal to 1.375% of such
5
compensation payments made in the first 6 months of the same
6
calendar year. Within 60 days after January 15 of 2025 and each
7
subsequent year thereafter, the employer shall pay into the
8
Rate Adjustment Fund a sum equal to 1.375% of such
9
compensation payments made in the last 6 months of the
10
preceding calendar year. The administrative costs of
11
collecting assessments from employers for the Rate Adjustment
12
Fund shall be paid from the Rate Adjustment Fund. The cost of
13
an actuarial audit of the Fund shall be paid from the Rate
14
Adjustment Fund. The State Treasurer is ex officio custodian
15
of such Special Fund and the same shall be held and disbursed
16
for the purposes hereinafter stated in paragraphs (f) and (g)
17
of Section 8 upon the order of the Commission or of a competent
18
court. The Rate Adjustment Fund shall be deposited the same as
19
are State funds and any interest accruing thereon shall be
20
added thereto every 6 months. It shall be subject to audit the
21
same as State funds and accounts and shall be protected by the
22
general bond given by the State Treasurer. It is considered
23
always appropriated for the purposes of disbursements as
24
provided in paragraphs (f) and (g) of Section 8 of this Act and
25
shall be paid out and disbursed as therein provided and shall
26
not at any time be appropriated or diverted to any other use or

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purpose. Within 5 days after December 7, 1990 (the effective
2
date of Public Act 86-1448), the Comptroller and the State
3
Treasurer shall transfer $1,000,000 from the General Revenue
4
Fund to the Rate Adjustment Fund. By February 15, 1991, the
5
Comptroller and the State Treasurer shall transfer $1,000,000
6
from the Rate Adjustment Fund to the General Revenue Fund. The
7
Comptroller and Treasurer are authorized to make transfers at
8
the request of the Chairman up to a total of $19,000,000 from
9
the Second Injury Fund, the General Revenue Fund, and the
10
Workers' Compensation Benefit Trust Fund to the Rate
11
Adjustment Fund to the extent that there is insufficient money
12
in the Rate Adjustment Fund to pay claims and obligations.
13
Amounts may be transferred from the General Revenue Fund only
14
if the funds in the Second Injury Fund or the Workers'
15
Compensation Benefit Trust Fund are insufficient to pay claims
16
and obligations of the Rate Adjustment Fund. All amounts
17
transferred from the Second Injury Fund, the General Revenue
18
Fund, and the Workers' Compensation Benefit Trust Fund shall
19
be repaid from the Rate Adjustment Fund within 270 days of a
20
transfer, together with interest at the rate earned by moneys
21
on deposit in the Fund or Funds from which the moneys were
22
transferred.
23

Upon a finding by the Commission, after reasonable notice
24
and hearing, that any employer has willfully and knowingly
25
failed to pay the proper amounts into the Second Injury Fund or
26
the Rate Adjustment Fund required by this Section or if such

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1
payments are not made within the time periods prescribed by
2
this Section, the employer shall, in addition to such
3
payments, pay a penalty of 20% of the amount required to be
4
paid or $2,500, whichever is greater, for each year or part
5
thereof of such failure to pay. This penalty shall only apply
6
to obligations of an employer to the Second Injury Fund or the
7
Rate Adjustment Fund accruing after December 18, 1989 (the
8
effective date of Public Act 86-998). All or part of such a
9
penalty may be waived by the Commission for good cause shown.
10

Any obligations of an employer to the Second Injury Fund
11
and Rate Adjustment Fund accruing prior to December 18, 1989
12
(the effective date of Public Act 86-998) shall be paid in full
13
by such employer within 5 years of December 18, 1989 (the
14
effective date of Public Act 86-998), with at least one-fifth
15
of such obligation to be paid during each year following
16
December 18, 1989 (the effective date of Public Act 86-998).
17
If the Commission finds, following reasonable notice and
18
hearing, that an employer has failed to make timely payment of
19
any obligation accruing under the preceding sentence, the
20
employer shall, in addition to all other payments required by
21
this Section, be liable for a penalty equal to 20% of the
22
overdue obligation or $2,500, whichever is greater, for each
23
year or part thereof that obligation is overdue. All or part of
24
such a penalty may be waived by the Commission for good cause
25
shown.
26

The Chairman of the Illinois Workers' Compensation

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Commission shall, annually, furnish to the Director of the
2
Department of Insurance a list of the amounts paid into the
3
Second Injury Fund and the Rate Adjustment Fund by each
4
insurance company on behalf of their insured employers. The
5
Director shall verify to the Chairman that the amounts paid by
6
each insurance company are accurate as best as the Director
7
can determine from the records available to the Director. The
8
Chairman shall verify that the amounts paid by each
9
self-insurer are accurate as best as the Chairman can
10
determine from records available to the Chairman. The Chairman
11
may require each self-insurer to provide information
12
concerning the total compensation payments made upon which
13
contributions to the Second Injury Fund and the Rate
14
Adjustment Fund are predicated and any additional information
15
establishing that such payments have been made into these
16
funds. Any deficiencies in payments noted by the Director or
17
Chairman shall be subject to the penalty provisions of this
18
Act.
19

The State Treasurer, or his duly authorized
20
representative, shall be named as a party to all proceedings
21
in all cases involving claim for the loss of, or the permanent
22
and complete loss of the use of one eye, one foot, one leg, one
23
arm or one hand.
24

The State Treasurer or his duly authorized agent shall
25
have the same rights as any other party to the proceeding,
26
including the right to petition for review of any award. The

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1
reasonable expenses of litigation, such as medical
2
examinations, testimony, and transcript of evidence, incurred
3
by the State Treasurer or his duly authorized representative,
4
shall be borne by the Second Injury Fund.
5

If the award is not paid within 30 days after the date the
6
award has become final, the Commission shall proceed to take
7
judgment thereon in its own name as is provided for other
8
awards by paragraph (g) of Section 19 of this Act and take the
9
necessary steps to collect the award.
10

Any person, corporation or organization who has paid or
11
become liable for the payment of burial expenses of the
12
deceased employee may in his or its own name institute
13
proceedings before the Commission for the collection thereof.
14

For the purpose of administration, receipts and
15
disbursements, the Special Fund provided for in paragraph (f)
16
of this Section shall be administered jointly with the Special
17
Fund provided for in paragraph (f) of Section 7 of the Workers'
18
Occupational Diseases Act.
19

(g) All compensation, except for burial expenses provided
20
in this Section to be paid in case accident results in death,
21
shall be paid in installments equal to the percentage of the
22
average earnings as provided for in paragraph (b) of Section 8
23
of this Act, at the same intervals at which the wages or
24
earnings of the employees were paid. If this is not feasible,
25
then the installments shall be paid weekly. Such compensation
26
may be paid in a lump sum upon petition as provided in Section

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9 of this Act. However, in addition to the benefits provided by
2
Section 9 of this Act where compensation for death is payable
3
to the deceased's widow, widower or to the deceased's widow,
4
widower and one or more children, and where a partial lump sum
5
is applied for by such beneficiary or beneficiaries within 18
6
months after the deceased's death, the Commission may, in its
7
discretion, grant a partial lump sum of not to exceed 100 weeks
8
of the compensation capitalized at their present value upon
9
the basis of interest calculated at 3% per annum with annual
10
rests, upon a showing that such partial lump sum is for the
11
best interest of such beneficiary or beneficiaries.
12

(h) In case the injured employee is under 16 years of age
13
at the time of the accident and is illegally employed, the
14
amount of compensation payable under paragraphs (a), (b), (c),
15
(d), and (f) of this Section shall be increased 50%.
16

Nothing herein contained repeals or amends the provisions
17
of the Child Labor Law of 2024 relating to the employment of
18
minors under the age of 16 years.
19

However, where an employer has on file an employment
20
certificate issued pursuant to the Child Labor Law of 2024 or
21
work permit issued pursuant to the Federal Fair Labor
22
Standards Act, as amended, or a birth certificate properly and
23
duly issued, such certificate, permit or birth certificate is
24
conclusive evidence as to the age of the injured minor
25
employee for the purposes of this Section only.
26

(i) Whenever the dependents of a deceased employee are

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noncitizens not residing in the United States, Mexico or
2
Canada, the amount of compensation payable is limited to the
3
beneficiaries described in paragraphs (a), (b), and (c) of
4
this Section and is 50% of the compensation provided in
5
paragraphs (a), (b), and (c) of this Section, except as
6
otherwise provided by treaty.
7

In a case where any of the persons who would be entitled to
8
compensation is living at any place outside of the United
9
States, then payment shall be made to the personal
10
representative of the deceased employee. The distribution by
11
such personal representative to the persons entitled shall be
12
made to such persons and in such manner as the Commission
13
orders.
14
(Source: P.A. 103-590, eff. 6-5-24; 103-721, eff. 1-1-25;
15
104-417, eff. 8-15-25.)

16

(820 ILCS 305/8.7)
17

Sec. 8.7.
Utilization review programs.
18

(a) As used in this Section:
19

"Utilization review" means the evaluation of proposed or
20
provided health care services to determine the appropriateness
21
of both the level of health care services medically necessary
22
and the quality of health care services provided to a patient,
23
including evaluation of their efficiency, efficacy, and
24
appropriateness of treatment, hospitalization, or office
25
visits based on medically accepted standards. The evaluation

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1
must be accomplished by means of a system that identifies the
2
utilization of health care services based on standards of care
3
of nationally recognized peer review guidelines as well as
4
nationally recognized treatment guidelines and evidence-based
5
medicine based upon standards as provided in this Act.
6
Utilization techniques may include prospective review, second
7
opinions, concurrent review, discharge planning, peer review,
8
independent medical examinations, and retrospective review
9
(for purposes of this sentence, retrospective review shall be
10
applicable to services rendered on or after July 20, 2005).
11
Nothing in this Section applies to prospective review of
12
necessary first aid or emergency treatment.
13

(b) No person may conduct a utilization review program for
14
workers' compensation services in this State unless once every
15
2 years the person registers the utilization review program
16
with the Department of Insurance and certifies compliance with
17
the Workers' Compensation Utilization Management standards or
18
Health Utilization Management Standards of URAC sufficient to
19
achieve URAC accreditation or submits evidence of
20
accreditation by URAC for its Workers' Compensation
21
Utilization Management Standards or Health Utilization
22
Management Standards. Nothing in this Act shall be construed
23
to require an employer or insurer or its subcontractors to
24
become URAC accredited.
25

(c) In addition, the Director of Insurance may certify
26
alternative utilization review standards of national

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1
accreditation organizations or entities in order for plans to
2
comply with this Section. Any alternative utilization review
3
standards shall meet or exceed those standards required under
4
subsection (b).
5

(d) This registration shall include submission of all of
6
the following information regarding utilization review program
7
activities:
8

(1) The name, address, and telephone number of the
9

utilization review programs.
10

(2) The organization and governing structure of the
11

utilization review programs.
12

(3) The number of lives for which utilization review
13

is conducted by each utilization review program.
14

(4) Hours of operation of each utilization review
15

program.
16

(5) Description of the grievance process for each
17

utilization review program.
18

(6) Number of covered lives for which utilization
19

review was conducted for the previous calendar year for
20

each utilization review program.
21

(7) Written policies and procedures for protecting
22

confidential information according to applicable State and
23

federal laws for each utilization review program.
24

(e) A utilization review program shall have written
25
procedures to ensure that patient-specific information
26
obtained during the process of utilization review will be:

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1

(1) kept confidential in accordance with applicable
2

State and federal laws; and
3

(2) shared only with the employee, the employee's
4

designee, and the employee's health care provider, and
5

those who are authorized by law to receive the
6

information. Summary data shall not be considered
7

confidential if it does not provide information to allow
8

identification of individual patients or health care
9

providers.
10

Only a health care professional may make determinations
11
regarding the medical necessity of health care services during
12
the course of utilization review.
Any adverse determination
13
shall be made by a physician if the health care services are to
14
be delivered or recommended by a physician. The reviewing
15
physician shall have:
16

(1) a current and valid nonrestricted license in any
17

United States jurisdiction and a current certification by
18

a recognized American medical specialty board in the area
19

or areas appropriate to the subject of the review; and
20

(2) experience treating and managing patients with the
21

medical condition or disease for which the health care
22

service is being requested.
23

Notwithstanding the provisions of this subsection, a
24
licensed health care professional who satisfies the
25
requirements of this subsection may make an adverse
26
determination of a service request submitted by a health care

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1
professional licensed in the same profession.

2

When making retrospective reviews, utilization review
3
programs shall base reviews solely on the medical information
4
available to the attending physician or ordering provider at
5
the time the health care services were provided.
6

(f) If the Department of Insurance finds that a
7
utilization review program is not in compliance with this
8
Section, the Department shall issue a corrective action plan
9
and allow a reasonable amount of time for compliance with the
10
plan. If the utilization review program does not come into
11
compliance, the Department may issue a cease and desist order.
12
Before issuing a cease and desist order under this Section,
13
the Department shall provide the utilization review program
14
with a written notice of the reasons for the order and allow a
15
reasonable amount of time to supply additional information
16
demonstrating compliance with the requirements of this Section
17
and to request a hearing. The hearing notice shall be sent by
18
certified mail, return receipt requested, and the hearing
19
shall be conducted in accordance with the Illinois
20
Administrative Procedure Act.
21

(g) A utilization review program subject to a corrective
22
action may continue to conduct business until a final decision
23
has been issued by the Department.
24

(h) The Department of Insurance may by rule establish a
25
registration fee for each person conducting a utilization
26
review program.

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1

(i) Upon receipt of written notice that the employer or
2
the employer's agent or insurer wishes to invoke the
3
utilization review process, the provider of medical, surgical,
4
or hospital services shall submit to the utilization review,
5
following accredited procedural guidelines.
6

(1) The provider shall make reasonable efforts to
7

provide timely and complete reports of clinical
8

information needed to support a request for treatment. If
9

the provider fails to make such reasonable efforts, the
10

charges for the treatment or service may not be
11

compensable nor collectible by the provider or claimant
12

from the employer, the employer's agent, or the employee.
13

The reporting obligations of providers shall not be
14

unreasonable or unduly burdensome.
15

(2) Written notice of utilization review decisions,
16

including the clinical rationale for certification or
17

non-certification and references to applicable standards
18

of care or evidence-based medical guidelines, shall be
19

furnished to the provider and employee.
The certification
20

shall be valid for the 3 months immediately after the date
21

on which the employee and health care provider receive the
22

certification or for the length of treatment as determined
23

by the employee's health care provider. If the
24

certification is for a proposed surgery, it shall be
25

inclusive of 3 months of postoperative health care
26

services as clinically indicated by the treating health

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1

care professional or for the length of treatment as
2

determined by the petitioner's treating health care
3

professional, completed by a licensed health care
4

professional.
5

(2-5) A non-certification may be appealed. All appeals
6

shall be reviewed by a physician if the health care
7

services are to be delivered or recommended by a
8

physician. The reviewing physician shall have:
9

(A) a current and valid nonrestricted license in
10

any United States jurisdiction and a current
11

certification by a recognized American medical
12

specialty board and, where applicable, subspecialty
13

board in the area or areas appropriate to the subject
14

of the review; and
15

(B) experience treating and managing patients with
16

the medical condition or disease for which the health
17

care service is being requested.
18

Notwithstanding the provisions of this paragraph, a
19

licensed health care professional who satisfies the
20

requirements of this subsection may make an adverse
21

determination of a service request submitted by a health
22

care professional licensed in the same profession.

23

(3) An employer may only deny payment of or refuse to
24

authorize payment of medical services rendered or proposed
25

to be rendered on the grounds that the extent and scope of
26

medical treatment is excessive and unnecessary in

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1

compliance with an accredited utilization review program
2

under this Section.
3

(4) When a payment for medical services has been
4

denied or not authorized by an employer or when
5

authorization for medical services is denied pursuant to
6

utilization review, the employee has the burden of proof
7

to show by a preponderance of the evidence that a variance
8

from the standards of care used by the person or entity
9

performing the utilization review pursuant to subsection
10

(a) is reasonably required to cure or relieve the effects
11

of his or her injury.
12

(5) The medical professional responsible for review in
13

the final stage of utilization review or appeal must be
14

available in this State for interview or deposition; or
15

must be available for deposition by telephone, video
16

conference, or other remote electronic means. A medical
17

professional who works or resides in this State or outside
18

of this State may comply with this requirement by making
19

himself or herself available for an interview or
20

deposition in person or by making himself or herself
21

available by telephone, video conference, or other remote
22

electronic means. The remote interview or deposition shall
23

be conducted in a fair, open, and cost-effective manner.
24

The expense of interview and the deposition method shall
25

be paid by the employer. The deponent shall be in the
26

presence of the officer administering the oath and

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1

recording the deposition, unless otherwise agreed by the
2

parties. Any exhibits or other demonstrative evidence to
3

be presented to the deponent by any party at the
4

deposition shall be provided to the officer administering
5

the oath and all other parties within a reasonable period
6

of time prior to the deposition. Nothing shall prohibit
7

any party from being with the deponent during the
8

deposition, at that party's expense; provided, however,
9

that a party attending a deposition shall give written
10

notice of that party's intention to appear at the
11

deposition to all other parties within a reasonable time
12

prior to the deposition.
13

An admissible utilization review shall be considered by
14
the Commission, along with all other evidence and in the same
15
manner as all other evidence, and must be addressed along with
16
all other evidence in the determination of the reasonableness
17
and necessity of the medical bills or treatment. Nothing in
18
this Section shall be construed to diminish the rights of
19
employees to reasonable and necessary medical treatment or
20
employee choice of health care provider under Section 8(a) or
21
the rights of employers to medical examinations under Section
22
12.
23

(j) When an employer denies payment of or refuses to
24
authorize payment of first aid, medical, surgical, or hospital
25
services under Section 8(a) of this Act, if that denial or
26
refusal to authorize complies with a utilization review

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1
program registered under this Section and complies with all
2
other requirements of this Section, then there shall be a
3
rebuttable presumption that the employer shall not be
4
responsible for payment of additional compensation pursuant to
5
Section 19(k) of this Act and if that denial or refusal to
6
authorize does not comply with a utilization review program
7
registered under this Section and does not comply with all
8
other requirements of this Section, then that will be
9
considered by the Commission, along with all other evidence
10
and in the same manner as all other evidence, in the
11
determination of whether the employer may be responsible for
12
the payment of additional compensation pursuant to Section
13
19(k) of this Act.
14

The changes to this Section made by this amendatory Act of
15
the 97th General Assembly apply only to health care services
16
provided or proposed to be provided on or after September 1,
17
2011.
18
(Source: P.A. 97-18, eff. 6-28-11.)

19

(820 ILCS 305/12)

(from Ch. 48, par. 138.12)
20

Sec. 12.
An employee entitled to receive disability
21
payments shall be required, if requested by the employer, to
22
submit himself, at the expense of the employer, for
23
examination to a duly qualified medical practitioner or
24
surgeon selected by the employer, at any time and place
25
reasonably convenient for the employee, either within or

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1
without the State of Illinois, for the purpose of determining
2
the nature, extent and probable duration of the injury
3
received by the employee, and for the purpose of ascertaining
4
the amount of compensation which may be due the employee from
5
time to time for disability according to the provisions of
6
this Act. An employee may also be required to submit himself
7
for examination by medical experts under subsection (c) of
8
Section 19.
9

If an employer asks a medical practitioner for an
10
examination of the reasonableness and necessity of the medical
11
services proposed or provided under subsection (a) of Section
12
8, instead of a utilization review under Section 8.7, the
13
examination required under this Section and the report of the
14
examination shall be provided by the medical practitioner to
15
the employee or the employee's representative and the
16
employee's treating health care professional within 90 days
17
after receipt of the request for the examination of the
18
reasonableness and necessity of treatment. The 90-day period
19
begins when the employer receives the medical records from the
20
treating health care professional requesting the medical
21
service. The employer or the employer's representative shall
22
exercise due diligence in requesting and collecting the
23
employee's medical records in accordance with all applicable
24
laws. The medical practitioner who performs the examination to
25
determine the reasonableness and necessity of treatment shall
26
be board certified in the same specialty as the treating

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1
health care professional. If the employer fails to comply with
2
this paragraph after receiving the medical records from the
3
treating health care professional requesting the medical
4
service, there is a rebuttable presumption that the employer
5
shall be responsible for the payment of additional
6
compensation under Section 16 and subsection (l) of Section
7
19. This paragraph applies to the failure to authorize or
8
approve treatment as well as the failure to pay for treatment.

9

An employer requesting such an examination, of an employee
10
residing within the State of Illinois, shall deliver to the
11
employee with the notice of the time and place of examination
12
sufficient money to defray the necessary expense of travel by
13
the most convenient means to and from the place of
14
examination, and the cost of meals necessary during the trip,
15
and if the examination or travel to and from the place of
16
examination causes any loss of working time on the part of the
17
employee, the employer shall reimburse him for such loss of
18
wages upon the basis of his average daily wage. Such
19
examination shall be made in the presence of a duly qualified
20
medical practitioner or surgeon provided and paid for by the
21
employee, if such employee so desires.
22

In all cases where the examination is made by a surgeon
23
engaged by the employer, and the injured employee has no
24
surgeon present at such examination, it shall be the duty of
25
the surgeon making the examination at the instance of the
26
employer to deliver to the injured employee, or his

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1
representative, a statement in writing of the condition and
2
extent of the injury to the same extent that said surgeon
3
reports to the employer and the same shall be an exact copy of
4
that furnished to the employer, said copy to be furnished the
5
employee, or his representative as soon as practicable but not
6
later than 48 hours before the time the case is set for
7
hearing. Such delivery shall be made in person either to the
8
employee or his representative, or by registered mail to
9
either, and the receipt of either shall be proof of such
10
delivery. If such surgeon refuses to furnish the employee with
11
such statement to the same extent as that furnished the
12
employer said surgeon shall not be permitted to testify at the
13
hearing next following said examination.
14

If the employee refuses so to submit himself to
15
examination or unnecessarily obstructs the same, his right to
16
compensation payments shall be temporarily suspended until
17
such examination shall have taken place, and no compensation
18
shall be payable under this Act for such period.
19

It shall be the duty of surgeons treating an injured
20
employee who is likely to die, and treating him at the instance
21
of the employer, to have called in another surgeon to be
22
designated and paid for by either the injured employee or by
23
the person or persons who would become his beneficiary or
24
beneficiaries, to make an examination before the death of such
25
injured employee.
26

In all cases where the examination is made by a surgeon

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1
engaged by the injured employee, and the employer has no
2
surgeon present at such examination, it shall be the duty of
3
the surgeon making the examination at the instance of the
4
employee, to deliver to the employer, or his representative, a
5
statement in writing of the condition and extent of the injury
6
to the same extent that said surgeon reports to the employee
7
and the same shall be an exact copy of that furnished to the
8
employee, said copy to be furnished the employer, or his
9
representative, as soon as practicable but not later than 48
10
hours before the time the case is set for hearing. Such
11
delivery shall be made in person either to the employer, or his
12
representative, or by registered mail to either, and the
13
receipt of either shall be proof of such delivery. If such
14
surgeon refuses to furnish the employer with such statement to
15
the same extent as that furnished the employee, said surgeon
16
shall not be permitted to testify at the hearing next
17
following said examination.
18
(Source: P.A. 94-277, eff. 7-20-05.)

19

Section 99.
Effective date.
This Act takes effect upon
20
becoming law.

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