a)
Employers Required to Make Payments to Rate Adjustment Fund and Second Injury
Fund
Any employer who shall come within the provisions of Section 3
of the Act or any employer who shall elect to provide and pay the compensation
provided for in the Act and the Workers' Occupational Diseases Act
[820 ILCS
310 ] shall pay into the Rate Adjustment Fund and the
Second Injury Fund in accordance with the provisions of Section 7(f) of the
Act.
b) Penalties
1)
If the Commission finds, after
reasonable notice and hearing in accordance with subsection (e),
that an employer or insurance carrier on behalf of the employer has
willfully and knowingly failed to pay any obligations accruing after December
18, 1989 into the Rate Adjustment Fund or the Second Injury Fund as required by
Section 7(f) of the Act or if such payments are not made within the time
periods prescribed by Section 7(f) of the Act, the employer shall, in addition
to such payments, pay a penalty of 20% of the amount required to be paid or
$2,500, whichever is greater, for each year or part thereof of such failure to
pay. (Section 7(f) of the Act)
2) Obligations Accruing Prior to December 18,
1989
A)
Any obligations of an employer
or insurance carrier to the Rate Adjustment Fund or the Second Injury Fund
accruing prior to December 18, 1989 shall be paid in full by such employer
within 5 years of December 18, 1989, with at least one-fifth of such obligation
to be paid during each year following December 18, 1989. (Section 7(f)
of the Act)
i) Such obligations shall be paid
pursuant to an agreement signed by the employer or by the insurance carrier on
behalf of the insured employer.
ii)
The agreement shall include the amount of the obligation and the date each
payment is due.
B)
If the Commission finds, after reasonable notice and hearing
in accordance with subsection (e), that an employer or insurance
carrier has failed to make timely payments of any obligation accruing
under subsection (b)(2)(A), the employer shall, in addition to all
other payments required, be liable for a penalty equal to 20% of the overdue
obligation or $2,500, whichever is greater, for each year or part thereof, that
the obligation is overdue. (Section 7(f) of the Act)
3)
The Commission may for
good cause shown waive all or part of any penalty assessed. The
decisions of the Commission under Section 7(f) of the Act shall serve as
precedents in determining good cause.
c) Verification of Amounts Paid by Employers
into the Rate Adjustment Fund and Second Injury Fund
1)
The Chairman shall by May
1 of each year furnish to the Director of the Illinois Department of
Insurance a list of the amounts paid into the Second Injury Fund and the Rate
Adjustment Fund by each insurance company on behalf of their insured employers.
The Director shall verify to the Chairman on or before September 1 of
each year that the amounts paid by each insurance company are accurate
as best as the Director can determine from the records available to the
Director.
2)
The
Chairman shall verify that the amounts paid by each self-insurer are accurate
as best as the Chairman can determine from records available to the
Chairman. (Section 7(f) of the Act) The Chairman may, upon written
notice, require that each self-insurer provide the following:
A)
Information on forms
provided by the Commission concerning the total compensation payments
made upon which contributions to the Rate Adjustment Fund and Second Injury
Fund are predicated, and
B)
Any additional information
establishing that payments have been made into the Rate Adjustment Fund and the
Second Injury Fund. (Section 7(f) of the Act) Such additional
information shall include, but not be limited to, cancelled checks or other
proof of payment.
3) Any
information requested under subsection (c)(2) shall be provided to the
Commission by the self-insurer within 30 calendar days after the date of the
notice.
d) Notice of
Deficiency - Informal Conference
1) Notice of
Deficiency
A) When the records of the
Commission or the Department of Insurance show that a deficiency exists
regarding payment into the Rate Adjustment Fund or the Second Injury Fund, the
Commission shall give notice of the deficiency to the insurance carrier or the
self-insured employer. Service of the Notice of Deficiency shall be by United
States registered or certified mail, addressed to the insurance company or the
self-insured employer at the last known address, or to a representative
thereof, and to the State Treasurer as ex-officio Custodian of the Rate
Adjustment Fund and the Second Injury Fund.
B) The Notice of Deficiency shall be a
written statement setting forth, but not limited to, the following information:
i) the name and address of the insurance
carrier, or the self-insured employer or representative;
ii) a statement of the statute alleged to be
violated, the dates of non-payment or underpayment, the amount of deficiency
and the penalty that may be imposed;
iii) a statement that the self-insured
employer or insurance carrier must cure the deficiency or otherwise respond in
writing within 30 calendar days after the receipt of the Notice of Deficiency;
and
iv) a statement that the
failure to respond to a Notice of Deficiency within the prescribed time period
shall cause the Commission to set the matter for hearing in accordance with
subsection (e).
2) Informal Conference
A) When a Notice of Deficiency has been sent,
the Commission may, at the request of the self-insured employer or insurance
carrier, or on its own initiative, schedule the matter for an informal
conference at which a designated representative of the Commission shall meet
with the self-insured employer or the insurance carrier in an attempt to
resolve the matter. An informal conference will not be scheduled when the
self-insured employer or the insurance carrier cures the deficiency within 30
calendar days after receipt of the Notice of Deficiency.
B) A request by the self-insured employer or
the insurance carrier for an informal conference shall be included in the
response to the Notice of Deficiency.
C) The Commission shall send written notice
of the time and place of the conference to the self-insured employer or the
insurance carrier and State Treasurer as ex-officio Custodian of the Rate
Adjustment Fund and the Second Injury Fund at least 15 calendar days prior to
the scheduled conference.
D) The
conference shall be held at a site designated by the Commission.
E) If the matter cannot be resolved at the
conference, the Commission shall set the matter for hearing in accordance with
subsection (e).
e) Hearings
1) Notice of Hearing - Locations
A) Any matter under this Section is commenced
by the Commission by serving a Notice of Hearing upon the insurance carrier or
self-insured employer, and the State Treasurer as ex-officio Custodian of the
Rate Adjustment Fund and the Second Injury Fund. Notice of Hearing shall be
given at least 30 calendar days prior to the time fixed for hearing. Service of
the Notice of Hearing shall be by United States registered or certified mail,
addressed to the insurance carrier or the self-insured employer at the last
known address, or to a representative thereof, and to the State Treasurer as
ex-officio Custodian of the Rate Adjustment Fund and the Second Injury
Fund.
B) The Notice of Hearing
shall be a written statement setting forth, but not limited to, the following
information:
i) the name and address of the
insurance carrier or self-insured employer;
ii) the time, date and place of
hearing;
iii) the name of the
hearing Commissioner;
iv) a
statement of the statute alleged to be violated and the penalty that may be
imposed;
v) a statement of the
amount of the deficiency and the dates of non-payment or
underpayment;
vi) a statement that
failure to appear at the hearing, when no continuance has been obtained from
the Commissioner prior to the hearing, shall constitute a default and will
result in a finding that there has been a willful and knowing failure to comply
with Section 7(f) of the Act, and an assessment of penalties.
C) The hearing shall be set at a
site designated by the assigned Commissioner.
2) Assignment
A) In cases in which the employer is
principally located in Cook County, a matter to be scheduled for hearing under
this Section shall be randomly assigned to a Commissioner.
B) In all other cases, a matter to be
scheduled for hearing under this Section shall be assigned to a Commissioner
who serves the territory within which the employer is principally
located.
3) Conduct of
Hearings
A) A representative of the Commission
shall have the opportunity to introduce evidence, to call and examine
witnesses, and to cross-examine witnesses. The records of the Commission and
the Department of Insurance regarding deficiency in payment shall be considered
prima facie evidence of failure to comply with Section 7(f) of the
Act.
B) At the hearing, the
insurance carrier or self-insured employer, or its attorney, shall be given the
opportunity to rebut the evidence of deficiency.
C) Any party, including the State Treasurer
as ex-officio Custodian of the Rate Adjustment Fund and the Second Injury Fund,
shall have the right to introduce evidence, to call and examine witnesses and
to cross-examine witnesses. The representative of the Commission shall have the
right of rebuttal.
D)
The
Commission, or any member thereof, shall have the power to administer oaths, to
subpoena and examine witnesses and to issue subpoena duces tecum requiring the
production of such books, papers, records or documents as may be evidence to
determine the issue of non-compliance. (Section 16 of the
Act)
E) The Illinois Rules of
Evidence and Article VIII of the Code of Civil Procedure [
735 ILCS 5/Art.
VIII ] shall apply at the hearing except to the extent
they conflict with the Act, the Workers' Occupational Diseases Act
[
820 ILCS
310 ], and the Rules governing practice before the
Illinois Workers' Compensation Commission (50 Ill. Adm. Code
9010 through
9500).
f)
Decision
The Commission, after the hearing is concluded, shall issue a
decision in accordance with Section 7(f) of the Act, which shall
include:
1) the findings of the
Commission;
2) when applicable, the
amount of the penalty assessed and the basis for the amount;
3) the payment procedures provided in
subsection (g);
4) a statement of
the conditions for a judicial review of the Commission decision in accordance
with the requirement of 50 Ill. Adm. Code
9060.
g) Payment Procedure
When the Commission assesses a penalty against an employer in
accordance with Section 7(f) of the Act, payment shall be made according to the
following procedure:
1) payment of the
penalty shall be made by certified check or money order made payable to the
State of Illinois.
2) payment shall
be mailed or presented within 30 calendar days after issuance of the final
order of the Commission or the order of the court on review after final
adjudication to:
Illinois Workers' Compensation Commission
Fiscal Office
69 West Washington Street
Suite 900
Chicago, Illinois 60602
(312) 814-6500