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Eliminating The "Double Dip" In Police And Fire
Work Related Injuries Or Illnesses
Implementing the Winnetka v. Industrial Commission Decision
By MARTIN J. BOURKE, Village Manager, Village of Western Springs
Background
As we all know, the primary legislative initiative that
is being undertaken by the Illinois Municipal League
this year is the passage of legislation preventing unfunded State mandated programs from being imposed
on municipalities. Unfunded mandates are particularly
onerous to municipalities when they are compounded
by tax caps and ever increasing personnel related costs.
While I am confident that the IML will be successful in
curbing mandates, it appears that tax caps are here to
stay. That leaves municipalities to aggressively look for
cost savings in many service areas, including personnel
costs. While insurance and pension coverages are a
large component of personnel costs, there remains a
cost saving measure in this area that has not been
pursued by many municipalities to date.
Currently, Illinois police officers and firefighters
have triple remedies arising out of the Illinois Workers'
Compensation Act (80 ILCS 305/1), the Illinois Pension
Code (40 ILCS 5/3-114.1, 5/4-110 and 5/22-306), and
the Illinois Public Employee Disability Act (5 ILCS
345/1). The Illinois Public Employee Disability Act, in
particular, provides for one year of continuing pay for
injuries suffered in the line of duty. While the employer
must pay for all medical costs and pay the injured or ill
employee full salary while the employee is not able to
work in the first year, it is common practice for the
employer to collect full reimbursement of medical
costs and partial reimbursement of full salary (66-2/3%)
from their workers' compensation insurance carrier or
governmental risk management pool. Double recovery
or "double dipping" occurs, however, when a police
officer or firefighter receives a workers' compensation
permanent partial or total disability award plus a duty
related disability pension. As we know, compensation
awards can range from the low thousands to hundreds
of thousands of dollars while lifetime disability pensions can easily exceed $500,000.00. To make matters
worse, municipalities are now finding that a decision to
grant an award by the Illinois Industrial Commission
may be binding upon the local police or fire pension
board in determining whether or not a disability is
warranted. Similarly, a decision by the local pension
board in determining whether or not a disability pension is warranted may be binding upon the Illinois
Industrial Commission.
The Winnetka v. Industrial Commission Decision
Although it is well established that Illinois municipalities must extend relief to police officers and firefighters who incur a work related injury or illness, a part
of the Pension Code provides that common law or
statutory rights of those same employees to the benefits
of the workers' compensation system are barred whenever any municipality enacts an ordinance pursuant to
Section 22-306 and 22-307 of the Pension Code. The
ordinance to which the reference is made allows a municipality to secure and provide proper medical care
and hospital treatment for any such police officer or
firefighter injured in the line of duty. The medical care
and hospital treatment would be provided outside the
workers' compensation system.
The Village of Winnetka, seeking to deal with "double recovery or double dipping," enacted an ordinance
in accordance with Section 22-306 and 22-307 of the
Pension Code. When a Winnetka firefighter was subsequently injured in the line of duty, his pay was provided
by the Village and his medical expenses were paid by
the Village's self-insured group health program. The
firefighter was also tentatively awarded compensation
for his injuries under the Workers' Compensation Act
by the Illinois Industrial Commission. The Village appealed the award and a trial court's judgment which
were in the firefighter's favor to the Illinois Appellate
Court. The Appellate Court upheld the Village's ordinance and reversed the workers' compensation award.
The Illinois Supreme Court has refused to hear the case,
so the Appellate Court's decision is final. As a result, it
now appears that enactment of a "Winnetka type" ordinance by any municipality would foreclose the ability
of a police officer or firefighter to obtain relief under
the Workers' Compensation Act.
The Aftermath of the Winnetka Decision
Since the decision of the Supreme Court not to hear
the appeal of the Winnetka v. Industrial Commission
case, only a few municipalities have enacted a "Winnetka type" ordinance. While there has been legislation
introduced in the Illinois State Legislature to alter the
Statutes in order to effectively overturn the Appellate
Court's decision, none of this proposed legislation has
moved out of the legislative committees in the House or
Senate. With the recent change in the ideological complexion of the Legislature, new legislation that would
April 1996 / Illinois Municipal Review / Page 25
effectively overturn the Appellate Court decision is not
foreseen in the near future. With these facts in mind,
why have additional municipalities not adopted a
"Winnetka type" ordinance? In an effort to answer this
question, many northeastern Illinois municipalities
turned to their risk management pool, the Intergovernmental Risk Management Agency (IRMA).
Winnetka is Reviewed For Municipalities
IRMA is an intergovernmental agency founded and
operating pursuant to the Illinois Intergovernmental
Cooperation Act and contains 65 municipal members
representing 1,000,000 residents and 10,000 employees.
IRMA researched the implications of the Winnetka v.
Industrial Commission decision upon other municipalities and made some interesting discoveries. It was determined that many municipalities were not aware of
the Winnetka decision. Even municipalities that were
aware of the decision were confused as to the full ramifications of enacting a "Winnetka type" ordinance. It
was also discovered that several municipalities had
signed labor agreements that they believed would exclude them from enacting a "Winnetka type" ordinance. On the other hand, some municipalities did not
have organized police officers or firefighters and some
labor agreements did not specifically preclude the employer from enacting a "Winnetka type" ordinance.
A written opinion from the Illinois Department of
Insurance was also obtained that stated that if workers'
compensation coverage was not available to police
officers and firefighters due to the enactment of a
"Winnetka type" ordinance, a group health carrier in
Illinois must provide full medical coverage for any
work related injury or illness, regardless of what the
group health policies may state to the contrary.
Finally, it was estimated that the municipalities who
are members of IRMA would have saved in excess of
$600,000.00 in 1994 alone if all had enacted a "Winnetka
type" ordinance in 1993.
Not surprisingly, the IRMA membership has proceeded to provide a new line of coverage along with the
legal expertise necessary that would assist municipalities in taking advantage of the potential cost savings in
adopting a "Winnetka type" ordinance.
A New Program is Designed for Municipalities
IRMA has designed and will shortly implement a
new coverage for work related injuries and illnesses for
police officers and firefighters. This new coverage will
be added to IRMA's self-insured program with excess
insurance provided by the current workers' compensation carrier. The claims procedures for medical bills
and temporary disability payments to police officers
and firefighters will not change. It was believed to be
very important to the members' administrations and the
employees that the change in coverage would be indistinguishable from the current workers' compensation
coverage. A model ordinance has been drafted for
adoption by all interested municipalities which has
been accompanied by lower premium costs for municipalities who adopt the model ordinance. Future premium costs will be determined by claims experience,
which is always the most important aspect of municipal
pooling. The membership of IRMA has also agreed to
provide defense for any member municipality who
chooses to adopt the model ordinance and is sued for
failure to provide workers' compensation coverage.
To learn more about the Winnetka decision and the
new program, a copy of a Committee report can be
obtained by calling the Village Manager's Office in
Western Springs at 847/246-1800. •
Page 24 / Illinois Municipal Review / April 1996
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