Workers’ compensation laws in Illinois govern the entitlements, requirements and administration associated with Chicago workers’ compensation. Recently adding to the body of related laws in the state, the Illinois state legislature passed the Illinois Workers’ Compensation Insurance Fund Act. The Act created the Illinois Workers’ Compensation Insurance Fund. Injured workers in Chicago may have recourse to this workers’ compensation fund in the event of a workplace injury.

Purpose of the Workers’ Compensation Insurance Fund

The IWCIF provides insurance for employers in the state of Illinois against liability for injured workers. Workers’ compensation claims are administered through the Illinois Workers’ Compensation and Occupational Diseases Act. When workers are injured during and in the course of employment, they may file an Application for Adjustment of Claim with the Illinois Workers’ Compensation Commission. Successful claimants receive compensation for damages related to the workplace injury, such as lost wages and medical costs.

How the Fund works

In a general sense, the IWCIF works similarly to other financial intermediaries: collecting funds and then distributing them. The funds that the IWCIF collects are insurance premiums and penalties received from Illinois employers. Premiums are sourced through prearranged coverage agreements between the IWCIF and the employer. Penalties are assessed on employers who fail to comply with Chicago workers’ compensation laws.

As with private insurance companies, the IWCIF deposits some of the funds collected, for use in paying current claims. The rest of the funds collected are invested, which helps to generate earnings that will increase the amount of funds available for paying later claims. In addition to costs associated with covering insured events, the funds collected from employers pay the operating expenses associated with managing the compensation fund.

The funds are distributed to eligible recipients of Chicago workers’ compensation benefits under the state’s Workers’ Compensation Act. For example, if an employer is insured through the IWCIF, and one of the employer’s workers sustains a workplace injury, the IWCIF may pay the injured worker any compensation awarded through a successful claim.

Governance of the fund

The Act creating the IWCIF stipulates that it be run as an efficient insurance company. The Department of Insurance acts as its supervisor. In that capacity, the department’s director appoints five people to serve on the fund’s board of directors.

The board members serve four-year terms and one of them serves as the chair. The board appoints a manager of the fund, as well as other necessary officers and employees. The fund is regulated as a mutual insurer, and it is subject to the same provisions under the Illinois Insurance Code.