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The state unit that handles compensation claims for injured workers has concluded that Illinois short-changed at least
some beneficiaries and their heirs, and that it did so for as long as a stunning 30 years.
Neither the Workers' Compensation Commission nor anyone else in state government is yet saying how much the snafu might
cost Illinois employers, who will have to make up any shortfall. But the money apparently is owed, and industry sources
say the final tab could top $100 million.
Word of the potentially very expensive mistake surfaced the day before Thanksgiving when Susan Piha, the commission's
manager of research and education, emailed a variety of interested parties to inform them that the commission "is
searching for lost beneficiaries" to its rate-adjustment fund.
The fund was created in the 1970s by the General Assembly to pay cost-of-living adjustments to individuals have been
found permanently or totally disabled, or to their survivors. Basic, non-inflation-adjusted payments are paid directly
by employers or insurance companies, but beneficiaries and heirs are supposed to get a second COLA check from the state,
which funds it via employer assessments.
At some point since Gov. Rod Blagojevich became governor - the timing is a little fuzzy - someone notified the
administration, Auditor General Bill Holland and Illinois Comptroller Dan Hynes that not everyone may be getting the
correct amount from the state.
"The situation appears to have existed throughout the past 30 years," Ms. Piha's email said. "Most of the situation
appears to have occurred in the late 1980s and early 1990s, when the fund experienced chronic funding shortages. The
legislature increased the employer assessment several tines and authorized loans from other state funds but during that
time people may not have been paid their proper COLA."
Ms. Piha said there is no way to tell how many people are owed how much, because some potential claimants may have
secured new jobs, and the children of others now may have new parents, because of divorce and/or death and remarriage.
Ms. Piha says the commission has revamped its procedures and believes that, in fiscal 2009, the commission "paid
beneficiaries appropriately." But that leaves a 30-year backlog of claims.
Meanwhile, this is the last thing needed by a state government that's already billions of dollars in the hole.
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Oops!