Key Takeaways
- Illinois workers' compensation is MANDATORY for nearly all employers with limited exceptions
- The Illinois Workers' Compensation Commission (IWCC) administers the system
- Benefits include medical care, temporary total disability (TTD), permanent partial disability (PPD), and death benefits
- Employers can obtain coverage through private insurance, self-insurance, or group self-insurance
- Illinois uses an exclusive remedy doctrine—workers' comp is the sole remedy for workplace injuries
Last updated: January 2026
Illinois Workers' Compensation Insurance
Illinois has a mandatory workers' compensation system—unlike Texas, coverage is REQUIRED for most employers.
Mandatory Coverage
Illinois workers' compensation is mandatory for most employers:
Coverage Requirements
| Employer Type | Coverage Required |
|---|---|
| Most private employers | Required |
| State employees | Required |
| Local government | Required |
| Agricultural employers | Limited exemption |
| Domestic workers | Limited exemption |
| Some sole proprietors | May opt out |
Limited Exemptions
- Agricultural employers with small operations
- Domestic workers in some circumstances
- Some sole proprietors/partners without employees
- Real estate brokers (commissioned only)
Exam Tip: Illinois is NOT like Texas. Workers' compensation is MANDATORY in Illinois for almost all employers.
Illinois Workers' Compensation Commission (IWCC)
The IWCC administers the workers' compensation system:
IWCC Functions
| Function | Description |
|---|---|
| Adjudication | Resolves disputed claims |
| Mediation | Offers mediation services |
| Rate Approval | Works with NCCI on rates |
| Regulation | Oversees system compliance |
| Self-Insurance | Approves self-insurance applications |
Claim Process
- Injury occurs - Employee reports to employer
- Employer reports - Files with insurer within 45 days
- Benefits paid - If compensable
- Disputes - Resolved by IWCC arbitrators
- Appeals - To IWCC Commission, then courts
Obtaining Coverage
Illinois employers have options for workers' compensation coverage:
Coverage Options
| Option | Description |
|---|---|
| Private Insurance | Purchase from admitted insurer |
| Assigned Risk Pool | For employers unable to obtain voluntary coverage |
| Self-Insurance | Large employers may self-insure with IWCC approval |
| Group Self-Insurance | Trade associations can pool |
Assigned Risk Pool
- NCCI administers in Illinois
- For employers unable to obtain voluntary market coverage
- Higher rates than voluntary market
- Coverage guaranteed
Benefits
Workers' compensation provides these benefits:
Benefit Types
| Benefit | Description |
|---|---|
| Medical Care | All reasonable and necessary medical treatment |
| Temporary Total Disability (TTD) | 66 2/3% of average weekly wage |
| Temporary Partial Disability (TPD) | 66 2/3% of wage difference |
| Permanent Partial Disability (PPD) | Based on scheduled injuries or wage loss |
| Permanent Total Disability (PTD) | 66 2/3% of AWW for life |
| Death Benefits | To surviving spouse and dependents |
Waiting Period
- 3 calendar days before income benefits begin
- If disability exceeds 14 days, benefits paid from first day
- Medical benefits from day one
Maximum Weekly Benefits
- Set annually by IWCC
- Based on statewide average weekly wage
- Minimum benefits also apply
Exclusive Remedy
Illinois follows the exclusive remedy doctrine:
What It Means
- Workers' comp is the SOLE remedy for work injuries
- Employees cannot sue employer for negligence
- Trade-off: employees get guaranteed benefits, employers get liability protection
- Exceptions: intentional harm, dual capacity
Exceptions to Exclusive Remedy
- Employer intentionally caused injury
- Employer operated without required coverage
- Third-party lawsuits (equipment manufacturers, etc.)
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Test Your Knowledge
Is workers' compensation insurance mandatory for private employers in Illinois?
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B
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D
Test Your Knowledge
What is the Temporary Total Disability (TTD) benefit rate in Illinois?
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B
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D