24/7
Call Today:
(312) 609-0400
Call Us For Free Consultation
Call Today

Demand For Reforms To Reduce Workers’ Compensation Insurance Costs

Posted On October 10, 2016

Business groups in Illinois are, again, calling for additional reforms to reduce workers’ compensation insurance costs. Unfortunately, these critiques are the same issues that business groups take every time they demand reforms. Business groups continue to advocate for the same reforms while insurance premiums and medical fees continue to rise.

Illinois is the seventh-most expensive state for workers’ compensation costs. To address these continued costs, business groups propose to force workers to shoulder the burden of reform.

(Article continues below Infographic)

Reduce workers' comp insurance costs infographic

______

Former Reform Efforts

In 2011, Illinois state lawmakers passed a series of broad-ranging reforms to the workers’ compensation system. The stated hope was that it would save, at a minimum, $500 million a year in insurance and medical costs. It was believed that the medical fees and fraud were the primary culprits in runaway workers compensation costs.

The 2011 reforms were met to usher in a new workers’ compensation system that was cheaper and more efficient. One of the hallmarks was the removal of the majority of the arbitrators from the Illinois Workers’ Compensation Commission.

It was believed that these arbitrators were too close to the attorneys who represented workers and therefore were unable to render impartial decisions. The 2011 reforms also capped the money that workers could receive for carpal tunnel and other injuries/syndromes that require workers to get new jobs for less pay.

Furthermore, arbitrators use a new review process that instills standardization in the type and amount of treatment that injured workers can receive.

However, the majority of the cost savings came from a 30 percent reduction in fees that pharmacies, doctors, and hospitals could receive for treating workers. The proponents estimated it would save $500 million, in reality, it only saved Illinois employers about $315 million.

These reforms, in short, placed the vast majority of the burden of cost reduction on the workers, rather than on business groups. Moreover, these reforms had, at best, a modest effect on workers’ compensation costs. But, regardless of these modest changes, business groups continue to insist that workers bear the burden of reform.

The Politics

It appears that business groups may be able to force the changes they request. Governor Bruce Rauner (Republican) was elected with workers’ compensation reform as one of the pillars of his campaign. Gov. Rauner proposed a series of pro-business reforms including:

  • Scaling back the power of union;
  • Limiting damages in civil lawsuits;
  • Ending prevailing wages; and
  • Workers’ compensation reform.

It is believed that the Democrats and their supporters, unions and trial attorneys, can block many of these proposals. However, it is likely that workers’ compensation, which has already undergone reform, may go through additional changes. Many lawmakers believe that there is further room for negotiation and reform.

Democratic House Speaker, Michael Madigan, convened a chamber committee to hear testimony on workers’ compensation reform.

Proposed Reforms

Governor Rauner proposed numerous changes, including:

  • Granting arbitrators the ability to rely on guidelines from the American Medical Association (largely believed to be more conservative than other measurements) to determine how much a worker is paid;
  • Toughen standards that workers must meet to prove their injury happened on the job;
  • Toughen the standard of proof for workers to qualify for workers’ compensation;
  • Significantly decrease the reimbursement rates for doctors, pharmacies, and hospital that treat injured workers; and
  • Lessen the ability of workers to claim coverage for an injury sustained traveling to or from work.

These reforms all place additional burdens on injured workers, rather than force business groups to absorb some of the cost.

The Opposition

Opponents argue that more time is needed for the 2011 reform to have an effect. They point out that the Governor is merely trying to weaken his political opponents, the unions, for the benefit of his supporters, corporate bosses.

Moreover, opponents argue that the savings from the reforms aren’t being passed onto the clients, businesses, but are instead being retained by the insurance companies who are allowed to set their rates. Opponents argue that more time is needed before workers surrender more of their rights.

Increasing Standard of Proof

The primary reform effort is focused on increasing the standard of proof for employees to collect workers’ compensation.

Currently, employees need only prove that their injury “arise out of” and “in the course of” employment. Businesses argue that this means they are responsible for every injury, no matter how incidental to their job.

However, these reforms will drastically increase the litigation costs on workers. Moreover, it introduces uncertainty into the workers’ compensation system. Workers, who are already dealing with their injuries, under these reforms, are forced to litigate whether or not their injury is sufficiently connected to their work. Workers’ compensation was enacted to protect workers, not businesses. Further erosion of worker rights could significantly burden employees and their families.

Get A Free
Consultation:

If you, or a loved one, have been injured at work or in an accident, contact our office today at (312) 609-0400 to schedule a free consultation.

We want to earn your business.