Senate Democrats made good Friday on their pledge to pick apart the workers’ compensation system at the behest of Republican Gov. Bruce Rauner, but the measures they approved brought only derision from the GOP.
Majority Democrats endorsed one proposal that would require companies writing workers’ compensation insurance to get state approval for the rates they charge, and another that creates a nonprofit company – with government oversight – to write competitive policies.
A Progressive Era reform, Illinois was on the ground floor when it adopted the law in 1912. Workers previously had little recourse if they were hurt on the clock. Workers’ compensation created limited liability for employers and set speedy payment for an injured worker who agreed to forgo an uncertain court remedy.
Rauner has made cost-cutting workers’ comp changes a must before he’ll agree to an annual budget – something Illinois has been without for two years, longer than any state in modern history. Frustrated Democrats say they’re making major concessions because they overhauled the compensation system in 2011.
Rauner’s demand for workers’ comp reform goes back to when he was a gubernatorial candidate. After he became governor, Democrats told him their 2011 changes meant that medical and replacement-wage payments in Illinois dropped 20 percent, to $1.33 billion, from 2011 to 2015, according to the National Council on Compensation Insurance , an industry observer. Quoting state statistics, the Midwest Region of the Laborers’ International Union of North America reports that insurance premiums that Illinois employers pay for workers’ compensation coverage have gone up nearly 15 percent.
An expert, Democratic Rep. Jay Hoffman of Swansea, notes that NCCI has recommended a 29 percent reduction in workers’ comp insurance rates during the past seven years. But there’s no requirement that companies adopt lower rates.
A Hoffman-initiated measure sponsored by Chicago Democratic Sen. Kwame Raoul requires state Insurance Department-approved rates based on market need. It won approval 32-20 but must return to the House for concurrence. The other measure, sponsored by Glenview Democratic Rep. Laura Fine and Evanston Democratic Sen. Daniel Biss, creates a nonprofit insurance company – with oversight from a government board – to push down rates by competing for policies like ones in other states. That proposal now heads to Rauner.
Senate Republicans derided the workers’ compensation legislation as “delay” and “distraction” but not “reform.” Rauner’s office declined comment. The Illinois Manufacturers’ Association issued a statement in opposition.
Republicans want arbitrators who determine awards to solely consider American Medical Association guidelines addressing “impairment.” Currently, an arbitrator may consider a worker’s age, occupation, future earning capacity and other factors. Using only AMA, Democratic Senate President John Cullerton of Chicago says a bus driver and a concert pianist who both lose a finger would get the same award.
Mark Denzler, vice president of the Illinois Manufacturers’ Association, says his organization’s compromise was that AMA guidelines be the sole guide unless a preponderance of evidence calls other factors into play. He says applying AMA guidelines provides for fair, clearly delineated compensation decisions.
There’s now a cost-saving, GOP-proposed list outlining eligible prescription drugs. A Republican suggestion speeds up the process for injured first responders. It includes a Rauner-recommended change that allows a company or worker to forgo the cost of an injury report.
(The bills are HB2622 and HB2225.)
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