Workers’ Compensation Reform Must Start with the Insurance Industry
By Perry J. Browder
In 2011, at the urging of the state’s leading business organizations, bipartisan majorities of Illinois lawmakers approved a workers’ compensation “reform” law aimed at reducing costs for Illinois employers. It forced workers to forfeit long-standing rights in exchange for insurance companies being transparent with pricing and passing savings along to employers in the form of rate reductions. Unfortunately, the insurance companies have not held up their end of the bargain.
Cries from Governor Rauner and his big business and insurance industry supporters for more so-called “reforms” will only further undercut the rights of injured workers while boosting insurance industry profits and shifting even more risk and burden onto taxpayers. Lawmakers should reject the governor’s race-to-the-bottom policies that benefit the wealthy few at the expense of nearly all Illinoisans.
The cost of workers’ compensation is indeed declining steadily for Illinois employers and, especially so, for the insurance companies writing those policies. As the Illinois Workers’ Compensation Commission stated in its FY 2014 report, Illinois employers experienced the largest decrease in workers’ comp premiums among all states. And the commission anticipates further savings once the full effects of the 2011 workers’ comp overhaul are felt.
As for insurers, the IWCC said they enjoyed a 19 percent decrease in loss costs (benefit payments) between 2011 and 2015. And according to a 2015 report from the Illinois Department of Insurance, profits within the state’s workers’ comp sector have steadily grown since 2010. The “long term trend indicates an overall improvement in both profits and loss ratio within the workers’ compensation market in Illinois,” the agency concluded.
The truth is that the 2011 law – those changes sought by the business community, and which were largely to the detriment of men and women injured on the job due to no fault of their own – is producing the desired result: lower costs for insurance companies and employers.
Dependence on food stamps and reliance on public health care programs should not be the fate for Illinoisans injured at work. Insurance companies would have the public believe that the state’s workers’ compensation system is too generous toward the interests of injured workers, but in fact, it’s all that’s standing between those men and women – many of whom may no longer work due to their injuries – and a life of poverty.
Insurance companies are taking advantage of both workers and employers. Illinois lawmakers should instead examine insurance companies’ lack of transparency and cooperation with the law they accepted in 2011.
No matter how many benefits are cut, medical reimbursements are lowered, and claims are denied, the state’s businesses won’t see corresponding savings without our leaders addressing the promises previously broken by the insurance industry. Strictly regulating insurance premiums, not further curtailing injured workers’ rights, is the key to managing employers’ workers’ compensation costs.
Perry J Browder is the President of the Illinois Trial Lawyers Association