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Raoul, Biss pass workers’ comp reforms to streamline system, secure savings

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Two measures designed to reform Illinois' workers' compensation system passed in the Illinois Senate today, building on improvements made in 2011 and addressing oversight of insurers, identified as a need in the years since the 2011 reforms.

Commitment to workers' rights

State Senator Kwame Raoul (Chicago 13) secured passage of legislation that streamlines the state’s workers’ compensation system while keeping valuable protections in place.

“We refuse to participate in a race to the bottom when it comes to workers’ compensation rights,” Raoul said. “We have addressed this issue before with great success. Although we can always look for ways to reform workers’ compensation, we must also maintain Illinois’ longstanding commitment to workers’ rights.”

Today’s measure makes several changes to the House’s workers’ compensation reform plan, including: capping the time awarded for repeated injuries to the same part of the spine at 500 weeks, allowing first responders to receive benefits the day after their accident, creating an evidence-based prescription drug formulary and establishing reasonable rates for procedures performed at Ambulatory Service Centers.

raoul 020917Raoul worked with the Illinois Manufacturer’s Association and other stakeholders on the Senate’s overhaul of the workers’ compensation program in 2011. Since then, Illinois employers have saved more than $315 million in workers compensation premiums. The measure includes a provision empowering the Department of Insurance to ensure savings from these and past reforms are passed on to employers.

Key components of the measure include:

  • clarification that an AMA impairment report is not required in order to award benefits or reach a settlement, although a report may be utilized when reaching a decision.
  • penalties for unreasonable delay in authorizing medical treatment.
  • classification of hip and shoulder injuries as leg and arm injuries, respectively.
  • requirements for employers and insurers to accept electronic claims by June 30, 2017.

These reforms are the result of bipartisan, bicameral negotiations over the past year. Several of the provisions in the legislation reflect recommendations from the governor, including controlling money spent on prescription drugs and clarifying the use of AMA guidelines.

 

Biss legislation would lower employer costs, improve worker safety

Rather than curb Illinois’ workers’ compensation costs on the backs of injured workers, Senate Democrats voted Friday to clear the way for savings through the natural effects of competition and the free marketplace.

House Bill 2622, sponsored by Senator Daniel Biss (D-Evanston), would create a privately operated, nonprofit state-chartered insurance company in Illinois that would offer workers’ comp insurance to employers as a competitive alternative to for-profit insurers.

Currently, 28 other states have such state-operated workers’ comp insurance funds or state-chartered insurance companies that compete with private insurers. House Bill 2622 is modeled after systems that exist in Missouri and Kentucky, which have state-chartered insurance companies.

“This is a system that many states already use with incredible success – to the point of being able to offer dividends to employers,” Biss said. “This is a sensible pro-growth idea that will keep help to keep insurance companies honest and get workers’ comp rates down.”

biss 030817 1399The legislation passed 32-20 in the Senate on Friday. It previously passed in the House, which means it is headed to Gov. Bruce Rauner’s desk. Rauner is a vocal advocate for workers’ compensation reform in Illinois.

Employers would have the option of continuing to purchase workers’ compensation insurance from private insurers, but they also could look to the non-profit state-chartered company as an option. This is likely to be an especially attractive option for small businesses and high-risk employers – both of which have difficulty finding affordable workers’ compensation insurance for their employees.

The legislation calls for the state providing $10 million in seed money that would be paid back with interest within five years. Other states have paid back their start-up money much faster.

House Bill 2622 would help Illinois employers save money by doing the following:

  • Creating more competition among insurers.
  • Lowering insurance premiums.
  • Returning excess premiums to policyholders in the form of dividends – rather than those dividends going to corporate stockholders – or applying excess premiums as credit on the following year’s bill. Ohio, for example, intends to return more than $1 billion to its employers this year.
  • Increasing workplace safety and offering employers the opportunity to purchase workers’ compensation insurance from a company that focuses on working with employers to reduce injuries.

Biss said the legislation will give Gov. Rauner a chance to show Illinoisans whose side he’s really on in the debate about workers’ compensation – people or profits.

“If we actually want to solve the problem in Illinois, we have to go after the insurance companies that are increasing their rates even though we’ve implemented reforms to try to bring costs down for businesses,” Biss said. “This is a test. Are you for going after workers, or are you for going after the insurance companies that are causing the problems?”