Reductions in benefits provided to injured workers under the Illinois Workers’ Compensation Act have been proposed by Governor Rauner as part of his Turn Around Agenda. As lawmakers in Illinois continue to deal with approving a state budget, addressing underfunded pension obligations for State workers, and the potential likelihood of an increase in taxes to address these problems, Governor Rauner has insisted that no deal will be struck without benefit reductions in the Illinois Workers’ Compensation Act. Opponents to the Governor’s pursuit of reductions in benefits, counter that reforms passed in 2011 have resulted in a decrease in costs to employers which have the cost of work injuries in Illinois moving in the right direction. Some argue insurance companies kept $2 billion in savings that should have been passed on to Illinois businesses.
The following provides an update on proposed legislation. Workers’ compensation laws protect both the injured worker and the employer. The injured worker should receive prompt quality medical care and pay for time off of work because of an injury and compensation for permanent injuries. Illinois employers are shielded from far more costly personal injury litigation along with having a voice in the injured workers’ medical care and rehabilitation. As many Illinois businesses anticipate reduced federal regulation and enhanced spending on improving the infrastructure and expansion of the workforce, fair workers’ compensation benefits need to be in place to protect injured workers at a fair price to Illinois businesses. The most significant changes proposed by the Governor are as follows:
• Causation
• AMA Guidelines
• Medical Fee Schedule Reduction
• Traveling employee
Regarding causation, the Governor proposes changing the standard of proof from the work accident being a “a” causative factor to the injury to “the major contributing cause” of the injury would require the injured worker to prove that their work accident was more than 50% responsible for the injury compared to all other causes. If approved, this would deny workers compensation for many workers that are presently covered. It will be particularly problematic for workers whose injuries have developed over their career. For example, an auto worker that has torqued bolts on lift gate hinges or a flight attendant closing overhead bins may find it difficult to get workers compensation coverage for a shoulder injury resulting from years of overuse. Additionally, construction workers, especially those hired out of union halls who may work for several employers over the course of their career would likely have greater difficulty establishing their employer’s responsibility for a work aggravation of a degenerative condition.
Regarding AMA Guidelines, the proposal is to allow the Commission to use only one of five factors to determine permanent partial disability. This would allow the Commission to base an award solely on the AMA Guidelines. The AMA Guidelines were added as one of five factors in determining permanent partial disability in 2011. This legislature’s implementation of the five factors for the Commission to determine permanent partial disability has already resulted in a reduction in the monetary awards. Allowing the Commission to use only one factor would give the Commission the discretion to base an award solely on the AMA Guidelines. This would result in significantly diminished monetary compensation for injuries. The proposal also suggests reducing the medical fee schedule which is the maximum amount set by the Illinois Workers’ Compensation Act that employers and insurance companies have to pay for medical services. A 30% cut is proposed. Opponents to the reduction in the medical fee schedule cite concerns that more medical providers will refuse to treat injured workers which is being seen in Texas, California, Florida, etc. Lastly, the proposal to narrow the coverage of workers compensation protection for traveling employees limiting employers responsibility to incidents where traveling is necessary for the performance of job duties and that the employee must receive reimbursement for the travel or use a company car and the travel must be required by the employer. If passed these changes would result in less covered claims, less money for settlement or awards, and less money paid to medical providers for care to injured workers.
Very recently, Illinois State Senators Cullerton and Radogno proposed a bipartisan Senate bill (SB2901) agreeing with the Governor’s proposals on medical fee schedule reductions and AMA Guidelines and raising the following for substantive changes:
• Statewide average weekly wage freeze
• Credits for prior claims for bodies as a whole awards
• Physical therapy, occupational therapy and chiropractic limitations
• Increased waiting period (no pay) before start of TTD
A significant Illinois House Amendment was proposed specifically to address the amount an insurance company can charge a business for workers’ compensation insurance. Evidence shows that since the 2011 amendments to the Illinois Workers’ Compensation Act, Illinois workers’ compensation costs have decreased and the corresponding insurance ratings for risk have improved. It appears that despite the lower costs and lower risks, insurance companies continue to charge Illinois businesses higher premiums. ITLAe-NEWS 2/2/17. These allegations have largely gone unrebutted by the insurance industry. www.insurancejournal.com/news/midwest/2017/01/11/438599.htm The amendment, (Illinois House Amendment 4SB2901) would require insurers to pre-file workers compensation rates and allow insurance regulators to approve or disapprove those rates; allow the Director of the Illinois Insurance Department to require refunds to consumers in cases in which an insurer is found to be charging excessive rates; and allow the Director to specify interim rates when an insurer’s rates are found to be excessive.
Clearly, a thorough investigation of the savings from the 2011 reforms should be completed before any further reductions are passed. The lesson here is that any reduction in benefits will need insurance regulation to lower insurance premiums.
Illinois businesses and workers most likely agree that the Governor and Legislature should require insurance companies to pass the savings on to Illinois businesses.
If you agree, take action now. Contact Illinois State Representatives and State Senators, along with the Governor to voice your opinions.