Illinois workers’ compensation reform: Is politics getting in the way?

Democrats and Republicans spar over reform. Are the partisan politics seen so often inside the DC Beltway affecting producers in Springfield as well?

Workers Comp

By

By Michael P. Tremoglie
 
Illinois Republican Gov. Bruce Rauner and Illinois Democrat House Speaker Michael Madigan are at odds about reforming the state’s workers’ compensation laws. Madigan says changes will hurt working people. Rauner claims the current laws hinder businesses.
 
Democrats claim Republicans want to cut benefits. Republicans deny this, saying they want to reduce fraud and abuse. They also claim costs are too high.
 
The Workers Compensation Institute (WCI) conducted a study of workers’ compensation claims in Illinois finding: “Indemnity benefits per claim were higher than those in the other study states due to ... more frequent and larger settlements coupled with longer duration of temporary disability in Illinois compared with other study states...”
 
One of the root issues, unrelated to the workers’ compensation reform, is the desire of Democrats to raise taxes. Rauner, on the other hand, has made workers’ compensation reform a major initiative. So it seems there is a quid pro quo at play. If Democrats get their tax increase, they give the governor his workers’ compensation reform – or at least ‘reform light’. If the governor holds the line on taxes there is no reform.
 
How does this political wrangling affect Illinois producers selling workers’ comp? For one, reform delay means fewer prospects. Companies are leaving Illinois.
 
“Producers have already seen a loss in manufacturing jobs in the state,”
said Jeffrey Junkas, AVP of state government relations for the Property Casualty Insurers Association. “House Bill 1287 does not help anybody.”
 
Mike Lucci, director of Jobs and Growth at the Illinois Policy Institute, a Chicago public policy organization, underlined the seriousness of the problem. “In the last 10 days, we've seen four major manufacturers shut down and declare they are moving out of Illinois, and there have been many more than that over the course of 2015,” he says. “Manufacturers simply don't expand here because of the regulatory policies, with workers’ comp being the single most costly.”
 
These sentiments were echoed by Andrew Biggs, a scholar at the American Enterprise Institute. “Anything that is going to shift the price of the policy will shift the demand for the policy,” he said. “If employers are required to purchase workers’ compensation insurance they will either purchase the bare minimum or leave the state. So it is quite possible that insurers will be selling cheaper policies to fewer companies.”
 

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