$400 million in premiums renews call for state workers' compensation reform
Workers’ compensation is perceived primarily as a responsibility of private-sector businesses in Illinois, which have the highest premiums in the Midwest, but industry experts said Prairie State taxpayers shell out over $400 million annually for the program.
To that end, analysts said the system desperately needs an overhaul. A recent report by the Illinois Policy Institute illustrates how many answers are within reach if the state is willing to re-evaluate the process and make adjustments that are more in line with the public’s needs, rather than simply raising taxes at every juncture to combat costs and cover fiscal mishaps.
Research has revealed that government expenses to cover public employees for workers’ comp in Illinois are “sky high.” While the state pays $132 million per year and counties pay $45 million annually, municipalities shell out $225 million annually — registering as the third-most expensive item for municipal governments.
Altogether, the tab’s grand total of $402 million for all levels of government is approximately $190 million higher than the national average for individual states.
Workers’ compensation has become excessively expensive for the state government for several easily identified reasons, Illinois Policy Institute Marketing Manager Eric Kohn said. First, variables such as extra-high settlement payouts, unduly long waiting periods during case processing, and too much wiggle room in the area of medical expenses contribute to inflated costs.
In addition, Illinois’ laws have somehow allowed the system to become more expensive than those in neighboring states. Additionally, Illinois appears to have an incredibly complex “7,000 layers of government,” Kohn said, meaning there is a considerable amount of duplication or redundancy within departments and divisions, possibly jacking up costs in labor and cash without it being noticed.
To say the left hand doesn't know what the right hand is doing may be appropriate here. It's possible that the gears of Illinois’ state government have rusted from going too long without an inspection.
Kohn said it is entirely possible to shift some of the burden off of taxpayers, who already pay disproportionately high property taxes, and that reforms to the Illinois Workers Compensation Act are a logical starting point.
Injured workers, for example, should have more options than either returning to the exact same physical demands stipulated by their job description or sitting out entirely. More provisions for “light duty” need to be conceived, defined and documented so that employees can retain their status with altered responsibilities, imbuing work environments with more flexibility, and in turn, tolerance.
Additionally, reforms to the Illinois Public Employee Disability Act (PEDA) and Public Employee Benefits Act — both enacted in 1997 — would hasten the much-needed refurbishing of the high-priced workers’ compensation program in Illinois.
Since 1990, accommodations in the workplace and elsewhere have been legally required by the Americans with Disabilities Act (ADA), which says no employer can discriminate against an employee with disabilities. If the disabilities were caused in the workplace, the law does not refer exclusively to physical limitations, but also covers mental and emotional impairments triggered by accidents on the job.
If workers could return more quickly to their positions with accommodations and the greater probability of an accepting work environment, they would require less workers’ compensation outlay from the state, saving the government money and passing those savings on to Illinois taxpayers in the long run.
“While reforms are critical for making Illinois’ private-sector economy competitive with surrounding states, it’s also critical we reform public employee workers’ compensation costs and bring them in line with our surrounding competitor states to lessen the burden … Illinois taxpayers are shouldering,” Kohn said.
In addition to publishing articles for local media, Belleville native Kohn has been a radio commentator and host. He previously worked at a leadership education organization called America’s Future Foundation as chairman of its local Chicago chapter.