All states require almost all employers to have some form of workers’ compensation insurance, but the specific programs differ from state to state. Some states, like Ohio and Washington State, control their systems through an entirely government-run system, others, such as Indiana, have largely free markets.
Illinois leans towards the free-market end of the spectrum: In Illinois, workers’ compensation is compulsory for all employers and the state government does not provide insurance through a state fund. Employers in state have multiple options to purchase insurance, they may insure through private carriers, self-insurance, or through groups of employers. The state has one of the highest numbers of companies writing workers’ comp policies instate.
A competitive workers’ comp market, however, has not solved everything: Illinois has the second highest workers’ compensation insurance rates in the country.
The level of workers’ comp benefits provided under law in Illinois is comparable to those in neighboring Midwestern states, but costs in Illinois are far higher. According to the Workers Compensation Research Institute, Illinois’ workers’ compensation expenses per claim for medical care are on the higher end of the spectrum compared to the costs for the same kind of claims in other US states.
Employer groups and insurers blame the problems on high rates, mismanagement and fraud. Workplace safety has improved dramatically over the past few decades, yet the costs of workers’ compensation insurance have soared. The costs of maintaining a workers’ comp system are high, and the size or burden of the system can affect a state’s economy, as workers’ compensation costs have proven to be a strong determining factor in businesses’ choice to expand or relocate. Some business groups say that locating in Illinois in the future will be difficult unless workers’ comp reforms are made.
Several bills currently pending before the Illinois legislature would modify this system by capping benefits and changing how injuries are diagnosed. Under the new proposal, benefits would be capped at the age of 67 or five years are the injury, whichever is later. This is a change from the current law, where benefits can last into an injured worker’s retirement years. In an effort to combat “doctor shopping” the proposals would also required an injured worker to first see a doctor chosen by the employer, preventing multiple visits to get the most favorable opinion.
The Illinois Department of Insurance predicts that the level of savings for employers under the workers’ comp reforms now being considered could range from a low of 5 percent to a high of 10 to 12 percent.
Groups opposed to the bills, including organized labor, argue that the proposed changes will make it harder for workers to get the benefits they deserve and that the decision of what doctor a worker should use should not be determined by an employer. They argue that “company” doctors may downplay the severity of injuries and force workers to return to work sooner then necessary.