Workers' comp reform a top priority for Rauner in 2017
Getting Illinois back on its feet has been a top priority for Illinois Gov. Bruce Rauner since he took office two years ago.
Since then, the state’s fiscal problems have eclipsed a plethora of other issues Illinoisans face, one being stagnant economic growth.
But maximizing on Illinois’ economic potential by tackling state policies that hinder economic growth and contribute to massive job losses is something the governor plans to prioritize this year.
In an op-ed piece published by Crain’s Chicago Business, Rauner said that workers’ compensation reform is a top priority in 2017 because it directly impacts the state government and job creation, and as far as a balanced budget in concerned, “workers' compensation reform should be a core part of a comprehensive agreement.”
"When I meet with employers, both in Illinois and across the country, they cite two primary challenges for businesses in Illinois: the highest property tax burden in the nation and our uncompetitive workers' compensation system,” Rauner wrote. “Those costs are particularly harmful to businesses with large physical footprints and large workforces.”
Rauner said that unlike its neighbors – Michigan, Indiana and Kentucky – Illinois’ economy isn’t growing and has lost 34 percent of its manufacturing jobs since 2000.
“Workers' compensation is not just a business issue. It directly impacts taxpayers by costing state, county and municipal governments more than $400 million every year, plus additional costs for school districts and special purpose districts,” Rauner wrote. “Government employees file workers' compensation claims for injuries and illnesses more than 50 percent more often than private-sector workers.”
According to a 2016 report by the Oregon Department of Consumer and Business Services, Illinois is tied with Oklahoma for eighth place in workers compensation premium rates. It may be worth noting that Illinois’ ranking was a slight improvement from 2014 when the state ranked seventh. Neighboring Indiana, on the other hand, ranked 50th in 2014 and 2016.
The governor said Illinois jumped 20 spots – from the 23rd most expensive state in the United States to third – after changes were made to workers’ compensation law in Illinois.
“Illinois employers spend approximately $3 billion per year on workers' compensation, including medical expenses and disability benefits,” Rauner said.
Although bipartisan reforms implemented in 2011 by then-Gov. Pat Quinn have reduced these costs, according to a report by Workers' Compensation Research Institute, Illinois continues to be “the most expensive state in the Midwest,” Rauner said.
“A balanced approach to reform could save employers and expand job opportunities for Illinois residents,” Rauner said. “It would mean that all participants in the system—employers, workers, medical providers, insurers, lawyers and the Workers' Compensation Commission—bring savings to the system. There are many elements that can and should be included in a reform package.”
A reform package is just what the Illinois Senate seems poised to deliver and shares the governor’s sense of urgency on workers’ compensation reform.
According to the Associated Press, Senate President John Cullerton and Minority Leader Christine Radogno (R-Lemont) have negotiated a plan that will bring the budget stalemate to a close and, among other measures, enforce stricter rules on when injured employees can make workers’ compensation claims.
Other changes would include restrictions on claims when injuries are accidents, maximum compensations rates and physical therapy would be limited.
Rauner has been steadfast in his effort to reform the worker’s compensation system in Illinois as part of his “Turnaround Agenda.”
Within the first six months of his governance, workers' compensation reform bills in line with Rauner's agenda had been introduced in the Illinois General Assembly.
In May 2015, House Bill 4223 was introduced by state Rep. Jim Durkin (R-Western Springs) and sought to make it a requirement for injured workers to prove that the injury they sustained while working was in fact the major cause of the medical condition or injury for which they were seeking compensation.
Within a month of its filing, the bill had gained 10 additional sponsors.
Radogno also sponsored a bill that would have amended SB 994 in the Senate, but neither attempt made it past Springfield Democrats and workers' compensation reform was not packaged into the stopgap budget that temporarily funded the state until Dec. 31.
Meanwhile, proponents of workers' compensation reform tried to raise awareness and call for change. In a report released last summer, the Illinois Policy Institute stated that workers' compensation in Illinois is problematic because the current system is outdated
“The workers’ compensation system is designed around a 19th century workplace that has become irrelevant in the 20th century,” the report stated. “At the start of the 21st century, the American workplace is changing again. Innovations such as the sharing economy and other changes that cannot be predicted require a dynamic response. Illinois needs a system that is as dynamic and innovative as the 21st century workplace.”
Another report by the Illinois Policy Institute revealed that Illinois taxpayers pay $402 million each year to support the workers’ compensation system – the state pays $132 million annually, counties pay $45 million annually and municipalities pay $225 million a year. The total amount Illinois pays exceeds the national average for individual states by $190 million.
Many have expressed concern that the way Illinois courts handle workers’ compensation claims has paved the way for a floodgate of claims.
Last July, the Illinois Appellate Court ruled in Scott Moran v. the Illinois Workers’ Compensation Commission, et al. that a senior fire official who claimed post-traumatic stress disorder (PTSD) following the line-of-duty death of a fellow firefighter should receive benefits, reversing previous rulings.
Eugene Keefe, a partner with the Chicago firm of Keefe, Campbell, Biery and Associates LLC, commented on the case and said it was setting an expensive precedent.
“The idea that every guy in that fire department now could say, ‘I’m upset. I knew that guy. I feel terrible that he died. I feel like I can never work again.' I really have a problem with that. I think firefighter benefits are already sky high in this state, and now they’ve gotten sky-higher,” Keefe told Illinois Business Daily at the time.
Rauner concluded his op-ed by emphasizing how crucial it is for Illinois to act now on worker’s compensation reform.
“If we cannot provide Illinois residents with good jobs and expand our tax base, the state will never be able to properly support education and human services to the level they deserve, and our pension liabilities will look even more daunting,” Rauner wrote. “Change is not easy, but the status quo is unacceptable. We cannot afford to fail.”