Worker’s Comp costs falling. Does it matter to Rauner?

Bill Knight column for Thurs., Fri., or Sat., Jan. 11, 12 or 13, 2018

Workers’ compensation benefits paid in Illinois declined in recent years, especially compared to the rest of the country, according to a report from the nonpartisan, nonprofit National Academy of Social Insurance released last month.

But will that matter to Republicans who seem determined to weaken the law?

Workers’ compensation is a no-fault insurance system providing a percentage of lost wages, medical expenses and occupational rehab to employees injured on the job. In 2015, workers’ comp benefits paid in Illinois were $2.4 billion. Between 2011 and 2015, Illinois experienced a 19.3-percent decrease in benefits paid – the second largest decrease in the country. Total benefits paid in the rest of the U.S. increased by 2 percent over the same period, according to NASI, which also showed the decline in total benefits paid in Illinois is probably due to 2011 changes that regulated the medical-delivery process.

Compared to all states, Illinois had the seventh-lowest percentage share of medical benefits relative to total benefits paid in 2015, NASI shows; employer costs for worker’s comp as a share of payroll fell; and benefits decreased for the fourth consecutive year.

“The trends in workers’ compensation benefits and costs in Illinois between 2011 and 2015 have made a dramatic change in how Illinois compares to other states,” said Arizona State University professor Marjorie Baldwin, co-author of the report. “In 2011, workers’ compensation benefits paid per $100 covered wages were 10 percent higher in Illinois than in the rest of the U.S.; in 2015 they were 13 percent lower. Costs to employers (per $100 covered wages) were 8 percent higher in Illinois in 2011; in 2015 they were 5 percent lower.”

Peoria attorney Doug Stephens, who represents workers’ comp claimants, said, “These findings of a significant reduction in costs reflect the changes in the workers’ comp law of which the medical providers took the biggest hit. The biggest reason for the reduction in costs is the reduction in medical treatment costs under the Act.  In our region, medical providers are paid approximately 53 percent of their regular bills for treatment of injured workers.”

NASI researcher Christopher McLaren, the report’s lead author, agreed, saying, “Illinois reduced its medical fee schedule by 30 percent, established a preferred-provider program, and introduced a number of other changes to its medical system in 2011 that are likely influencing the decline in medical benefits paid.”

The report – the only comprehensive data on workers’ compensation benefits, coverage and employer costs for the nation, the states, the District of Columbia and federal programs – also found:

* Benefits per $100 of payroll decreased in all but three states, with the biggest declines in Illinois, Oklahoma and West Virginia, all of which made significant changes in their workers’ comp systems during this period;

* Employer costs per $100 of covered payroll increased in 24 states but decreased in 27 states, including Illinois.

* Growth in employment and payroll covered by Illinois workers’ comp system trailed increases in the rest of the country. In 2015, covered employment reached 5.8 million here, up 5.2 percent from 2011 (compared to an 8.1 percent increase for all other states), and covered payroll was $320 billion, up 16 percent from 2011 (compared to a 19.4 percent increase for all other states).

* Workers’ comp benefits paid in Illinois fell as a share of payroll to 75 cents per $100 of covered payroll in 2015 – down from $1.08 in 2011. Illinois has the third-largest decline in benefits as a share of payroll in the nation.

Despite such information, politicians’ attacks may not diminish.

“Unfortunately, I do not think that these FACTS from this non-partisan group will sway lawmakers,’ Stephens said. “I believe workers’ comp has been the scapegoat/whipping boy for legislators without care or concern for injured workers or their families. Facts won't matter to those who are opposed to a fair Comp Act.

“Gov. ‘Ruiner,’ as I refer to him, despises unions, and it seems like it is his passion to destroy them,” Stephens added. “I don't know where this hatred of unions comes from, but he doesn't seem to care what it does to our state or who it harms. I don't believe he will back off his mission to destroy unions, what they stand for, or who they try to protect. Statistics, which clearly establish that costs have significantly decreased, will not deter him from wanting further cuts in workers’ protection laws.”