The Battle Over Workers’ Comp Reform
Illinois House Speaker Michael Madigan plans to bring a workers’ compensation reform measure to the floor Thursday when the House returns to session. It’s the latest move in an ongoing fight over workers’ comp reform between Democrats and Gov. Bruce Rauner, who has made changing workers’ comp in Illinois a centerpiece of his plan for the state's financial future. We take a look at what Rauner's proposing, whether it has any chance of passage, and how workers’ comp has already been reformed in Illinois. Greg Baise, president of the Illinois Manufacturers' Association, and John Cooney, president of the Illinois Trial Lawyers Association, join us to discuss the issue.
Workers’ compensation legislation has been in place in Illinois for more than 100 years. The 1909 Cherry Mine disaster, which killed 259 people in Illinois, and the 1911 Triangle Shirtwaist Factory fire, which killed 146 people in New York, were catalysts for the creation of workers’ compensation laws across the country, according to the Illinois Workers’ Compensation Commission (which is the state agency responsible for resolving workers’ compensation claims between employees and employers). In 1912, Illinois’ workers’ compensation legislation took effect.
Workers’ compensation is a system of benefits provided by law to most employees who experience work-related injuries or occupational diseases. Most employees, who are hired, injured or whose employment is localized in Illinois, are covered by the Illinois Workers’ Compensation Act. According to the law, accidents that arise out of and in the course of employment are eligible to receive workers’ compensation benefits.
The latest reform to the state’s workers’ compensation act came in 2011, and Gov. Bruce Rauner’s administration is trying to tie several new workers’ comp reforms to the budget process. View the chart below to see Rauner’s proposed reforms to workers’ comp.
|More proof of on-the-job injury||Under current state law, if any employee is injured on the job, no matter how indirectly, the injury is compensable. This includes a work injury that aggravates a pre-existing condition. Under Rauner’s proposal, the causation standard should be raised from "any cause” to “major contributing cause,” meaning the accident at work must be more than 50 percent responsible for the injury.|
|Cut benefits for traveling workers||Rauner proposes narrowing the scope of what constitutes travel for the purpose of workers’ compensation. Under his plan, “an employee would only be able to recover workers’ compensation while traveling if the travel was necessary for the performance of job duties. The employee must receive reimbursement for the travel or use a company car, and the travel must be required by the employer.”|
|Reduce medical payments||The 2011 reforms to workers’ compensation medical fees don’t go far enough; with the Rauner administration calling surgery costs “the most egregious fee schedule” of abuses. Surgery rates are 300- 400 percent higher than Medicare rates and 100-200 percent higher than group health. Costs for radiology and emergency services are 40-60 percent higher than other states, and pain management injections and surgery are 90-100 percent higher. Proposed reform includes reducing the fee schedule by 30 percent for all services except evaluation and management, and physical medicine (physical therapy, chiropractic visits, and occupational therapy).|
|Tie minimum wage hike to reforms||The Rauner administration says an increase in the minimum wage should be accompanied with reforms to workers’ compensation, lawsuit, unemployment insurance, and employee empowerment zones. If those reforms are enacted, the administration will increase the minimum wage by $0.25 per hour each year starting in 2016 and ending in 2022. With the minimum wage at $8.25, it would increase to $8.50 in 2016 and reach $10.00 in 2022.|
Greg Baise, president of the Illinois Manufacturers' Association, says critics who say workers’ comp reform shouldn’t be tied to a budget deal are off base.
“I think it’s fair to put it on the table as part of an overall package to change the direction of the state. Illinois has a terrible reputation as not a good place to locate as a new business,” Baise said. “Its budget is not balanced, we have seen anemic growth, and it’s fair to put it on the table when trying to solve long-term pension problems and in fact grow the economy in this state if we’re going to solve the state’s problems.”
John Cooney, president of the Illinois Trial Lawyers Association, says Rauner isn’t being honest about why he wants workers’ comp reform.
“If the issue for this state is unfunded pensions, what does any of this have to do with solving that? It will not bring a single dollar to the treasury of state of Illinois. It’s an intellectual bait and switch to give goodies to business and say it will somehow result in Illinois being more solvent someday,” Cooney said. “The pension issue is due tomorrow. The fake argument is that business will flock from other places and someday good things will happen to Illinois workers and Illinois as a state.”
On May 27, the Illinois Senate Judiciary Committee held a hearing on workers’ compensation reform. Watch the video.