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Work comp costs in Illinois among highest in country

Illinois has some of the highest workers’ compensation costs in the nation, according to a study from the Workers’ Compensation Research Institute

hoffman jayThe Workers’ Compensation Research Institute compared Illinois’ workers’ compensation system with 17 other states and found Illinois had one of the highest medical-legal expenses per claim and one of the highest percentage of claims with medical-legal expenses.

“Higher-than-typical medical payments per claim were due to prices paid for professional services and higher utilization, largely driven by physical medicine,” said WCRI Executive Vice President Ramona Tanabe.

Findings from the study included that Illinois’ weekly maximum wage benefit was higher than that of other states reviewed, or more than 133 percent of the statewide average weekly wage compared with 100 percent in most other states. Illinois also had a longer duration of temporary disability benefits than most states. Of all states, Illinois had among the highest percentages of claims with more than seven days of lost time that received settlements.

The study found Illinois’ average cost per claim over seven days lost time was $51,148, only less than Louisiana, Pennsylvania, Virginia and North Carolina. Illinois’ costs were higher than neighboring Iowa, Indiana and Wisconsin, and higher than other states in the region like Tennessee and Michigan. The median state cost was nearly $42,000.

“While medical and legal expenses remain higher than the typical state, there were only modest increases in prices paid for professional services during the study period,” said Tanabe. “This is consistent with the fact that the state’s fee schedule is tied to the Consumer Price Index.”

State Rep. Jay Hoffman, D-Belleville, (shown) said lawmakers passed reforms in 2011.

“If you look at what that has resulted in, there has been over a 30 percent reduction in the cost of the workers’ compensation system, yet we have not been seeing the result in the premiums,” Hoffman said.

He said legislation passed last year will require insurance companies to report their rates to reflect the cost.

State Rep. Dan Ugaste, R-Geneva, said the 2011 reforms did help.

“But that’s because the 2005 reforms took everything in the other direction,” Ugaste said. “We needed to come back further.”

Ugaste said the high costs of workers’ compensation claims in Illinois hurt business investment and, in turn, hurts Illinois’ economy.

Ugaste said the standard to prove that an injury was sustained at work needs to be tighter and the weekly benefit increases need to be rolled back. He said that would save money for businesses and taxpayers.

“It’s going to save business, and not just business, but it’s going to save governments, local governments, state government, all different government units, probably somewhere in the area of six to seven percent of final payouts in workers’ compensation,” Ugaste said.

Several of Ugaste’s proposed legislative changes never advanced out of committee.

Gov. J.B. Pritzker signed a measure Friday that will allow workers to file a civil claim for something work-related injuries more than 25 years later.

“The new law lifts the 25-year statute of limitation on claims for people diagnosed with latent diseases after exposure to toxic substances (such as asbestos, radiation, beryllium) in the workplace,” said a statement from the governor’s office. “[Senate Bill] 1596 protects victims’ access to justice beyond that time limit.”

Some business owners said they fear that it will push costs higher.

Hoffman said the measure was needed for people who get mesothelioma, for example.

“If a person gets this terrible disease, they won’t be barred from exerting a claim,” Hoffman said.

Story by Greg Bishop of the The Center Square, formerly the Illinois News Network

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