Workers' Comp Reform = Taxpayer Savings

Unless you are a business owner or have been injured on the job, you may not be familiar with the workers’ compensation system in Illinois or how it affects your pocketbook.

Every business pays insurance premiums for workers’ compensation in the event an employee gets hurt on the job. This insurance is an essential protection for both employer and worker. The problem in Illinois is that workers’ compensation premiums are much higher than in other states because we have a broken and inefficient system. This reality is a major job-killer, because when employers have to pay higher premiums, that’s money they can’t use to increase wages or hire new workers.

Businesses aren’t the only ones paying higher premiums to insure their employees. State and local governments do too, with taxpayers footing the bill. Literally hundreds of millions of dollars can be saved from the direct and indirect costs government incurs from workers’ compensation insurance.

One of my first acts as a state representative was to have an official study conducted by the nonpartisan Legislative Research Unit that shows a direct cost savings of $190 million to state and local governments in Illinois each year if our workers’ compensation rates were merely average compared to other states, instead of one of the highest.

The average state in America pays $1.85 per every $100 of payroll in workers’ compensation premiums. Contrast that with Illinois, which pays $2.35 per every $100 of payroll. Fifty cents per every $100 adds up fast when you consider the billions in government payroll.

Additional savings would be achieved in the cost of construction projects that government contracts out. The differences between Illinois and other states are more glaring when you look at the rates for these types of jobs which are inherently more dangerous.

For concrete construction, Illinois has the highest premiums among all 50 states at a staggering $25.52 per $100 of payroll, compared to the national average of $8.80.

For masonry (bricklaying), Illinois pays $18.19 compared to the national average of $9.15.

For carpentry, Illinois pays $10.28 compared to the national average of $6.46.Is work in Illinois that much more dangerous than in other states to justify such a huge cost difference? It is doubtful.

Extraordinary cost savings can be achieved just by Illinois enacting reforms that make us average. We don’t have to be the best or even in the top 10. If government can save $190 million by making a common-sense change, imagine how many new jobs can be created by the men and women of our small business community if they were allowed to compete on a more level playing field.

What, then, are the solutions? One is to require a primary causation standard for all workers’ compensation claims, meaning that any injury and resulting disability or aggravation of a preexisting condition must result from an activity directly related to employment. While this would seem to be common-sense, it is not currently the law in Illinois.

Another reform would be in the area of injury claims payment. Massachusetts has lowered their costs simply by having a system that pays workers’ compensation claims faster than any other state. This would get workers paid and back to work without the need for costly and lengthy litigation.

Last but not least, having injured workers go to doctors that specialize in rehabilitating employees and getting them back to work as quickly as possible would be another major reform.

Our three-point plan should be 1) Make sure the injury is work related. 2) Get the injured worker compensated quickly. 3) Get the injured worker back to work as soon as possible.

Workers’ compensation reform is attainable and within reach. It will take bipartisan cooperation in Springfield to develop a system that is fair to every worker, employers and fair to taxpayers. Achieving this reform would benefit all of us and make Illinois immensely more competitive in the jobs market.