Legal expert says House-approved workers’ compensation legislation is 'phony' and 'diversionary'
Legislation the House approved late last week that establishes a state-managed workers’ compensation insurer of last resort is little more than a political stunt by Springfield Democrats to turn attention away from the need for real reform in the system, Eugene Keefe, law school professor and editor of the Workers’ Compensation Law Update, said.
“It (HB 4595) gives lawmakers a platform to blame high workers’ compensation costs on the insurance companies,” Keefe, who taught workers’ compensation law for nine years at the John Marshall Law School, told Prairie State Wire. “By doing this, they can accuse the carriers of collusion and of not passing savings onto their customers.”
Sponsored by state Rep. Laura Fine (D-Glenview), the bill would establish the Illinois Employers Mutual Insurance Co. (IWCC) as a nonprofit, independent public corporation to insure Illinois employers against liability for workers' comp and occupational disease coverage. It would be funded initially through a $10 million loan from the Illinois Workers’ Compensation Commission (IWCC), which hears disputes between employees and employers regarding work-related injuries and illnesses
Fine said that the new company would help compete with private insurers who haven't lowered premium rates reflected by cost-saving changes the legislature enacted in 2011.
But Keefe said to think that a $10 million state-run carrier could compete with multi-billion dollar international insurance firms is “childish.”
“Other states are moving in the opposite direction,” he said. “They are getting rid of their state-owned carriers. They can’t compete. They are mismanaged, and their premiums are non-competitive.”
Furthermore, Keefe said that the IWCC, losing a third of its budget under the bill, would have to lay off 50 of its 150 employees if the bill ever makes it into law.
“The use of the money would impair hearings for seriously injured workers and other important IWCC actions,” Keefe said.
Illinois ranked seventh in a 2016 state-by-state ranking of the comparative workers’ compensation costs, according to Workers’ Compensation Premium Rate Ranking Summary, a review of costs published every two years by the State of Oregon. Keefe said that he is confident that costs in Illinois will be more toward the center of the pack among states when the new study comes out later in 2018.
“There are over 300 insurers in the Illinois workers’ compensation market,” Keefe said. “They strongly compete with each other to seek to provide the lowest possible premiums and grab all the business they can.”
Last year, Gov. Bruce Rauner vetoed legislation similar to HB 4595.