The challenge for Illinois’ future is to create, keep and grow jobs and employment opportunity even though the state has achieved a reputation for having an anti-business political climate.
Our political leaders can start to turn around Illinois’ economic condition and political reputation by reducing the cost of doing business in this state. Workers’ compensation is one of the fundamental issues that elected officials must address if we are to improve competitiveness and successfully restore jobs.
Yes, there were legislative changes adopted in 2005, but the changes have not lowered costs and are not worthy of being characterized as “reform.” If Illinois’ rankings are to improve significantly, nibbling at the edges and adopting only marginal adjustments are simply not enough.
That’s why the Illinois Chamber has taken the lead in pushing for workers’ compensation reform.
Already, the Chamber has:
Successfully fought the government’s imposition of excessive fees to fund the state’s Workers Compensation CommissionOrganized a conference this month that will give business leaders vital information about the newest workers’ compensation issues.Planned a workers’ compensation reform campaign, which will kick off at the conference and be focused on next session of the Illinois General Assembly.
The Chamber would like your feedback to help us achieve workers’ compensation reform in this state. Let us know about outrageous workers’ compensation cases. Give us guidance on what should be changed at the Workers’ Compensation Commission.
Let’s work together to make Illinois a better place to do business.
Litigation Settlement
Illinois businesses will save millions in assessments and benefit from operational improvements at the Worker’s Compensation Commission in the coming years as a result of the Chamber’s legal victory.
The most immediate benefit for employers and insurers is that the Commission will skip the next three assessments for the Rate Adjustment Fund (RAF) beginning January 2011. This will save businesses about $27 million over the next 18 months.
The court’s settlement order also instructs the Workers’ Compensation Commission to spend $30 million to improve transparency, efficiency and operations. The court retains control of the funds and must approve the state’s requests to withdraw funds. The Illinois Chamber has authority to monitor the use of the funds and has already initiated conversations with the Commission to begin the implementation process, which will occur over many months.
Chamber members are encouraged to offer ideas that would result in more efficient Commission operations. All comments are welcome, but you should know the primary focus of improvements will be directed at modernization of information technology capabilities. The existing systems are obsolete, inefficient and lack modern online functionality.
Workers’ Compensation Conference
Business owners, CFOs, HR professionals and risk managers can stay current with cost, fraud, legal and liability issues at the Illinois Chamber’s second annual fall conference on workers’ compensation. The event will take place Oct. 28 at the Marriott Chicago Oak Brook Hotel, 1401 West 22nd St. , Oak Brook, Illinois. The cost is $199 for members and $249 for non-members. You may register online at www.ilchamber.org.
At this conference, the Chamber will announce the campaign for worker’s compensation reforms that will be pursued during the next session of the Illinois General Assembly. We will:
Make the case for why the next round of workers’ compensation reforms must move forward.Introduce components of the Chamber’s WC Action Agenda.Solicit the input and commitment from conference attendees to help build a compelling case for legislative and governmental action aimed at reducing workers’ compensation costs in Illinois.
Why Reform is Important
Numerous multi-state comparative rankings that measure economic performance have consistently shown Illinois to have low standing when compared with high-growth states.
Chief Executive Magazine ranked Illinois’ business climate 46th in the country in 2010. The ALEC-Laffler State Competitive Index of 2010 ranked Illinois 48th in economic performance and 48th in job creation from 1998 to 2008, trailing only Ohio and Michigan. Only New York and California had more outward population migration than Illinois during the same period, suggesting that 640,000 people envisioned greater economic opportunity existed elsewhere.
Until we enact meaningful reform, the states that border Illinois will continue to flaunt their lower workers’ compensation costs.
For example:
In 2005, Missouri lawmakers enacted reforms and have since seen their costs drop more than 20 percent. Since 2006 the total average increase in Illinois workers’ compensation rates was 16.4 percent, and 6.3 percent in 2009 alone. During the same period, average rates for workers’ compensation across the country decreased 17.1 percent.Thirty states saw average rate reductions in 2008-2009, while Illinois joined only four other states that had an average recommended rate increase, according to NCCI Illinois State Advisory Forums.Indiana (2nd), Wisconsin (14th), Iowa (15th) and Missouri (31st) all ranked higher than Illinois (38th) in the 2008 Actuarial & Technical Solutions, Inc. State Rankings of Workers’ Compensation Comparative Costs for Manufacturers. This is another example of how neighboring states can tout their workers’ compensation cost advantage to Illinois employers and businesses that are planning job expansions in the region.
A number of states that compete with Illinois have addressed or are addressing their workers’ compensation cost issues and employers in those states are experiencing significant reductions in costs. Florida’s workers’ compensation rates fell more than 18 percent in 2009. Florida businesses have seen an average decrease in workers’ compensation costs of more than 65 percent since 2006. Colorado businesses experienced a 16 percent reduction for workers’ compensation in 2009, will see an additional 9.7 percent decrease in 2010 and have seen a 36.2 percent reduction since 2006. Arkansas workers’ compensation rates decreased nearly 20 percent the past two years and Pennsylvania has experienced a 19 percent reduction since 2006 as well.
Economists predict there will be a slow recovery to the current recession, but the economy will turn positive over the next two years. Thus, it is critical for Illinois political leaders to undertake the necessary changes that will position our state to be cost competitive when the recovery occurs.
Member Input and Engagement is Imperative
In order to build the case for reform, the Illinois Chamber needs employers to weigh in with examples of the most egregious workers compensation cases they have experienced. The objective is to establish a substantial record that demonstrates the irrational ills of a workers’ compensation system that has lost touch with common sense and caused employers to despair.
We also need employers with multi-state operations to provide good comparative data on costs, as well as sharing contrasting experiences that demonstrate how Illinois' workers' compensation operations can be streamlined, improved or made more efficient from the employers’ point of view. Contact us via e-mail through the Illinois Chamber’s Employment Law Council at sarahlynnseiz@gmail.com or by regular mail to: Jay Shattuck, Illinois Chamber Employment Law Council, 600 S. Second St. Suite 101, Springfield, Illinois 62704.
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