Illinois waiting for impact of workers’ compensation reform

Workers’ compensation varies by state in terms of both the premiums paid by employers and the benefits obtained by ill or injured workers. Illinois is one of the high cost states, along with California and Alaska.

Within the past 18 months, the governors of California and Illinois have signed comprehensive workers’ compensation reform. Employers are waiting for the full effects of the new laws to take place.

In Illinois, the workers’ comp reform has two main aspects that should reduce costs.

  • Hospitals and physicians are taking a 30 percent rate cut in their fees to treat workers’ comp patients.
  • New injury standards have been put in place to attempt to limit any fraudulent claims.

There is a new review process in which trained arbitrators will decide the cases when there is a claim dispute. These arbitrators are attorneys appointed by the governor and confirmed by the state senate.

The goal of these changes in workers’ comp is to keep employers in the state by reducing workers’ comp costs by 10 to 20 percent. These savings are not occurring immediately, but may be realized over time.

The changes in California are expected to save employers $400 million to $2 billion annually. A key portion of the change is that claims made through out-of-network providers will not be paid. Also, the physician will not be able to place a lien against the employer for failure to pay.

The changes in Illinois are expected to save employers $500 million annually. In both states, claims should be processed more quickly and savings to employers are estimated to come in at between 10 and 20 percent.