lllinois Announces Plan to Decrease Workers’ Compensation Rates by 5.5% in 2015
Last week, Governor Quinn of Illinois announced that the state would be working toward a 5.5% drop in the current workers’ compensation rate by 2015. The announcement was applauded by employers and insurance companies alike — the proposed drop could help save employers $143 million in premiums in 2015.
Similar cuts have been in effect for the last several years — cumulatively, it would mean an 18% drop in premium insurance rates since 2011. State legislatures have been concerned about Illinois’s reputation as being not friendly for businesses; Chief Executive Magazine rated it as the third worst state to do business in.
“Employers look at these kind of numbers [workers’ compensation rates] to see what the business atmosphere is going to look like,” said State Representative Tom Demmer. “Lately, Illinois hasn’t had a reassuring outlook.” Demmer thinks, however, that reducing workers’ compensation rates will ultimately help encourage more companies to stay in, or relocate to, Illinois.
Every state has its own criteria for workers’ compensation; Illinois established their workers’ comp laws in 1912. Comparatively, Illinois has some of the highest workers compensation rates — fourth highest out of all 50 states. When it comes to the midwestern business scene, Michigan and Indiana have more business-friendly worker’s compensation policies — and subsequently better job growth.
Matt Belcher, who writes for a workers’ injury law and advocacy group, points out that not all of the cuts are necessarily good ones.
“Injured workers had their right to benefits restricted — older workers now will lose their right to a wage loss differential at age 67, even if they had intended to keep working,” he points out. “Those workers — and others — just get pushed onto taxpayer-funded benefit programs. You wonder why Social Security Disability filings are up? Thank workers’ comp ‘reform’.”