Expensive Payments and High Insurance Rates

Chriss Swaney

Is Work Comp Under Fire, and What are We Doing About it?

Springfield, IL (WorkersCompensation.com) – Workers’ compensation is treading water in several states where lawmakers are attempting to pass legislation to curb expensive payments and create more sustainable systems.

“We refuse to participate in a race to the bottom when it comes to workers’ compensation rights,” Illinois Sen. Kwame Raoul (D-Chicago 13th) told WorkersCompensation.com.

“We put in place a series of extremely successful reforms several years ago. Now we need to hold insurance companies accountable and ensure they are passing on savings to employers and workers.”

Sen. Raoul helped pass legislation on April 17 that puts in place a series of reforms to the state’s workers’ compensation program.

The measure makes several changes to Illinois’ workers’ compensation system, including: requiring electronic billing for workers’ compensation claims, allowing first responders to receive benefits the day after their accident, creating an evidence-based prescription drug formulary and changing the way insurance companies set rates with the Illinois Dept. of Insurance.

Sen. Raoul worked with the Illinois Manufacturers’ Association and other stakeholders on the Senate’s overhaul of the work comp program in 2011. Since then, the state’s employers have saved more than $315 million in workers’ compensation premiums. Premiums in Illinois are 45 percent higher than the average in surrounding states and 164 percent higher than neighboring Indiana.

Sen. Raoul also pointed out that the measure passed in April includes a provision empowering the State’s Dept. of Insurance to ensure savings from these and past reforms on employers. Other key components of the Sen. Raoul measure include:

  • Clarification that an American Medical Association (AMA) impairment report is not required to award benefits or reach a settlement, although a report may be utilized when reaching a decision.
  • Penalties for unreasonable delays in authorizing medical treatment classification of hip and shoulder injuries as leg and arm injuries, respectively.
  • However, in Kentucky, some workers are complaining about a new potentially onerous law passed on March 30. The new bill essentially raises benefits for some injured workers, places a 15-year cap on benefits for others, and sets up a process for renewing benefits that are set to expire.

Louisville police officer Mike Clark, who was hit by a drunken driver in 2011, said the changes in the Kentucky workers’ compensation law hurt workers like him who deal with lingering medical problems from work-related injuries.

“I still deal with back pain,” Clark said, a Louisville Metro Police officer. “I know that down the road, this is going to be an issue that I’m going to have to address again,” he added.

“This bill also could help dampen recruitment to police service. We have so few benefits now and this new law makes it even more difficult.”

The bill would allow workers facing the 15-year cutoff of medical benefits to apply for extensions every two years. The legislation would also prevent workers’ compensation cases from being reopened more than four years after a claim is made and workers would have to file claims for cumulative trauma — injuries that build up over time — within five years of the most recent injury.

The legislation is supported by business groups, who say it would help drive down workers’ compensation insurance rates and trim unnecessary claims.

Florida officials are also taking aim at curbing workers’ compensation costs. The Florida Office of Insurance Regulation recently approved a rate decrease for workers’ compensation insurance in Florida. The 1.8 percent decrease was filed by the National Council on Compensation Insurance (NCCI) in a law-only filing resulting from the effects of the Federal Tax Cuts and Jobs Act.

“Reducing insurance costs and financial burdens is great news for our business community. Florida businesses support our local communities, create jobs, and help our state’s economy,” said Jimmy Patronis, Chief Financial Officer for the state’s Dept. of Financial Services. “This rate reduction is a much needed insurance cost savings for Florida.”

Adam Putnam, Commissioner of the Florida Dept. of Agriculture and Consumer Services, said reducing the cost of business spurs job growth.

Nationwide, more than 30 percent of all workers’ compensation claims are the result of falls from elevated surfaces on construction sites. Check out WorkersCompensation.com next week for more coverage on construction accidents.