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"We want to attract
more jobs to Illinois, and helping businesses save money on the cost
of workers' compensation insurance is a good way to do it,"
Blagojevich said. "Businesses currently spend too much money on
workers' comp, and workers don't receive the benefits they deserve.
This new law addresses both problems."
According to the National Insurance Crime Bureau, workers'
compensation fraud costs employers $6.5 billion a year nationwide,
and Illinois is the 19th most expensive state in the nation when it
comes to workers' compensation premiums. Illinois companies pay 40
percent more for workers' compensation than neighboring states
Michigan, Wisconsin and Indiana, with many low-wage workers still
needing stronger workers' compensation benefits and support.
The governor worked closely with Sen. Terry Link, D-Lake Bluff,
and Rep. Jay Hoffman, D-Colllinsville, sponsors of
House Bill 2137, to curb soaring costs of workers' compensation
and decrease financial risks for employers, increase monetary
benefits for employees who are injured or killed on the job, and
heighten enforcement of fraudulent activity.
"Businesses are hit with high costs, and working people are
paying the consequences by not getting the benefits they deserve,"
Link said. "We may now be able to reduce business costs, provide
more generous benefits and fight fraud. I am proud to be standing
with the governor today as he signs this critical legislation."
"Governor Blagojevich made it a priority to bring labor,
businesses and the General Assembly to the table to improve our
workers' compensation system, and that's what we did with this law,"
Hoffman said.
This aggressive and comprehensive workers' comp reform marks an
unprecedented victory for businesses, workers, medical care
providers and insurance professionals. The new law:
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Creates cost containment in workers' compensation for Illinois
business owners by joining 44 other states in implementing a
medical fee schedule that will be indexed to the Consumer Price
Index. This is expected to save Illinois businesses millions of
dollars annually by limiting the
amount that may be charged for medical procedures. This will
reduce medical costs, a primary expense in workers' compensation
cases.
Substantially increases worker
benefits. Increases the minimum benefit for a worker killed
on the job from $400,000 for 20 years of payments to the greater
amount of $500,000 or 25 years of payments. It also increases
burial benefits for fatally injured workers to $8,000 from
$4,200 and provides more benefits for low-wage workers.
Establishes a fraud unit. A workers' compensation fraud
statute and investigation unit within the Illinois Department of
Financial and Professional Regulation's Division of Insurance
will investigate charges of workers' compensation fraud,
including uninsured employers. It strengthens penalties and
fines, creates a work-stop order for employers who fail to
obtain workers' compensation insurance and allows for reporting
of fraudulent claims by employees. This unit will help to find
fraud and deter future fraud from within the system. It will
save businesses money by eliminating the need to pay for
unjustified claims.
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Creates a third panel to the Workers'
Compensation Commission. The commission will expedite
resolution of disputed claims, which will allow injured workers
to receive quicker treatment and return to work sooner.
This reduces costs for business by lowering medical
costs, due to quicker treatment, as well as decreasing
litigation costs. It increases penalties for unreasonable delays
of workers' compensation benefits from $10 per day to $30 per
day and from $2,500 per claim to $10,000 per claim.
"An extraordinary amount of work and negotiation has gone into
shaping this much-needed comprehensive reform of the Illinois
Workers' Compensation Act," said Margaret Blackshere, president of
the Illinois AFL-CIO. "The changes will improve efficiency and
benefits for workers, greatly assist business with cost containment,
and work to expose fraud by employers, the insurance industry and
workers. A huge debt of gratitude goes to Michael Carrigan,
secretary-treasurer of the Illinois AFL-CIO, for spearheading the
negotiations for labor and to Governor Blagojevich for having the
foresight to address this critical issue."
"The changes to this state's workers' compensation system signed
into law today are the most significant reforms we've seen in
decades," said Greg Baise, president and chief executive officer of
the Illinois Manufacturers' Association. "Business and labor leaders
should be commended for working together to provide improved
benefits at a lower cost for employers."
"Having been involved with the Illinois workers' compensation
system for nearly 20 years, this is clearly the most comprehensive
workers' compensation reform in a generation," said Dennis Rutth,
chairman of the Illinois Workers' Compensation Commission. "It
addresses multiple issues, including fraud investigation, cost
containment for employers, improving the hearing process for both
workers and employers, and increasing benefits for widows, widowers
and orphans. This is a win-win for both employers and employees of
the state."
"For the first time in nearly 30 years, the governor and members
of the General Assembly used their leadership skills to bring
business and labor together to reduce business costs and reform one
of the most expensive systems in the country," said Dave Vite,
chairman and chief executive officer of the Illinois Retail
Merchants' Association.
"Governor Blagojevich deserves credit for making workers'
compensation a legislative priority in 2005," said Douglas Whitley,
president and chief executive officer of the Illinois Chamber of
Commerce. "Illinois' workers' compensation laws were long overdue
for attention. The members of the Illinois Chamber are eager to
continue to build upon the cooperation and progress that was
accomplished this year."
House Bill 2137 is effective immediately.
[News release from the governor's
office]
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