The Illinois General Assembly made history back in May 2011 when it passed a comprehensive workers’ compensation reform bill designed to generate significant annual savings. To date, the bill — which officially took effect in September 2011 — has enjoyed success, reducing work comp premiums in the state by as much as 9.2 percent.
Interestingly enough, however, a growing group of state lawmakers as well as multiple employment advocacy groups have expressed concerns that the legislation hasn’t gone far enough in reducing work comp costs and are calling for more to be done.
Now, Rep. Laura Fine (D-Glenview) appears to be answering these calls by sponsoring new legislation designed to help lower work comp premiums, something she describes as “a big cost burden for companies” both large and small.
The legislation, House Bill 2919, would attempt to do this by establishing a state workers’ compensation insurance fund that would compete directly with private insurers.
“We know there is a lot of workers compensation insurance capacity out there, but we believe if we create this entity, it will serve to bring prices even lower,” she said.
This proposal to create a state work comp insurance fund is interesting, experts say, because it actually runs counter to the current trend in many state legislatures across the U.S. of looking to the private system to help push work comp systems.
Consider the following:
- In Oklahoma, the legislature is considering passage of a bill that would privatize its state workers’ compensation insurance fund
- In Texas, the legislature is considering severing ties with its largest workers’ compensation insurer
- In New York, officials are considering a move to increase the premiums charged by the state fund to match those charged by private insurers
Not surprisingly, HB 2919 is not being openly embraced by industry trade groups and insurers here in Illinois, who view it as too costly and too complex for the state to introduce.
While HB 2919 passed the House Committee on State Government Administration last month, it remains to be seen if it can gain the necessary traction in both the House and Senate, both of which are currently controlled by Democrats, by May 31.
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Source: Property Casualty 360, “Illinois bucks trend in other states; Looks to establish competitive workers’ comp state fund,” Arthur Postal, March 15, 2013