Gov. Pat Quinn signed workers’ compensation reform legislation today that supporters say will save the business community hundreds of millions of dollars, but it may not save him from facing workers' compensation as a campaign issue if he decides to run for governor again.
Quinn toured the state on a victory lap today, stopping at businesses in Melrose Park, Rockford, Champaign and Marion.
“Today is such an important day. We’re going to be helping the employers of Illinois, the workers of Illinois — all of those who are committed to economic growth — by signing a law that will help our employers in Illinois reduce their premiums for workers’ compensation insurance by a huge amount,” Quinn said in Melrose Park.
Backers of the plan estimate that it will save businesses $500 million to $750 million. The bulk of that savings will come from a 30 percent cut to the rates doctors are paid for treating injured employees. Arbitrators, who decide cases will all be out of a job on July 1. They can reapply but will have to be appointed by Quinn and confirmed by the Senate for three-year terms. Arbitrators can only spend two years of their term working in the same location to prevent them from forming “cozy” relationships with workers. These provisions were spurred in part by an investigation by the Belleville News-Democrat that found Menard Correctional Center employees have been awarded more than $10 million in workers’ compensation benefits. The claims are being investigated by the state. The new law will also:
- Require the use of American Medical Association standards when determining workers’ level of impairment from injuries.
- Apply standards of judicial conduct to arbitrators that are the same as those used for as for the Illinois Supreme Court justices and require them to take additional training
- Allow creation of a provider network of doctors. Injured employees could pick their doctors, but only from this predetermined pool. An injured worker would still be able to visit a doctor outside of the network but could not get a second opinion from a doctor of his or her choice.
House Speaker Michael Madigan shed some light on the behind the scenes process, saying that Quinn was “intimately involved” in negotiations. “Mayor [Rahm] Emanuel of the city of Chicago played a very active and important role on this piece of legislation. It’s not usual for a mayor of a city to get involved with legislation like workers’ compensation before the General Assembly, but Mayor Emanuel chose to do that. He did it. He was very helpful,” Madigan said in Melrose Park.
“At any moment over the last six months this legislation could have been derailed. We could be talking about another missed opportunity for workers’ compensation. Instead bipartisanship showed up. Business and labor worked together. Lawmakers rolled up their sleeves and worked with committed business leaders for reform in our workers’ compensation laws,” said David Vite, president and chief operating officer of the Illinois Retail Merchants Association.
However, Republicans — both in support of and opposed to the plan — said that it did not spread sacrifice evenly. They complained when the bill passed that asking doctors to reduce their rates by 30 percent was an unfair hit to the medical community.
Others have called the savings estimates into question. “I think the actual cost savings are suspect, in part because the range is so great,” said Doug Whitley, president of the Illinois Chamber of Commerce. “I don’t think anybody genuinely knows what the cost savings are going to work out to be.”
He said insurance companies will not start to drop employers’ workers’ compensation insurance premiums until they see that the plan cuts costs. “Realistically, those rate reductions probably will not begin to appear for the next two or three years. … That’s going to take some time to show up.”
Whitley said the Illinois Chamber of Commerce, which remained neutral on the new law, plans to push the issue in the 2012 and 2014 elections. “We should not have to wait another five [or] six years to go back.” He said Illinois must continue to reform its system to be competitive with other states. “The political leadership has to appreciate, understand, recognize that workers’ compensation is not a static action. … Even if we make progress in Illinois, that doesn’t mean that other states didn’t do things similarly. There’s a keeping-up-with-the-Joneses aspect to this.”