Reforms Will Save Employers $500 Million, Protect Workers,
and Modify Workers’ Compensation Commission
MELROSE PARK – June 28, 2011. Governor Pat Quinn today signed House Bill 1698, a comprehensive overhaul of Illinois’ workers’ compensation system. The reforms – backed by numerous groups, including the Illinois Manufacturers’ Association and the Illinois Retail Merchants’ Association – are expected to save Illinois businesses between $500 and $750 million dollars, while continuing protections for injured workers. The reform package also includes a major overhaul of Illinois’ troubled Workers’ Compensation Commission.
“We began this process months ago with the belief that we needed to maintain essential protections for injured workers, while ensuring that the system treats our businesses fairly,” said Governor Quinn. “We brought everyone to the table to make sure that these reforms were robust, and created a system in which everyone – workers, businesses and the state of Illinois – are treated fairly. This overhaul is going to improve the strength of our state’s business climate and economy, and I want to thank the bill’s sponsors and all those who voted for real reform.”
Illinois currently has some of the highest workers’ compensation premiums in the nation, and the new law contains a number of provisions designed to reduce the burdens on business owners. Among the reforms is a reduction of 30 percent to the medical fee schedule, which will save employers up to $500 million – as much as 14.9 percent in premiums. The law also requires that physicians and arbitrators to use standards set by the American Medical Association when determining impairment and disability. It also creates workers’ compensation provider networks to ensure that employees receive cost-effective treatment that improves patient outcomes.
A number of additional protections were put in place for injured workers, including enhanced enforcement against employers who fail to maintain proper workers’ compensation coverage. The bill also creates a process for electronic billing from providers, protecting workers from treatment disruption.
Measures were also put in place to reform the Illinois Workers’ Compensation Commission. Current arbitrators’ terms will end on July 1, and strict performance evaluations will weighed in consideration for re-appointment. Arbitrators will serve three-year terms, must act in an unbiased, impartial manner, and must follow the same ethical rules that apply to judges. New arbitrators must be licensed attorneys. Additionally, all workers’ compensation claims by commission appointees or employees will be heard by an independent arbitrator, and not arbitrators within the commission.
The bill also stipulates that an advisory board will be appointed to review and report to the General Assembly about the state's workers’ compensation program, including needed improvements and adherence to best practices.
In recognition of the transformative effect this law will have throughout the state, the Governor visited four locations (Melrose Park, Rockford, Champaign, and Marion) to highlight the signing of HB 1698 and its landmark reforms.
The legislation was sponsored by Rep. John Bradley (D-Marion) and Sen. Kwame Raoul (D-Chicago), with strong support from Senate President John Cullerton (D-Chicago), House Speaker Michael Madigan (D-Chicago), and Senate Minority Leader Christine Radogno (R-Lemont).
Additional Quotes on Workers’ Compensation Reform
“The bill the Governor signed today is an important first step toward creating a system that enables Navistar and other Illinois businesses to be more competitive and productive going forward. These reforms demonstrate that Governor Quinn and our state leaders are paying attention to the needs of business and that they are serious about growing our economy.”
-Dan Ustian, chairman and CEO, Navistar, Inc.
“The rules and regulations put into place afford companies like Ingersoll balance between ensuring that injured employees receive the necessary care while allowing the company to manage their medical expenses. This needed reform helps Illinois manufacturers compete in the global marketplace.”
-Tino Oldani, President and CEO, Ingersoll Machine Tools
“On behalf of the members of the Illinois Retail Merchants Association (IRMA), we are proud to stand with Governor Quinn today as he signs the first meaningful reform of Illinois’ workers’ compensation reform system in the last 35 years. While there may be critics, this clearly moves reform significantly down the road and sends the message that Illinois is serious about economic development. Many thanks are owed to the Governor, Senate President Cullerton, House Speaker Madigan, Senate Republican Leader Radogno, and the members of the Assembly who voted in favor of this legislation.”
-David F. Vite, President, Illinois Retail Merchants Association
"This legislation takes a vitally important first step toward making Illinois' business climate more competitive with other states. Experts predict savings for employers of nearly $500 million a year. We applaud the governor and those legislators who worked so hard to keep the integrity of the Workers' Compensation system while reducing the costs."
- Gregory W. Baise, President and CEO, Illinois Manufacturers' Association