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What specific measures can Illinois take to try to bring its workers’ compensation insurance costs in line with neighboring states?
Workers’ compensation costs for Illinois employers are higher than any of its bordering states, according to Jay Shattuck, executive director of the Illinois Chamber Employment Law Council. Illinois’ average total cost per claim, he says, is $21,335 - compared to Indiana’s $10,517, Wisconsin’s $11,342, Iowa’s $14,292 and Missouri’s $17,309.
“The interesting thing about Illinois, for 2009, based on data from the National Council on Compensation Insurance, is that Illinois is actually experiencing an increase,” Shattuck said. “Most other states are lowering their workers’ compensation costs. The past three or four years, Illinois rates have increased around 14 percent per year, when costs - over
that same period - have dropped by 15 percent. So we’re looking at a 29 percent difference, and that’s startling in light of what’s occurring nationally.”
Shattuck says the often-heard argument that Illinois can’t compete with Indiana on a labor basis because Indiana doesn’t pay it workers as well does not hold water. “In Indiana, they’re second in terms of comparative costs (for workers’ comp) and they’re ranked 15th in terms of the amount of benefits paid out,” he said.
Fraud is among the key reasons Illinois’ workers’ comp system is so costly to employers, according to Shattuck. “In 2005, we put some fraud provisions in place, but Gov. (Rod) Blagojevich cut them from $900,000 to $500,000,” he said. “Added to that, we’re having trouble with states’ attorneys actually prosecuting workers’ compensation fraud. They’ll go
after a retail shoplifting case involving a couple hundred dollars, but on workers’ comp cases involving tens of thousands of dollars, many states’ attorneys are reluctant to prosecute…and that really
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