After the workers’ compensation system in Illinois was redesigned to compensate injured workers, payments have now fallen below its neighboring states including Indiana and Wisconsin. This comes after a budget impasse at the state’s capital before its final approval for the current fiscal year. This legislative move is considered a win for businesses that can now reduce the once negative impact of making high cost payments for workers’ compensation benefits for their employees.
Controlling the ever-increasing high costs of workers’ compensation payments in Illinois is long overdue. Because of that, workers comp reforms were initiated to generate substantial medical savings for the state. Information released in the WCRI report show that medical payments for an average work comp claim in Illinois are significantly lower than Iowa (approx. $16,000), Wisconsin (approx. $17,700) and Indiana (approx. $18,800).
For many employers in Illinois, workers’ compensation is one of their major expenses of doing business. Many businesses have taken great steps to prevent accidents from occurring because accident/safety prevention helps employees and controlled workers compensation claims. Some of the safety plans that have been incorporated include efforts to maintain a safe and clean work environment that was free from hazardous chemicals and dangerous conditions. Other prevention methods involve:
- Eliminating repetitive tasks that tend to cause injuries.
- Educating employees to follow proper procedures when using equipment to ensure their safety.
- Providing employees preventative devices including back supports and wrist splints.
- Utilizing outside and in-house safety experts, insurance consultants and ergonomists.
- Compliance with all OSHA, state and federal regulations.
Developing Good Employee/Employer Relations
Many employers have been able to minimize the high cost of workers’ comp claims by developing strong relationships with employees. This is because good relations are known to significantly diminish the numbers of questionable and nuisance claims for workers’ compensation benefits. These efforts require:
- Ongoing communication with injured employees to ensure they receive adequate medical treatment to benefit their well-being so they can return to work healthy.
- Provide fair compensation to every legitimate claim while strenuously defending every questionable one.
- When justified, ensuring the injured employee is promptly paid for their medical expenses and lost time benefits.
Reporting and Investigating Work-Related Accidents
The Illinois Worker’s Compensation Act and OSHA (Occupational Safety and Health Administration) require every business employer to report workers’ comp occupational diseases and injuries in a timely and efficient manner. The report must be generated from an investigation handled by the employer that outlines the extent and nature of the event to determine the eligibility of every alleged injury requiring compensation. The investigation and reporting system is required to include:
- A notice to every employee outlining the accident reporting procedures.
- A detailed outline of the chain of command to notify supervisors of an alleged injury.
- Designating someone at the facility or office to collect and hold facts associated with the alleged injury, such as taking witness statements.
When employers make the effort and time to perform a comprehensive active investigation, the business can reduce their workers’ compensation expenses by eliminating fraudulent or questionable claims.
Insured Versus Self-Insured
By law, every Illinois employer has an obligation to provide workers’ comp benefits to any employee injured on the job. This financial obligation must be paid through a state fund, workers compensation insurance company or by the employer as a self-insurer. Some employers have been able to decrease their costs by becoming self-insured while others reap the saving of using insurance companies and state funds. Some of the factors they consider include:
- Because the insurance market is competitive, insurance brokers are able to provide low-cost policies through various workers’ compensation carriers.
- Insurance companies are able to determine the insurance premium and the risks to underwriters and can often provide low-cost policies for many commercial businesses.
- Self-insured trust/pools for most industries are available to help companies lower the cost of being self-insured.
Even though the costs for workers’ compensation benefits has decreased significantly compared to neighboring states, the average cost per claim in Illinois is still significantly higher at 19 percent higher than the median of 17 states participating in the survey. As a part of the survey, the reported claims for compensation involved eight days or more of lost time away from work on average.
- www.wcrinet.org/studies/protected/exec_summaries/cs med16_il-es.html