Senate WC Reform Panel: Expectations Lower than a Worm's Belly

Tuesday, November 30, 2010 | 0

By Eugene Keefe
Keefe Campbell & Associates

Following the sad departure of long-time Illinois employer Olin-Winchester from East Alton, Ill. to Mississippi with about 1,000 jobs, we learned the Republican side of the legislature had a renewed reason to reach across the aisle to Senate Democrats and tell them there is a continuing crisis in Illinois workers’ compensation when all of our sister states have reined in WC benefits to some extent while Illinois has seen double-digit workers’ compensation benefit increases. Several sources now feel Illinois has the third-highest WC costs in the United States.

At the same time, the legislature and governor are also struggling with the almost impossibly massive multi-billion dollar deficit Illinois state government is now facing. At the same time, Cook County Board President-Elect Toni Preckwinkle wants county departments to cut their budgets by 21% between February and the end of 2011. The county faces a $487 million budget gap for the 2011 fiscal year, which begins Dec. 1. We applaud her simple economic approach to the coming crisis. What is so patent about Ms. Preckwinkle’s decision makes it almost insufferable to compare to the current floundering in state government. We urge state leaders to follow the same path to solvency and to stop being credit card junkies and deadbeats in handling your budget. Don’t spend money you don’t have and pay your bills on time.

As we have advised in the past, the governor made a very questionable trade-off to get the endorsement in the last election of the largest Illinois state employee union in exchange for a promise not to do what Ms. Preckwinkle knows had to be done make layoffs. As the No. One cost of government is payroll, this decision by Gov. Quinn, if left in effect, clearly hamstrings any possible effort to cut the spiraling budget deficit. Another problem is when the governor or his staff go on the road to seek out new companies to come to our state, the governor isn’t going to be able to offer lots of tax-incentives to a prospective new employer who might otherwise be interested in this state; the state needs every tax dollar it can get!

In order to try to find urgent short-term and long-term solutions, all sides may have to cooperate in working together to see if there is some way to trim rising WC benefits and potentially bring private-sector jobs to this state. We assure everyone Illinois is certain to lag badly in the home construction industry if and when that market ever recovers in the U.S.—almost every facet of our workers’ compensation system targets construction for wildly high benefits and impossible-to-defend claims. On a similar note, the state of Illinois, County of Cook and City of Chicago all have miserably run workers’ compensation programs that reek of woeful mismanagement and insider politics. When workers’ comp programs for thousands of government employees are poorly run, it poisons all workers’ comp claims handling in the public and private sector. If anyone in any of those governments wants a simple path to get their programs running appropriately, we offer our help at no charge. Our only concern is they might ask for our help and every solid risk management concept we recommend will go right into the nearest shredder because someone’s-cousin’s-uncle might have to go back to work and get off the dole.

Illinois Senate President John Cullerton (D-Chicago) this week established a special six-member, bipartisan committee on Workers’ Compensation Reform. We salute him for having the guts and drive to do so but will see if his clout and contacts can and will make something happen. The panel is expected to hold hearings to review the programs and make recommendations on potential legislation for possible Senate votes. The Workers’ Comp panel will be co-chaired by Mr. Cullerton and Senate Minority Leader Christine Radogno (R-Lemont). Other members include: William Haine (D-Alton); Ira Silverstein (D-Chicago), Kirk Dillard (R-Hinsdale), and Kyle McCarter (R-Lebanon).The Senate panel is to provide a report on WC reform recommendations by January 3, 2010. To reach out to the panel members, we recommend using this link for up-to-date contact information: http://www.ilga.gov/senate/default.asp

For any of our readers who know these folks, our vote on simple and easy ways to implement workers’ compensation reforms remains the same:

1.       Enact agreed legislation mandating the work has to be “the” cause and not “a” cause of the injury or work-related condition.

2.       Enact agreed legislation to formally or informally make UR much more of a required approach for both medical care and lost time.

3.       Cap death, total and permanent or wage loss differential claims at 10 or maybe 15 years, like other states do. Stop forcing business to unnecessarily fund COLA increases on the highest of such benefits in the U.S.

4.       Have at least one Commission panel with a focus favorable to Illinois business. Ask all Commission panels to openly monitor the fairness of the Arbitration staff below to ensure balanced rulings.

5.       Have at least one or may even two justices on the five-member Illinois Appellate Court, Workers’ Compensation Division who will speak for and try to get the panel to occasionally rule for the interests of Illinois business.

We are confident these simple changes would insure Illinois workers with bona fide injuries are still getting solid WC benefits with a substantial double-digit bottom-line savings. In the alternative, another idea is to simply repeal some of the 2005 Amendments to the Workers’ Compensation Act which raised permanency values (other than body as a whole) 7.5% and increased the cap on wage loss differential awards to reach a multi-million dollar level on some claims.

We have polled a number of insiders at the Commission since this announcement. They all quietly agree these actions by the Senate may result in either nothing of interest or modest window-dressing type changes. Remember, the Democrats control the governor’s mansion and have majorities in the Senate and House. In our view, the Illinois Supreme Court is also strongly pro-Democrat and has not issued a pro-business ruling in the workers’ compensation arena in over a decade. But also remember, Illinois citizens elected or voted to retain all of them and they have the mantle and we have to all respect their position and responsibility. For those reasons, we don’t see sweeping reforms in the offing but let’s hope they listen to employers across the state and for the first time in over a decade, start to give them and their cohorts in other states “hope” and “change.” (Where have we heard those two words before?)

Whatever it is, we will be there watching and reporting any and all developments. If possible, one or more of our partners may testify in the coming hearings. We ask our readers to tell us your major beefs, give us some examples of abuse and we promise to relay them unedited to the Senate committee members and Senate President Cullerton. We appreciate your thoughts and comments.

Eugene Keefe is a founding partner of Keefe Campbell & Associates, a Chicago workers' compensation defense firm. This column was reprinted with his permission from the firm's client newsletter.