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Tuesday, August 20, 2019

Policy analyst: Illinois could learn from Wisconsin's workers' compensation reform proposals

By Emma Gallimore | Feb 23, 2016

While the budget debate drags on in Illinois, and structural reforms to state systems remain sticking points to progress, neighboring Wisconsin is poised to pass workers' compensation reform during its spring legislative session.

A proposal which passed unanimously in the Wisconsin Committee on Labor and Government Reform, and which awaits further action in both legislative chambers, would, among other things, lift requirements that employers pay for non work-related injuries. 

Currently, Illinois’ overall cost for workers' compensation is significantly higher than Wisconsin’s, and Wisconsin is higher than most other states, according to analysis from the Illinois Policy Institute. 

“The one thing they put in that deal that is directly applicable to the conversation in Illinois is some of the causation ideas,” said Michael Lucci, an analyst for the Illinois Policy Institute.

Currently, Illinois has a 1 percent causation standard, meaning that if the workplace is responsible for the injury in any way, the employer pays in full. The proposal in Wisconsin would make the employer liable only for the percentage of the disability that was sustained during employment.

“If the workplace is 25 percent responsible, then the employer pays 25 percent of the benefits,” Lucci said.

Illinois Gov. Bruce Rauner wants to take the standard a step further and create a system by which the employer only pays out if the workplace holds 50 percent responsibility, or more, for the injury.

Other changes to workers’ compensation in Wisconsin were fairly minor and will probably have only a small impact on the overall cost of workers’ compensation in the state, according to Lucci.

However, the changes seem to be moving Wisconsin in the right direction, he said. 

The Wisconsin proposal reduces the statute of limitation on compensation claims from 12 to six years, requires regular review of the permanent partial disability schedule ratings, and enables employees to return to work on limited hours without decreasing their benefits.

“In general, Illinois would be well-advised to move forward on similar reforms,” Lucci said. “However, Illinois needs other reforms too.”

Lucci cited wage replacement levels and award levels for permanent partial disabilities as areas where Illinois needs to improve.

“We give people incentives to do the wrong things," he said. "There are ways to reform the system so that everyone wants the best outcomes. There are reforms to be made in Illinois to address those issues.There are reforms for wage replacement. To repeal mistakes that were made in the 2005 and 2011 workers’ comp bills."

The nature of employment is changing as well, Lucci said, and therefore the law needs to change accordingly.

He said fewer people are working physical jobs in factories and more are spending long hours in front of computer screens. 

“All states, including Illinois and Wisconsin would be well-advised to consider a more adaptive approach to workers' comp that will better suit the changing 21st century workplace,” Lucci said.

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