Illinois industry shoulders the burden of the highest workers’ compensation costs in the region. But what many Illinoisans paying some of the nation’s highest property taxes may not realize is that they’re picking up the tab for those costs, too.
The city of Belleville offers one example of the high price of workers’ comp for local governments. Since 2013, Belleville has spent more than $2.5 million on workers’ comp settlements, according to city records of Illinois Workers’ Compensation Commission contracts. In 2018 alone, the city has so far spent $420,000 settling workers’ comp claims. Between 2013 and 2018, Belleville’s costliest year for workers’ comp payouts was 2016, during which the city spent $662,000 on workers’ comp settlements.
The claims vary widely in their severity and cost. One claim settled in 2013 involving a worker “hit by a car while collecting signs” resulted in a payout of $26,100. Meanwhile, a comparatively less serious claim filed that year resulting from “lifting a heavy garbage can” earned one worker a $125,000 settlement.
Many cases in which workers reported sustaining only mild injuries, and returned to work the next day, nonetheless resulted in large workers’ comp settlements, records show. One worker who reported an injury sustained while landing awkwardly exiting a firetruck collected $39,750. Another worker who reported an injury after pulling a hose collected $24,000. Both returned to work the day after their respective incidents. In fact, more than 35 percent of workers who received a workers’ comp payout between 2013 and 2018 returned to work the day after the reported accident date – amounting to nearly $360,000 in settlements.
A city of Belleville human resources official confirmed payouts for workers’ comp settlements are paid directly by the city, unless a settlement surpasses $250,000, in which case insurance coverage kicks in.
To be sure, workers sustaining the most extreme injuries – “dealing with a combative juvenile” or “trying to remove a door at a fire” – were more likely to receive six-figure settlements. However, comparably ambiguous and modest claims – “testing heavy equipment” or “hauling hose line” – also delivered at least $100,000. Five workers who reported “repetitive trauma” received between $19,300 and $33,000.
Workers’ comp insurance as well as provisional income injured workers receive while off the job collectively cost state and local governments $1 billion each year in Illinois, a 2017 Illinois Policy Institute report found. And local governments bear the brunt of this mandate, shouldering $727 million of that nine-figure annual bill.
The state’s costly workers’ comp law is no fault of individual workers. Rather, it’s state lawmakers who have failed to reform it to bring costs in line with surrounding states. A 2015 report by Illinois’ Local Government Consolidation and Unfunded Mandates Task Force found workers’ comp to be the third-most burdensome unfunded mandate for municipalities.
This runs parallel to the effect the state’s workers’ comp law has on the private sector, driving businesses across state lines toward more practical regulatory environments.
While it’s necessary to have a system in place through which workers are made whole for workplace accidents, Illinois’ workers’ comp law has failed to evolve with the changing landscape of modern workplace environments. Originating in 1911, an era in which workplace danger was commonplace, Illinois’ workers’ comp law was established to guarantee medical coverage and replacement income to workers temporarily immobilized in the event of a work-related injury. But as innovations have transformed the workplace – and therefore workers’ needs – Illinois’ workers’ comp law has remained a century behind.
Illinois would stand to gain from rehabilitating its workers’ comp system to better reflect the workplace of the modern age. By simply bringing costs in line with neighboring states, lawmakers would attract investment from the private sector as well as generate needed taxpayer savings. Positive reforms would include limiting Illinois’ maximum wage-replacement rate to 100 percent of the state’s average weekly wage, and tying the medical fee schedule to Medicare reimbursement rates or private insurance reimbursement rates.
Reforming the state’s outmoded workers’ comp system would free up public funds, allowing municipalities – including Belleville – to introduce tax relief and strengthen core services while preserving worker safety.