Workers' comp studies show Illinois remains a high-price state

By John Breslin | May 24, 2019

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Illinois remains a high-price state when it comes to workers' compensation, with costs driven by substantial attorney involvement in cases and medical-legal bills, according to a recently published study by an independent research institute.

Massachusetts-based Workers Compensation Research Institute (WCRI), which studied Illinois and 17 other states including neighbors Indiana, Iowa and Wisconsin, found that Illinois had one of the highest medical-legal expenses per claim, the highest maximum wage benefit at 133 percent of average weekly wage, and workers out longer on temporary disability benefits.

“Higher than typical medical payments per claim were due to prices paid for professional services and higher utilization, largely driven by physical medicine,” said Ramona Tanabe, executive vice president and counsel of WCRI. Tanabe noted modest increases in professional services, largely because they are tied to the consumer price index.

But founding partner Eugene Keefe of Chicago-based workers' compensation defense law firm Keefe, Campbell, Biery & Associates warned that the metrics used by WCRI can be misleading, given that Chicago, at the fulcrum of much of the economic activity in the state, is a high-priced city. It has more expensive medical costs than Indianapolis and St. Louis, and can hardly be compared to largely rural Iowa.


Chicago workers' compensation defense attorney Eugene Keefe  

Keefe, who has decades of experience defending clients in workers' compensation cases and is an adjunct professor of law at Chicago's John Marshall Law School, advises that instead of comparing Illinois with its neighboring states, a better barometer would be Illinois' ranking in the biennial Oregon Study of insurance premium rates paid by employers.

"Illinois was in very bad shape 10 years ago, third highest [ranked No. 48]," Keefe told the Record. "And that was behind Montana and Alaska with their oil workers, so you could say we were last."

In more recent years, Illinois' rates have fallen and, according to the latest report published in 2018, the state now has the 21st highest insurance premium rate, lower than Wisconsin, just above Iowa, and well above Indiana, which has the second lowest rate in the country. 

"[The Oregon] analysis has a national scope, and is more reliable" than the WCRI study, Keefe said.

But Keefe added that the WCRI study does a good job in showing that Illinois is expensive, and it is clear that companies downstate are paying a price because Chicago is such a nationally important city. Further, the attorney said that the two biggest employers, the city of Chicago and the state itself, are among the biggest drivers when it comes to workers' compensation costs. 

To tackle that issue means driving headlong into the often murky politics at both the state and city level, Keefe said. He cited the example of Illinois prison guards, who are among the highest paid in the country, which impacts benefits when they are injured. And the state does a "bad job" getting guards back to even sedentary work, Keefe said.

While former Gov. Bruce Rauner failed to push through much of his agenda, which included workers' compensation reform, Keefe credits him with appointing quite a number of "reasonable" hearing officers. The attorney believes that is a key reason for the rise from No. 47 on the Oregon Study's insurance premium ranking.

Much room for improvement

Downstate employers say they continue to face pressure from workers' compensation claims costs, including high premiums.

"[Premiums] are not shooting up, but they are still twice as much as Mississippi, so it is not too hard to understand why businesses do not want to move to Illinois," Mike Walters, executive director of the Southern Illinois Employers' Association, told the Record. "And legislators are not listening because they are too close to trial lawyers and the unions."

Walters believes the unions should be asking themselves if they want to keep union jobs and workers' dues in Illinois.

"There are so many things that need to be changed, including causation," he said.

A worker has to show an injury was caused through his work to receive workers' compensation benefits, but there are cases where individuals are hurt in, for example, a pickup basketball or softball game, Walters said. They then walk into work and claim the injury occurred on the employer's property, he added.

"Even if you prove they hurt themselves in a softball game, the lawyer will argue it was exacerbated by an injury at work," Walters said.

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Keefe, Campbell, Biery & Associates, LLC Workers Compensation Research Institute

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