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May 27, 2005

Governor Blagojevich congratulates General Assembly for passing unprecedented reforms to the Workers’ Compensation system
Bill provides fundamental change for the first time in almost 20 years

SPRINGFIELD – Gov. Rod R. Blagojevich tonight applauded the Illinois House for passing the first comprehensive changes to the workers’ compensation system in almost 20 years, House Bill 2137.  The Illinois Senate overwhelmingly approved the measure yesterday.  After the Governor made workers’ compensation reform a priority in his State of the State address, he convened negotiations over several months with business and labor leaders and members of the General Assembly to develop a plan that reduces business costs, increases benefits and fights the fraud that hurts everybody. 
“One of the best ways to make the economy even better and make sure even more people get jobs is by helping businesses reduce their costs.  And if you run a business in Illinois, one of the most expensive costs you face is workers’ compensation insurance.  This reform bill reduces costs for businesses and improves benefits for workers.  And that's good for everyone,” said Gov. Blagojevich.
Illinois is the 19th most expensive state in the nation when it comes to workers’ compensation premiums, and Illinois companies pay 40 percent more for workers compensation than neighboring states Michigan, Wisconsin and Indiana.  According to the National Insurance Crime Bureau, workers’ compensation fraud costs employers $6.5 billion a year.  This agreement addresses all of these issues and more.
“By working closely together, we have crafted this agreement that helps set a medical fee schedule to contain costs, increases important workers’ benefits, cracks down on fraud and cuts the time it takes to resolve claims.  Everybody wanted to do what is best for Illinois, and these fundamental changes in the workers’ compensation system work for everybody.  I look forward to signing them into law,” Gov. Blagojevich added.  
Some of the highlights of the agreement include:
· Implementing a medical fee schedule.  Creates cost containment in workers’ compensation by joining 42 other states in creating a medical fee schedule.  This medical fee schedule will be indexed to the Consumer Price Index (CPI) and will save Illinois businesses millions of dollars annually. 
· Worker benefits to increase substantially.  Increases the minimum benefit for a worker killed on the job to the greater of $500,000 or 25 years of payments (was approximately $400,000 for 20 years of payments).  Increases the burial benefits to $8,000 for fatally injured workers from $4,200. 
· Establishes a fraud unit.  Creates a workers’ compensation fraud statute and investigation unit within the Division of Insurance of the Illinois Department of Financial and Professional Regulation to investigate charges of workers’ compensation fraud, including uninsured employers, and allows for reporting of fraudulent claims by employees.
· Creates a third panel to the Workers’ Compensation Commission.  This will expedite resolution of disputed claims and also expand and expedite emergency hearings to resolve cases within 180 days, which will allow injured workers to receive quicker treatment and return to work earlier.  This will result in claims being heard and resolved faster, which will decrease litigation costs.
“Gov. Blagojevich set a high goal for us in his State of the State address, and we all are so pleased to be this much closer to making reform a reality.  When business and labor work together, we can get great things done for Illinois,” said the bill’s chief sponsor in the Illinois House of Representatives, Representative Jay Hoffman (D-Collinsville).
“These reforms to Illinois' Workers' Compensation system provide fair and balanced benefits to both business and labor.  Illinois manufacturers and other businesses will be able to realize significant cost savings through nationally accepted managed care practices, and everyone will benefit from the pragmatic anti-fraud measures included in these reforms,” Illinois Manufacturers’ Association President & CEO Gregory Baise said.
"It has been 30 years since the Workers’ Compensation Act has been reformed.  The Agreed Bill Process has worked!  The negotiations that have taken place have resulted in an updated workers compensation system, improved benefits for injured workers and cost savings for business,” Illinois AFL-CIO Secretary-Treasurer Michael Carrigan said.
“This is the culmination of many months of hard work and negotiations by all the parties involved.  The agreement will benefit labor, business, and health care providers.  I am very pleased that Senate President Jones gave me the opportunity to work on this noteworthy agreement,” the bill’s Senate sponsor Senator Terry Link (D-Lake Bluff) said.
"I want to commend Gov. Blagojevich for convening this process.  By seeking reform of our workers' compensation system, we may be able to reduce business costs, provide more generous benefits and fight the fraud that is costing our country billions of dollars," State Senator Dan Cronin (R-Elmhurst) said.
“Having been involved with the Illinois Workers’ Compensation system for 17 years, this is clearly the most comprehensive workers' compensation reform in a generation.  It addresses multiple issues, including fraud investigation, cost containment for employers, speeding up the hearing process for both workers and employers, and improved benefits for widows and orphans.  This is a win-win for both employers and employees of the state," Illinois Workers’ Compensation Commission Chairman Dennis Ruth said.
The bill now goes to the Governor.

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