Illinois taxpayers bear the costs of workers’ comp settlements

Illinois’ workers’ compensation laws are so outdated that it costs taxpayers more than in any other state in the region and hinders the state’s economy, according to the Illinois Policy Institute (IPI).

A July report by the institute states that workers’ comp insurance and income injured workers receive while out of work costs state and local government $1 billion annually. Workers’ compensation is the third-most burdensome unfunded mandate for municipalities. The laws, which IPI claims are at least 100 years out of date, also drive out private-sector businesses due to Illinois’ impractical regulatory environment.

“By simply bringing costs in line with neighboring states, lawmakers would attract investment from the private sector as well as generate needed taxpayer savings,” IPI writer Vincent Caruso wrote.

It is unclear from the report if the state uses a standard formula to calculate settlements, as cases vary in the level of damage and payment amounts. A worker hit by a vehicle while collecting signs earned $26,100 in 2013, and another worker was paid $125,000 for injuries from lifting a heavy garbage can.

Many workers earn large settlements for minor injuries and even return to work within days, IPI states. More than 35 percent of workers who were given a workers’ comp settlement were back at work the next day.

“The state’s costly workers’ comp law is no fault of individual workers,” Caruso said. “Rather, it’s state lawmakers who have failed to reform it to bring costs in line with surrounding states.”

In Belleville, the city covers the costs up to $250,000, which means taxpayers are on the hook for those payments and the city’s insurance covers settlements that exceed that amount, according to IPI.

Belleville has spent more than $2.5 million on workers’ compensation settlements since 2013. The city has spent more than $420,000 so far this year, but the report claims that 2016 was the most expensive year for worker payouts with compensation settlements of more than $662,000.

The report also examines the necessity and history of workers’ compensation laws. The institute states that because of the nature of the settlements and the costs involved, plus recent changes in the workplace due to technology, it is time for lawmakers to reform the laws.

“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,” Caruso wrote.

This article was first published by Metro East Sun.

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