Timely Workers’ Comp Reforms

Prices for workers’ compensation insurance are inching up after decreasing and then flat-lining for the past few years, according to Towers Watson. The global professional services firm’s most recent Commercial Lines Insurance Pricing Survey (CLIPS) showed that pricing increases for workers’ compensation insurance for the first three months of 2011 were larger than the industry has seen for some time.

It’s a good thing for businesses that at least two of the most expensive states for workers’ comp coverage – Illinois and Oklahoma – have passed legislation that significantly changes the workers’ compensation systems in those states.

Legislation approved in Oklahoma was a complete rewrite of the state’s Workers’ Compensation Act. It emerged from the House just three days before lawmakers were due to adjourn at the end of May. The 200-page measure, Senate Bill 878, focused on reducing the fee schedule for medical reimbursement rates and speeding up the time it takes to get injured workers back on the job. It also requires adherence to a nationally recognized set of treatment guidelines.

Similarly, Illinois legislation seeks to reduce costs by reducing medical fees. It also calls for more intensive review of workers’ compensation claims to reduce instances of fraud. Supporters expect it will save businesses at least $500 million in workers’ compensation costs.

While the bill addresses some of the reforms advocated by insurance trade groups such as the American Insurance Association, the AIA believes it is still ambiguous enough and flexible enough “to allow for continued systemic abuse.”

The Illinois legislation does reduce payments for carpal tunnel syndrome, claims for which have been central to an investigation into a high number of workers’ compensation claims generating from Menard Correctional Center. Many of the more than $10 million in workers’ comp claims by staffers at the center were for carpal tunnel syndrome from locking and unlocking doors, the Associated Press has reported. A study commissioned by the state found that locking and unlocking prison doors doesn’t cause repetitive strain injuries.

Oklahoma Gov. Mary Fallin has signed the workers’ comp measure, which was a stated priority for her during this year’s legislative session. Gov. Pat Quinn had not signed the Illinois legislation as of this writing, but he supported it and has previously announced his intention to sign the bill.

Topics Legislation Workers' Compensation Illinois Oklahoma