- NCCI recommends a 10.9% decrease in insurance rates for 2018.
- Recommended cuts since 2011 now total 36.5%.
- In Illinois, insurance companies aren’t required to follow these recommendations.
- Legislation to lower workers’ compensation costs for employers sits on the Governor’s desk.
CHICAGO—(ENEWSPF)—July 27, 2017. This week, the National Council on Compensation Insurance (NCCI) released the latest figures on what Illinois employers should expect to pay for workers’ compensation insurance next year – a 10.9% decrease in their premium rates compared to this year. This is the fifth consecutive recommendation for lower rates for employers following the 2011 workers’ compensation benefit cuts enacted by the Illinois General Assembly, and follows the third largest drop in the nation in 2017. In total, Illinois employers should have seen a 36.5% reduction in their workers’ compensation rates since the 2011 benefit cuts, according to the NCCI.
But in Illinois, insurance companies aren’t required to follow those recommendations, and the industry has increased its own profit margin rather than pass savings on to Illinois employers.
“Common sense will tell you that if insurance companies are paying out less to injured workers and paying less to health care providers, costs should also go down for Illinois employers,” said Sean Stott, Director of Governmental Affairs for the Midwest Region of the Laborers’ International Union of North America. “But that’s not happening. In fact, insurance profits have increased more than 400% since the 2011 benefit cuts.”
“The Legislature passed bills that would hold insurance companies accountable for what they charge Illinois employers and create a more competitive market,” said Stott. “If Governor Rauner truly wants to save Illinois employers money, he would sign those bills into law.”
This year’s recommendation is the fifth time since 2011 in which the NCCI has recommended lower rates for workers’ compensation insurance, including the second consecutive double-digit percentage reduction. The NCCI did not make a recommendation in 2016.
In 2011, the General Assembly made the following changes to the workers’ compensation system in Illinois:
- Cut medical fee payments by 30%;
- Expanded the use of American Medical Association (AMA) Guidelines for assessing permanent partial disability (PPD) benefits (despite the AMA’s insistence that this is an inappropriate use of their Guidelines);
- Restricted PPD wage differential benefits to the later of age 67 or 5 years after injury;
- Cut PPD for most carpal tunnel cases by 20% and reduced the basis upon which benefits are calculated by 7.5%; and
- Allowed employers to limit injured workers’ choice of medical providers.
National Association of Insurance Commissioners Report on Profitability By-Line-By-State in 2015: http://www.naic.org/prod_serv/PBL-PB-16.pdf
House Bill 2525, which, among other things, requires the Department of Insurance to review premium rates and prohibits rates from being “excessive,” passed both chambers and was sent to the Governor on June 29, 2017.
House Bill 2622, which creates a not-for-profit workers’ compensation insurance company to compete with other insurers, passed both chambers and was sent to the Governor on June 23, 2017.