IL to Consider State Fund, But is it a Solution?

Springfield, IL (WorkersCompensation.com) — Esquire Eugene Keefe and Illinois Policy Vice President Michael Lucci said the recent proposal for a workers’ compensation state fund is fake.

Both based out of Chicago, the workers’ compensation counsel and policy expert said HB 2622 is yet another political ploy of smoke and mirrors by Democrats to keep away from the real issues.

“The legislators do not want to address the real cost drivers of Illinois’ workers’ comp system. So they pass legislation like this so they can say, ‘Workers’ comp is a problem and we passed legislation to fix it,’” Lucci said. “This legislation will not fix anything. What they are trying to do is control and change the narrative of workers’ comp in Illinois.”

Ultimately, the Governor becomes the scapegoat, Lucci said. He explained if the bill does not pass, he can be blamed and not the legislators, in passing bogus legislation to begin with.

“Illinois has some of the lowest profit rates for workers’ compensation insurance. They are spinning it by saying we created a state-run authorized nonprofit (for) workers’ compensation insurance…We did our part, therefore let’s move on to other things,” Lucci said.

Sen. Daniel Biss (D-Skokie), who sponsored the bill, said that there will be “…one or more loans to the Illinois Employers Mutual Insurance Company (the Company) in an amount not to exceed an aggregate amount of $10,000,000 from the Illinois Workers' Compensation Commission Operations Fund for the start-up funding and initial capitalization of the Company,” according to the proposed legislation. The text adds that it will be a nonprofit, independent public corporation.

Sen. Biss did not respond to WorkersCompensation.com for comment by press time.

Like Lucci, Keefe said “somebody came up with the idea that Illinois insurers are holding profits, or skimming profits.” The idea of state fund may sound good, said Keefe, but it is not reality.

“The big picture of what they are doing is a joke. The whole thing is nonsense and all it is doing is confusing everyone,” he said.

Rep. Laura Fine (D-Glenview) is the first among a list of dozens of sponsors for the HB 2622 that states that the company “shall not receive any State appropriations or funds, except for an initial loan or loans,” according to the bill.

Rep. Fine did not respond to WorkersCompensation.com for comment by press time.

Lucci said the problem with Illinois is that claim costs are the highest in the country and the legislators’ solution is to try to regulate profits of insurance companies.

“Their solution does not fit the problem,” he said. “The real solution is to study what drives up the cost of the claims and amending the law to control that. …It is a way to avoid changing anything in the workers’ compensation system. They are saying ‘instead of changing, let’s just create a state-based insurance company to compete with the evil insurance companies in Illinois who profit way too much.’” 

It’s bogus, Keefe said. “The problem Mike Lucci and I have is stuff like this goes in all different directions,” he said, adding collapse is inevitable. “I don’t see meaningful reforms and changes. I don’t know if and when we will.”

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