Illinois Governor Bruce Rauner has said that he wants further “reform” of the state’s workers’ compensation system, with the stated goal of reducing the cost of doing business in the state.
This argument — that restricting the rights of workers will help businesses by reducing the premiums they pay for workers’ compensation insurance — has been contradicted by two recent studies by the Occupational Safety and Health Administration (OSHA) and NPR/Pro Publica. Those studies showed that any cost savings from recent reforms have mostly benefited insurance companies.
This was the demonstrable case in Illinois, where a workers’ compensation reform package was passed into law in 2011. The Oregon Department of Consumer and Business Services studied the results and found that while there was a steep drop in workers’ compensation rates — a 24 percent decrease between 2012 and 2014 — there was no corresponding drop in insurance premiums paid by employers. Instead, the insurance companies kept the difference, estimated to be between $625 million and $1 billion.
Attacking employees’ right to compensation hurts workers, and it does not help employers. Workers’ rights must be protected from further so-called “reforms,” and employers who are fed up with the high cost of insurance should support state regulation of insurance premiums.