As the Illinois General Assembly enters its third month of overtime session without a state budget for the fiscal year that started July 1, efforts to amend the workers’ compensation laws in Illinois remain at the forefront of the legislative agenda.  

Governor Bruce Rauner (R) entered office in January and immediately began advocating a series of policy proposals referred to as the “Turnaround Agenda.” One component of the Turnaround Agenda was a series of amendments to the Workers’ Compensation Act. The Governor’s proposed amendments involved:

  1. Establishing a “causation” standard that requires employees to demonstrate that a workplace incident is a “major contributing cause” of a worker’s injury. To satisfy this standard, the employee would need to demonstrate that the accident is at least 50 percent responsible for the injury compared to all other causes;
  2. Requiring the Illinois Workers’ Compensation Commission to utilize the American Medical Association guidelines in evaluating a worker’s disability and allowing the Commission to review an independent medical examination as part of determining an award;
  3. Limiting the scope of which employees are considered to be “traveling employees” so that an employee would only be able to recover a workers compensations award if the travel was necessary for the performance of job duties; and
  4. Reducing the medical fee schedule by 30 percent for all services except evaluation and management and physical medicine.

While strenuously advocating for these positions, the Governor failed to introduce the proposals in legislative form. After urging the Governor to do so, Speaker Michael Madigan (D – Chicago) introduced a series of amendments to House Bill 1287 that he claimed represented the Governor’s proposals. With Democrats voting against the amendments and Republicans voting “present” as a form of protest against the Speaker’s legislative maneuver, the amendments were not adopted. Following their defeat, the Speaker then introduced a series of amendments largely targeting insurance companies, while leaving in place existing provisions in the law regarding the medical fee schedule, causation, and standards for evaluating disabilities. As it passed the House, House Bill 1287 provides that insurers who offer workers’ compensation policies in Illinois will need to submit rates to the Illinois Department of Insurance for approval and will allow for the refund of excess premiums upon a determination that rates are excessively high. The bill also limits the scope of the traveling employee doctrine, allows an employer to seek recovery from an employee's prior employers for certain repetitive stress injuries, provides incentives for employers who establish safety programs, and establishes a Workers’ Compensation Premium Rates Task Force.  

While these amendments were being debated in the House, Governor Rauner prepared his workers’ compensation proposals in legislative form, which were filed by Senate Minority Leader Christine Radogno as an amendment to Senate Bill 994. The amendment was assigned to the Senate Judiciary Committee where it failed on a partisan roll call.  

After the defeat in the Senate Judiciary Committee, the issue appeared to reach a deadlock. However, earlier this week, State Senator Kwame Raoul (D – Chicago), Chairman of the Senate Judiciary Committee, introduced a new workers’ compensation proposal as an amendment to Senate Bill 162. Sen. Raoul’s proposal would:

  1. Clarify when an injury arises out of and in the course of employment;
  2. Establish a traveling employee standard;
  3. Codify an existing practice that allows parties to agree not to utilize an impairment report;
  4. Establish an electronic claim system;
  5. Establish a Workers’ Compensation ombudsman; and
  6. Create a legislative commission to review the Workers’ Compensation Act.

Notably, the proposal would not impose obligations on insurance companies in the same manner as House Bill 1287. Sen. Raoul’s proposal passed the Senate on the same day it was introduced on a partisan roll-call, 36-19, with Democrats voting in favor and Republicans voting against the proposal.  

In response to the passage of Sen. Raoul’s legislation, Governor Rauner issued a memo to members of the General Assembly. In his memo, Governor Rauner reiterated his insistence on adopting a higher causation standard, but offered more nuanced positions on other aspects of his prior proposal. According to the memo, arbitrators should be allowed to use the AMA guidelines as a sole factor in determining awards when deemed appropriate, reductions in the medical fee schedule should be limited to instances where rates are out of line with Medicare rates, and penalties on employers should be limited.  

Though Governor Rauner and legislative Republicans remain opposed to the proposal, Governor Rauner’s memo marks the first time that the parties have engaged in a substantive debate on the issue. Given the continued impasse on the state budget and the Governor’s demand that the legislature adopt his Turnaround Agenda prior to dealing with the state budget, it is apparent that workers’ compensation will remain high on the Springfield agenda.