The key components of the recent workers compensation reform bill are aimed at reducing costs:
- 30% reduction in the Medical Fee Schedule
- Utilization of preferred provider organizations (PPO’s) which will heighten competition
- Elimination of lifetime wage differential payments
- Improved efficiencies in medical bill processing and automation
While these workers compensation measures are welcomed by Illinois businesses... the savings by the insurance carriers won’t be known for some time. I believe the immediate 8% rollback on the rates was more of a political “feather in the cap” rather than a true measure of what this reform package will bring to Illinois businesses.
According to the NCCI, insurance companies in Illinois saw a combined ratio of 123% in 2010. And, the proposed overall rate change for our workers compensation premiums will be an increase of 3.5% for 2012.
- Manufacturers 4.2%
- Goods and Service Companies 3.7%
- Contractors 2.3%
- Clerical 1.2%