HR0172 99TH GENERAL ASSEMBLY

HR0172 LRB099 07015 MST 30954 r

HOUSE RESOLUTION

WHEREAS, High injury and death rates related to the Industrial Revolution spurred dissatisfaction among employees and employers; and

WHEREAS, The first modern workers' compensation law originated in Germany in 1884, whereby a compulsory system of accident insurance was created for high-risk occupations, and Wisconsin was the first state to enact a comprehensive workers' compensation law, with every state following by 1948; and

WHEREAS, In 1909, the Cherry Mining Diaster killed 259 men and boys, inciting public outrage toward the working conditions and compensation for workers harmed on the job, and in response to this tragedy, the Illinois General Assembly enacted the Illinois' Workers' Compensation Act in 1911; and

WHEREAS, This Act represented a "grand bargain" between labor and employers, establishing a "no-fault" system to provide for swift and fair compensation for injuries occurring in the workplace in exchange for workers' forfeiture of rights to common law actions against their employers; this "no-fault" system shields employers from being subjected to litigation brought by injured employees and protects employers from costs for pain and suffering, punitive damages, and other remedies that are available under common law; and

WHEREAS, Workers' compensation insurance is a lifeline for injured employees who, despite their injuries, must continue to provide for themselves and their families; and

WHEREAS, Over 99% of Illinois' employers carry insurance to cover the costs associated with workers' compensation claims; and

WHEREAS, The Illinois' Workers' Compensation Act was amended in 2011, forcing injured workers to surrender significant benefits, with the intent to reduce premium costs that Illinois' employers pay for their workers' compensation insurance, and as a result, employers have netted $315 million in savings as a result of the 2011 legislation; and

WHEREAS, The Illinois Workers' Compensation Commission noted in its 2013 Fiscal Year annual report that the 2011 legislation "produced demonstrable improvements to the workers' compensation environment in Illinois"; and

WHEREAS, According to a study published by the Oregon Department of Consumer and Business Services, Illinois has experienced a 24% reduction in workers' compensation rates between 2013 and 2014, representing the steepest drop in the nation; the National Council on Compensation Insurance, the insurance industry rate-making agency upon which Illinois relies for rate recommendations, has recommended premium rate reductions of nearly 20% since 2011; a 20% premium rate reduction, if fully implemented by insurers, would result in premium savings to Illinois employers of nearly $1 billion; and

WHEREAS, Illinois has a robust workers' compensation insurance industry, with 330 companies offering insurance to employers, representing the second-most profitable line of insurance that is marketed; workers' compensation insurers do not disclose their rate-making formulas; and

WHEREAS, Annual workers' compensation claims in Illinois have dropped from 62,000 in 2003 to 42,500 in 2013, representing a 31% decrease in a 10-year period; and

WHEREAS, Illinois wages substantially outpace those of other Midwestern states; workers' compensation indemnity benefits directly correlate to wages earned and are responsible for 50% of workers' compensation costs; and

WHEREAS, High wages are desirable for the State and are one of the strongest measurable indicators of economic vitality; and

WHEREAS, Further reductions in benefits for injured employees would create additional harm to those employees and their families, placing them in deeper financial peril and possible ruin; such financial peril results in a cost-shift to government-funded safety nets and entitlement programs; and

WHEREAS, Illinois has made great strides in its effort to reduce costs within the workers' compensation system; therefore, be it

RESOLVED, BY THE HOUSE OF REPRESENTATIVES OF THE NINETY-NINTH GENERAL ASSEMBLY OF THE STATE OF ILLINOIS, that we value the workforce of Illinois and recognize that labor is the engine which drives the State's economy; and be it further

RESOLVED, That injured employees, who have provided their labor and made sacrifices for the betterment of the State and its economy, should not be threatened or confronted with additional benefit reductions through further changes to the Illinois Workers' Compensation Act.