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Illinois considers legislation to create Workers’ Compensation Insurance State Fund

| May 8, 2014 | Workers’ Compensation

Illinois law requires all employers to carry workers’ compensation insurance so they can provide benefits to workers who are injured on the job. Currently, employers must choose between self-insuring and taking out a policy through a private insurance company. However, a bill introduced in 2013, the Workers’ Compensation Insurance Fund Act, would create a state fund to provide workers’ compensation insurance coverage as an alternative to these options. If the bill passes, it could offer benefits for both employers and employees.

Potential gains

One goal of the state fund is ensuring every employer has access to workers’ compensation insurance. State funds typically offer premiums that are competitive with the prices private insurance companies offer. With lower workers’ compensation insurance premiums, Illinois employers would have the opportunity to invest more money in training, new equipment and other means of improving workplace safety.

State insurance funds can also promote a safer workplace by helping employers adopt more effective strategies for injury prevention. The bill Illinois lawmakers are considering does not specify what kind of benefits state fund policyholders would be entitled to. However, if Illinois adopts a model similar to what other states use, employers may gain access to services private insurance companies do not provide. As an example, employers in New York who hold state insurance fund policies are entitled to special services focused on improving workplace safety and managing risk.

Effects on claims

The creation of a state insurance fund would not change the way employees make claims, and it would not affect the likelihood of a claim being approved or denied. The Illinois Workers’ Compensation Act establishes standards for coverage and reporting deadlines that insurers, employees and employers must observe, regardless of what kind of organization issued the insurance policy. Furthermore, a state body, the Illinois Workers’ Compensation Commission, oversees all workers’ compensation claims and appeals.

Under current state law, employees must report any injuries to their employers within 45 days. Employees then have three years to file a claim with the Illinois Workers’ Compensation Commission, although it often benefits employees to file the claim soon after the incident. Evidence of the injury and workplace conditions may become more difficult to document if employees postpone making the claim.

If the Workers’ Compensation Insurance Fund Act passes, none of these standards or considerations will change. However, Illinois lawmakers are presently considering other workers’ compensation legislation that could more directly affect employees. This is one reason injured employees can benefit from seeking legal advice about current workers’ compensation laws before filing a claim.