The Illinois Senate passed two House workers' compensation bills last week. Gov. Bruce Rauner made workers' compensation reform one of the main pillars to his economic agenda and a prerequisite for a full budget deal. Illinois hasn't had a complete budget since July 2015.
The first bill (H.B. 2525) creates new penalties against employers and would prohibit insurers from charging excessive rates that produce profits that are "unreasonably high for the insurance provided or if expenses are unreasonably high in relation to the services rendered." This bill is back in the House for approval.
The second bill (H.B. 2622) creates the Illinois Employers Mutual Insurance Company, a public corporation to sell workers' compensation insurance. It's meant to be a lower cost alternative to the private market. This bill now heads to Gov. Rauner for consideration.
The Senate passed a revenue bill that includes an income tax hike. The bill calls to increase the corporate income tax to 7% from 5.25% and the personal income tax to 4.95% from 3.75%. This bill is with the House for final consideration before the May 31st adjournment. Deadline - here.
Trump Budget Impacts Workers' Compensation
WORK COMP OFFSETS
The President's FY 2018 Budget was released last week and contains a number of provisions to offset spending, including a provision that would eliminate the Workers' Compensation Reverse Offsets for Social Security in 15 states that were preserved in federal legislation in 1981. These states have plans that reduce workers' compensation benefits when the disable worker is also receiving Social Security disability insurance benefits. This is known as reverse offset.
WHAT'S THE IMPACT?
The elimination of the reverse offset effectively shifts costs to employers and workers' compensation plans in the states that have maintained the offsets. The budget estimates savings from this at $164 million over the ten years ending 2027. If this were enacted employers with employees covered in these states would see increases in the net amount to be paid in workers' compensation because workers' compensation payments would increase as the net amount to be paid by Social Security would decrease. States that would be impacted include California, New York, Florida and Ohio.
Making Our Way Around The Country
The California Senate will vote on a bill that would create a single payer health care system in California. The single payer system would create a publicly funded universal health care system and would cost $400 billion. The California Commission on Health and Safety and Workers' Compensation (CHSWC) has repeatedly recommended further investigation of the integration of workers' compensation medical care with group health care. The bill needs Senate approval by June 2 to advance to the Assembly.
The Louisiana House passed H.B. 592, which would mandate the adoption of a workers' compensation drug formulary. The closed prescription formulary would be tied to the most recent version of the Official Disability Guidelines and be effective January 1, 2018. It's been reported that Gov. John Bel Edwards will veto this bill if passed by the Senate. Two other bills to combat opioid abuse are on the table still. The first bill, H.B. 192, would limit prescriptions to seven days for acute conditions. The other bill, S.B. 55, would require a new controlled dangerous substance license from the Board of Pharmacy, which would require the prescriber to review the patient's record in the Prescription Monitoring Program (PMP) before filling a prescription and re-reviewing that record every 90 days. The Louisiana legislature adjourns June 8.
BE SAFE THIS SUMMER
The National Safety Council will be lighting up the Chicago skyline in green in observance of June as National Safety Month. While most students are getting or almost out of school now, Memorial Day marks the beginning of what's known as the 100 deadliest days of the year for teens. Let's concentrate, put our phones down, and be safe out there.
About The Way
The Way is Gallagher Bassett's weekly governmental briefing on state and federal affairs that affect our industry. We thank you for starting your Wednesday morning with us. Please be sure to follow #GBTheWay for additional news and updates as we make our way throughout the country on the issues affecting our industry. For more information, please connect with GB on LinkedIn, follow us on Twitter, or contact the authors, Greg McKenna or Cari Miller, directly.