Last week, Illinois Governor Bruce Rauner gave his annual budget address to the state. In the lengthy speech, Governor Rauner spent most of the time addressing the need for job creation in the state and the reasons for businesses leaving. Spending only one sentence of his entire address on workers’ compensation, Rauner stated that high workers’ comp insurance costs are causing higher property taxes and businesses to leave Illinois. What Rauner didn’t say should speak louder than the few words he actually expressed. There’s one type of business that’s flocking to do business in Illinois. Our state has the most workers’ comp insurers of any state in the country. 332 insurers, to be exact.
Illinois a Favorable Environment for Insurers
In Illinois, profits for workers’ comp insurers have been on the rise since 2010. Since 2011, however, the dollar amount they’ve paid out for claims has decreased while their premiums have steadily gone up. So where is all the extra money going? It’s probably not a shock to hear that insurers are pocketing the extra income instead of passing on the savings to businesses in the form of lower premiums. Insurers are also empowered by state legislation that allows them to deny claims and cut back on available benefits. However, businesses see workers’ comp as a necessary evil. By providing workers’ comp insurance, they are essentially free of responsibility for injuries sustained on the job. Governor Rauner hopes that by cutting back on workers’ comp premiums and payouts, companies will see Illinois as a favorable place to do business and will set up shop in the state.