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Insurer group opposed to latest comp opt-out efforts

Posted On: Aug. 5, 2016 12:00 AM CST

Insurer group opposed to latest comp opt-out efforts

Opt-out legislation isn't the way to reform Illinois' workers compensation system, the American Insurance Association said Thursday in response to a recent report favoring comp alternatives.

In the July report, the Illinois Policy Institute, a research and education organization, suggested that workers comp opt-out could help employers in the state better control costs and serve injured workers, while also making way for system reforms.

Representing more than 350 insurers, AIA has adamantly opposed opt-out efforts in states like Oklahoma and now Illinois.

“Opt-out represents the wrong approach to reforming (Illinois') workers compensation system,” Stephen Schneider, Deerfield, Illinois-based Midwest region vice president for the association, said in a statement. “It creates a separate and unequal system of work injury benefits, an un-level playing field among employers who will be incented to opt out to minimize their work injury costs.”

But according to the Illinois Policy Institute report, “a restrictive one-size-fits-all system” isn't the most effective way to protect injured workers.

Mr. Schneider said in the statement that evaluating Illinois' medical fee schedule and working to ensure prescription drugs aren't dispensed outside of pharmacies could “reduce costs and not harm the benefits to workers injured on the job.”

Oklahoma's Employee Injury Benefit Act, which took effect in 2014, allows employers to opt out of the state's workers comp system by providing alternative benefits to injured workers. Similar bills, also based on Texas' 100-year-old nonsubscription system, have been filed in Tennessee and South Carolina.