How does the Illinois Workers’ Compensation Insurance Fund Act work?

pConstructionCrane Dollarphotoclub 63647400 300x224Injured workers in Illinois are entitled to compensation during their recovery. According to state law, every employer must carry appropriate and sufficient insurance to provide workers’ compensation benefits in the case of a work-related injury or illness. Although Illinois law imposes severe fines on uninsured employers and allocates the resulting funds to a pool for injured workers, some lawmakers have argued that the existing system of private insurance is not enough to support the increasing number of disabled employees and insufficiently insured employers. The bill known as HB 2919, the Illinois Workers’ Compensation Insurance Fund Act, is designed to strengthen the existing liability system by establishing a competitive state fund for workers’ compensation insurance.

Differences in workers’ compensation law

Workers’ compensation law varies widely from state to state. The U.S. federal government operates an independent benefit program for its own employees. Private employees in each state are subject to local regulations. Twelve states currently operate state workers’ compensation funds of different kinds, often as assigned-risk programs for dangerous professions and environments such as the following:

  • Firefighting
  • Emergency medical response
  • Logging
  • Agriculture
  • Correctional institutions

HB 2919 proposes an Illinois state fund for workers’ compensation benefits based on the precedents set by other states.

New options for insurance coverage

Advocates of HB 2919 argue that the bill will give employers and employees more options for insurance coverage. When employers need to insure workers who engage in dangerous professions, they can turn to the Illinois Department of Insurance for a fair policy at a reasonable price. Private insurers are sometimes unable to absorb risks which a more centralized program could handle without difficulty.

How would the Illinois Workers’ Compensation Insurance Fund operate?

If HB 2919 is passed, a workers’ compensation insurance fund will be established and administered by the Illinois Department of Insurance. As in other states (such as California) with a similar arrangement, the fund will consist of all premiums paid and all penalties levied for non-payment, as well as any returns on investments and deposits made by administrators. The Illinois Director of Insurance will appoint a five-member board of directors to manage the fund and ensure its ongoing efficiency.

New possibilities created by HB 2919

As the insurance market becomes more competitive and costly, some Illinois insurers and legislators are offering a new option for employers and workers who face the ongoing risk of a workplace accident. Find out more about the proposed legislation by meeting with an attorney today.