Tuesday, May 2, 2017

An Alternative to Insurance Companies in Illinois?

The Illinois House has just passed a bill that would establish a not-for-profit Workers Comp insurer to compete with the existing insurance marketplace.

If it ever were to become law, this could create an effective alternative to the Assigned Risk Plan for small employers in Illinois (with potentially huge cost savings for those employers.) It would also provide some competitive pressure on existing insurance companies who sometimes get a little carried away with the pricing on some accounts (for more details on this, read the history of this blog, or our website at www.cutcomp.com).

A lot would depend on the details, of course. And this may all be just a pipe dream at this point anyway, as I suspect our current Republican governor would be eager to veto this proposal and I suspect there wouldn't be enough votes to override such a veto.

The bill in question is HB 2622, sponsored by Representative Laura Fine from Glenview.

If done right, this could provide some genuine relief for small business in Illinois who often get victimized by extremely high rates and premiums in the Assigned Risk plan, and other employers as well who can often be at the mercy of insurers who are more interested in big accounts.

But the insurance industry and Illinois Governor Bruce Rauner will likely strangle this idea in the crib. It's a shame, because it could offer some much needed relief to Illinois employers that doesn't involve reducing benefits for workers or payments to medical providers.

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