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Workers Compensation Benefits Decrease, Disability Insurance Increases

Written by Ankin Law Office

Over the past few decades, there has been dramatic increase in the number of Social Security disability insurance claims filed. This increase could be linked to the problems workers find when claiming workers compensation benefits. It used to be if a worker became injured at work, his employer would cover their medical bills and allow them to still receive an income through workers’ compensation insurance. However, now many find themselves turning to a workers’ compensation lawyer for help.

Today, there is no guarantee that a worker will automatically qualify for workers comp, and instead, may find it easier to apply for disability benefits. In many cases, the employee may find themselves hiring a workers’ compensation lawyer to fight for the benefits they are due.

What Has Changed?

As more Americans returned back to work after the Great Recession, employer costs for workers’ compensation increased by 18 percent from 2009 to 2013. This translates to $1.37 per $100 of covered wages earned. Meanwhile, benefits paid out to injured employees have continued to decrease with benefits paid out totaling only $0.98 per $100 of wages earned. This represents a 5 percent decrease while the workforce has actually expanded over that time period.

So what is going on? Previously, states had a tighter hold on what businesses could do when it came to workers’ compensation benefits. Over the past few years, 33 states have allowed employers to have more control over their employee’s health care decisions, which has led to cuts in workers’ comp benefits. Additional states are expected to allow employers to leave regulated worker compensation plans and develop their own compensation plans that will lack oversight. These changes are designed to reduce the cost of workers’ compensation to employers and insurers and purportedly to curtail fraud.

Loosening of Worker Comp Laws

Many employers have been allowed to develop their own workers’ compensation programs that allow them to decide what injuries are covered and what benefits their employees will receive. Another issue is the lack of oversight over the benefits that employers are providing. The result is that many workers may find that their injuries are excluded under their employer’s plan, they may not be compensated for time off because of their injury, or they may be receiving inadequate care for their injuries. Unfortunately, it is often just easier for the worker to seek disability benefits instead of fighting to receive workers’ compensation.

In a recent letter to U.S. Labor Secretary Thomas Perez, lawmakers from the Senate and House expressed their concerns over this disturbing trend. With an already burdened system, the continued increase in disability claims is expected to cause a shortfall in Social Security funds. Armed with data from the Center for Economic and Policy Research, there is concern over estimates that cuts to workers’ compensation are to blame for more than 20 percent of Social Security disability cases.

However, it is not just Social Security funds that are being depleted. The shift of benefits from workers being denied workers’ comp moving over to disability insurance has affected other government programs as well. It is estimated that the cost to other government programs is as high as $30 billion a year for workplace injuries not covered under workers’ compensation. With workers not receiving a livable wage from workers’ compensation, many have had to turn to Medicaid to cover their medical bills and food stamps to put food on their table. Often, after giving their employers years of loyal service, injured workers find themselves struggling to make ends meet.

What Does This Mean for Illinois Workers?

Just like workers across the United States, workers in Illinois may find themselves having difficulty receiving fair compensation and medical care if they are injured on the job. While Illinois is not included among the 33 states previously mentioned above, employers and insurers in the state have been allowed to make changes to their employee’s workers’ comp benefits. Some of these changes include:

  • 2005 – Employers and insurers have the right to seek a second opinion regarding their employees’ injuries
  • 2005 – Capping of payments to doctors and hospitals
  • 2011 – Injured workers may not always be able to choose their own doctor
  • 2011 – Making it harder for injured workers to qualify for workers’ comp
  • 2011 – Capping wage benefits for older workers who qualify for Social Security
  • 2011 – Limiting compensation for repetitive stress injuries, such as carpal tunnel syndrome