Okla. Workers' Comp Option Rejected

Wednesday, May 2, 2012 | 0

The Oklahoma House of Representatives has voted 50-42 against allowing employers the option of establishing their own injury benefit plans outside of the Oklahoma workers’ compensation system. This decision will not be reconsidered, so the initiative is finished for the 2012 legislative Session.
 
Substantial momentum for passage had grown in recent months, with House Bill 2155 passing on many prior Senate and House votes.  This bill built upon the widely-acclaimed success of its southern neighbor with the Texas “nonsubscriber” model. Eyes of the entire workers’ compensation industry (nationally) have been closely watching these developments in Oklahoma.
 
David DePaolo, editor-in-chief at WorkCompCentral (the nation’s leading workers’ compensation news service) recently commented on, “the sudden and explosive interest by business to take to other states the nonsubscription model.” He also acknowledged this “could spell the demise of workers’ compensation as we know it and that, in my opinion, may be a good thing as the [reason for existence] of work-injury protection systems would return to its original mission: protecting employees and employers.”
 
Today, every state in the U.S. has its own workers’ compensation system. These systems are mostly identical in the forms of medical and indemnity benefits paid to injured workers.  However, each state system has its own locally developed labyrinth of “employee protections” that have been patched together and continue to independently morph from an Industrial Age model transported from Europe to U.S. shores in the early 1900s.
 
Oklahoma House Bill 2155 represented ground-breaking change that would have melded a fairly common workers’ compensation benefit design with the same employee protections of federal law that have functioned admirably (and with little complaint) since 1974 in employer-sponsored health and disability plans. And this next generation of work injury protection system would have retained substantial control at the state level through insurance laws and regulations that are not preempted by federal law.
 
But ground-breaking change does not come easy.
 
At the end of the day, Oklahoma House Bill 2155 was defeated for many reasons: some political, some philosophical, some strategic … but most ALL about money. Our primary opponents were a few workers’ compensation insurance carriers and a large group of trial attorneys, all of whom wrongly consider themselves “stakeholders” in the Oklahoma workers’ compensation system. They focused substantial resources on blatantly misrepresenting the adequacy and administrative process for option benefits. They also worked hard to generate fear among small business owners, medical providers, and insurance agents, without pursuing either research or dialogue that would have led to greater understanding and advancement of a further-improved system. What this odd carrier/attorney alliance most feared was losing tens of millions of dollars annually in their own profits from a one of the most highly contentious, expensive and economically-debilitating workers’ compensation systems in the United States.
 
In spite of such opposition, THIS OKLAHOMA INITIATIVE DID SUCCEED in breaking new ground and would not have been possible without the tireless, committed leadership of the Oklahoma Injury Benefit Coalition (http://www.okibc.org) and key members of the Oklahoma Legislature. Our hats are off to Hobby Lobby, Unit Drilling, Sysco Food Service, Bravarro Communications, Oklahoma State Chamber, McAfee & Taft, Steve Edwards, and the many other employers and advocates who dared to chart a new path and challenge the status quo. And our thanks to Oklahoma Senators Bingman, Williamson, and Sykes, and Oklahoma Representatives Steele, Jordan and McCullough.
 
I am a proponent of state’s rights, smaller state and federal government, and free-markets.  And as shown in Oklahoma House Bill 2155, there are ways to:
introduce more insurance market competition,
leverage existing federal employee benefit protections (without growing federal bureaucracy), and
shrink state government, while retaining a substantial measure of state legislative, regulatory, and judicial control.
 
History will ultimately prove that 50 entirely separate and distinct state workers’ compensation systems unnecessarily waste billions of dollars annually that could be better focused on improving injured worker medical outcomes and the economic development of this country. For now, the Oklahoma Legislature has passed on this opportunity to lead the way for the rest of our nation. But this movement toward a better path for the workers’ compensation industry has only begun. Leaders who embrace the above values are now emerging in many states and will be proven to be on the right side of history.
 
The Oklahoma Legislature meets annually and will begin its next session in January 2013.
 
Bill Minick is president of PartnerSource in Dallas, Texas, which provides feasibility analysis, design, implementation, administration, and insurance support to employers that do not participate in traditional workers’ compensation systems.