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Donelson: Why 'Texas Option' Works

Tuesday, December 6, 2016 | 1340 | 0 | min read

In regard to the recent op-ed published by Professors Thomas McGarity and Sid Shapiro, we’re not surprised that the unique and innovative nature of Texas workers’ compensation has given way to such passionate dialogue. As the voice in our sector of the industry, the Association for Responsible Alternatives to Workers’ Compensation is proud of what we offer — better, responsible alternatives to traditional workers’ compensation.

Innovation always disrupts the market and has provided society with revolutionary improvements. Contrary to what others assume, ARAWC’s pioneering approach offers better outcomes for employers and employees.

Objectively, the "Texas option" offers better benefits, fewer disputes, better outcomes and faster return to work for employees, while giving employers a choice in how they manage their injury benefits programs. As a bonus, the option lowers related expenses. We are confident that those who are looking for the best option for workers’ compensation will focus on our track record supported by decades of data.

McGarity and Shapiro point to the Department of Labor’s assertion for national standards. While we don’t agree on increased federal bureaucratic oversight, we agree there needs to be change. We applaud the department’s effort to shine a spotlight on ways states can improve workers’ compensation. It’s time for the workers’ compensation industry to abandon its monopolistic approach and to recognize innovative solutions. And ARAWC is proud to provide responsible alternatives.

As stated, our assertions are founded on a track record of success: data and interest from a number of groups, like the Illinois Policy Institute and the Texas Public Policy Foundation, which recognize significantly improved outcomes and more competitive companies. As mentioned by TPPF, “Texas has become the nation's economic engine in large part by allowing competition to thrive in markets, even in such unlikely activities as providing benefits for injured workers.

“This type of attack on free markets is nothing new, particularly not to our state. Texas' alternative to workers' compensation is simply one of many in a long line of successful efforts to reduce government interference in markets that have been repeatedly assailed by the federal government and special interests.”

The Illinois Policy Institute report discusses the need for innovation in the workers’ compensation system, in a state where the system has barely changed in 100 years, despite the needs of the modern workforce.

“The grand bargain made between workers and employers more than a century ago is still the only bargain available to most Americans. While that bargain still holds some merit, for many workers it stands in the way of more flexible working practices that are better suited to 21st century needs. Abolishing it or creating a simple opt-out could benefit many workers in Illinois, but it is only one step toward creating a fully flexible system that is as dynamic as the workplace it must serve.”

We noted that several speakers at the Department of Labor’s briefing called for more research — a point conveniently omitted by McGarity and Shapiro. Fortunately, there is already a significant body of data developed, although we welcome more privately funded research.

We invite those who seek to change the Texas option to remember that the grand bargain was created in a different era, and in modern times we must strive to maintain the original promises with modern solutions.

AJ Donelson represents media and government affairs for the Association for Responsible Alternatives to Workers’ Compensation (ARAWC).


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