Constitutional Challenge to Oklahoma Option
Saying two employers’ benefit plans “do not meet the minimum standards of the statute,” attorneys have filed suit against Oklahoma’s workers’ comp law. The filing in the state Supreme Court specifically names the State of Oklahoma and Insurance Commissioner John D. Doak.
Oklahoma became only the second state after Texas that gives employers the option. Unlike the Texas law, Oklahoma’s statute requires employers to set up their own workers’ comp-type plans that meet the standards set by the state-based program.
“Petitioners allege the entire Oklahoma Employee Injury Benefit Act … is unconstitutional,” the filing states. “Further, that the Injury Benefit Plans approved by respondent that directly affect the injury claims of the two petitioners fall woefully short of reasonable standards of protecting Oklahoma’s injured workers.”
The suit was filed on behalf of injured workers for separate companies. Judy Pilkington was injured in September 2014 while an employee of Dillard’s Inc. Kim Lee, sustained injuries while employed by Swift Transportation Co. of Arizona. Both were denied benefits.
“There is no due process protection in allowing an Oklahoma employer to opt out of the statutory workers’ compensation system, set up its own benefit plan, make all the decisions regarding benefits, determine who and how a plan can be reviewed, and have total control of the development of the record for appeal,” according to the suit. “Nowhere along the way is there an agency or court or unbiased tribunal to look at the merits of an injured worker’s case. Opt out employers are allowed to replace a judge with a committee chosen by the employer. That flies in the face of the federal and state constitutions.”
The filing also says the statute treats claimants in opt-out companies differently from those that have not opted out. “In a claim before the Workers’ Compensation Commission, an injured worker, if aggrieved by the decision of an administrative law judge, is allowed … to appeal to the three-member Workers’ Compensation Commission. Then, if a party is aggrieved, Subsection C of § 78 provides a comprehensive standard of review in the Supreme Court,” according to the filing. “For opt out injured workers, the Supreme Court can reach a different conclusion only if the decision of the employer and the Commission is ‘contrary to law.’”
“When the facts come out regarding those injured workers’ claims and how they were treated, people will scratch their heads and wonder why this new lawsuit was ever filed.” — Bill Minnick, president, Partnersource
Finally, the suit objects to the time frame for workers to report injuries. “An injured worker for an employer who has not opted out of the statutory system has generally at least one year to file a claim before the Workers’ Compensation Commission,” it states. “However, in a Draconian blow to the rights of injured workers, in the Swift plan, there is a 24-hour statute of limitation, and even less time to report an injury under the Dillard’s plan.” The suit says that someone working for Dillard’s would not be entitled to benefits if she did not report the injury by the end of the work shift on the date of injury.
Proponents of the law called the action “the latest in a large group of lawsuits.” Bill Minnick, president of Partnersource, said in a statement the attorneys filing the suits “are trying to use the courts to dismantle legislation that has made Oklahoma more competitive and Oklahoma workers more informed about their benefits.”
Minnick argued that both opt out and the traditional workers’ comp system require payment “of the same types and amounts of benefits.” He said the option supports:
- More employee accountability and medical control such as faster notice of injury and direction of care.
- Increased employee and employer engagement, as they “actively communicate on program rights and responsibilities.”
- Free-market insurance competition since insurers can compete against one another to “determine who can offer the lowest price for the broadest benefits coverage.”
Minnick says benefit payments from opt-out employers are often higher than in the traditional system.
“When the facts come out regarding those injured workers’ claims and how they were treated, people will scratch their heads and wonder why this new lawsuit was ever filed,” Minnick wrote. “It contains many misstatements of the law and the facts. But that’s okay. Oklahoma Option programs are working well and everyone deserves their day in court.”
Organizers Comb Through Proposals, Build Program
The 24th annual National Workers’ Compensation and Disability Conference® & Expo takes place Nov. 11-13 at the Mandalay Bay Resort and Casino in Las Vegas. The conference is produced by LRP Publications, which also publishes Risk & Insurance® magazine.
Occupational as well as nonoccupational injuries and disabilities will be the focus of some sessions at this year’s conference. During the annual program planning meeting, the conference’s top advisors decided to increase the discussions of disability, while still providing plenty of workers’ comp-related sessions.
“We will be strengthening the disability track to broaden the definition of ‘disability’ beyond workers’ comp, to other claims,” said Roberto Ceniceros, conference chair and senior editor at Risk & Insurance® Magazine. “We want to expand the audience that can benefit” from the conference.
Disability Management remains one of five tracks housing the sessions (see box). While it will receive increased attention, Ceniceros said that won’t detract from the emphasis on workers’ comp.
“Our new program cochair Bill Wainscott [manager of workers’ compensation and occupational health at International Paper] is super strong in workers’ comp,” he said. “So we’re strengthening our traditional focus on worker’s comp.”
The increased focus on disability resulted from evaluations submitted by previous conference attendees. “The input we receive from attendees is invaluable in helping us build the next year’s conference program,” Ceniceros explained. “It gives us direction and guides us through the whole process.”
Building the Program
Members of the conference advisory board are currently combing through the hundreds of speaking proposals submitted. Program cochairs Wainscott and Denise Gillen-Algire, director of managed care and disability corporate risk for Safeway Inc., have begun the arduous task of carefully reading and analyzing the proposals to whittle them down to those that will be included.
“We received many great proposals on a wide variety of topics — current trends and issues of concern to workers’ comp and disability practitioners,” Ceniceros said. “We especially look for those that emphasize education; information that attendees can take back to their workplaces and put into action.”
This year, conference organizers are getting help from Dan Reynolds, editor-in-chief of Risk & Insurance. “Dan is part of the team helping to select the proposals along with Bill and Denise,” Ceniceros said. “I’ll weigh in with my thoughts after the others. That’s the process.”
Once the list has been narrowed down by the chairs and Reynolds, the additional members of the advisory board will offer their opinions. This year’s advisors include:
Kathryn Caverly, senior director of product planning at LexisNexis; Dr. Marianne Cloeren, medical director of Managed Care Advisors Inc. and chair of the American College of Occupational and Environmental Medicine’s Council on Occupational and Environmental Medicine Practice and a member of the ACOEM board of directors; Jill Dulich, senior director at Marriott Claims Services; Kenneth Eichler, director of regulatory and outcome initiatives at Work Loss Data Institute; Max Koonce, senior director of risk management at Walmart; John T. Leonard, president and CEO of MEMIC; Maureen McCarthy, senior vice president and manager of workers’ compensation claims and managed care at Liberty Mutual; Joseph Paduda, principal of Health Strategy Associates, and author and blogger for ManagedCareMatters; Rebecca Shafer, president of Amaxx Risk Solutions Inc.; Mark Sidney, vice president of claims for Midwest Employers Casualty Company (a W.R. Berkley Company); Patrick J. Walsh, vice president and chief claims officer of corporate claims at Accident Fund Holdings Inc.; Mark Walls, vice president of Communications and Strategic Analysis at Safety National and founder of the Work Comp Analysis Group on LinkedIn.
“The advisory board members are all very accomplished workers’ comp and disability professionals,” Ceniceros said. “They represent all different facets of the industry such as employers, insurers, vendors, and others.”
Once again, conference leaders are honing in on the needs of employers in building the program. Attendees will see many new speakers and cutting-edge issues, mixed in with several returning sessions.
“The ‘60 Tips in 60 Minutes’ session continues to be very popular,” Ceniceros said. “While we have not yet identified the panelists for it, we know they will represent a mix of professions and personalities. People tell us they really enjoy the fast pace, entertainment of the session — and, of course, the great information provided.”
Risk Scenarios Live! will return for a third year. The multimedia-driven session offers an interactive discussion of a typical workers’ comp claim as it develops, giving attendees the chance to weigh in with their thoughts and recommendations at certain points and hear from an expert panel.
Also returning will be the bloggers. The top social media posters in workers’ comp and disability will be back to opine on the top issues of the day based largely on input from readers throughout the year.
Visit the conference website for more information.
A Modern Claims Philosophy: Proactive and Integrated
According to some experts, “The best claim is the one that never happens.”
But is that even remotely realistic?
Experienced risk professionals know that in the real world, claims and losses are inevitable. After all, it’s called Risk Management, not Risk Avoidance.
And while no one likes losses, there are rich lessons to be gleaned from the claims management process. Through careful tracking and analysis of losses, risk professionals spot gaps in their risk control programs and identify new or emerging risks.
Aspen Insurance embraces this philosophy by viewing the data and expertise of their claims operation as a valuable asset. Unlike more traditional carriers, Aspen Insurance integrates their claims professionals into all of their client work – from the initial risk assessment and underwriting process through ongoing risk management consulting and loss control.
This proactive and integrated approach results in meaningful reductions to the frequency and severity of client losses. But when the inevitable does happen, Aspen Insurance claims professionals utilize their established understanding of client risks and operations to produce some truly amazing solutions.
“I worked at several of the most well known and respected insurance companies in my many years as a claims executive. But few of them utilize an approach that is as innovative as Aspen Insurance,” said Stephen Perrella, senior vice president, casualty claims, at Aspen Insurance.
“We do a lot of trending and data analysis to provide as much information as possible to our clients. Our analytics can help clients improve upon their own risk management procedures.”
— Stephen Perrella, Senior Vice President, Casualty Claims, Aspen Insurance
Utilizing claims expertise to improve underwriting
Acting as adviser and advocate, Aspen integrates the entire process under a coverage coordinator who ensures that the underwriters, claims and insureds agree on consistent, clear definitions and protocols. With claims professionals involved in the initial account review and the development of form language, Aspen’s underwriters have a full sense of risks so they can provide more specific and meaningful coverage, and identify risks and exclusions that the underwriter might not consider during a routine underwriting process.
“Most insurers don’t ever want to talk about claims and underwriting in the same sentence,” said Perrella. “That archaic view can potentially hurt the insurance company as well as their business partners.”
Aspen Insurance considered a company working on a large bridge refurbishment project on the West Coast as a potential insured, posing the array of generally anticipated construction-related risks. During underwriting, its claims managers discovered there was a large oil storage facility underneath the bridge. If a worker didn’t properly tether his or her tools, or a piece of steel fell onto a tank and fractured it, the consequences would be severe. Shutting down a widely used waterway channel for an oil cleanup would be devastating. The business interruption claims alone would be astronomical.
“We narrowed the opportunity for possible claims that the underwriter was unaware existed at the outset,” said Perrella.
Risk management improved
Claims professionals help Aspen Insurance’s clients with their risk management programs. When data analysis reveals high numbers of claims in a particular area, Aspen readily shares that information with the client. The Aspen team then works with the client to determine if there are better ways to handle certain processes.
“We do a lot of trending and data analysis to provide as much information as possible to our clients,” said Perrella. “Our analytics can help clients improve upon their own risk management procedures.”
For a large restaurant-and-entertainment group with locations in New York and Las Vegas, Aspen’s consultative approach has been critical. After meeting with risk managers and using analytics to study trends in the client’s portfolio, Aspen learned that the sheer size and volume of customers at each location led to disparate profiles of patron injuries.
Specifically, the organization had a high number of glass-related incidents across its multiple venues. So Aspen’s claims and underwriting professionals helped the organization implement new reporting protocols and risk-prevention strategies that led to a significant drop in glass-related claims over the following two years. Where one location would experience a disproportionate level of security assault or slip & fall claims, the possible genesis for those claims was discussed with the insured and corrective steps explored in response. Aspen’s proactive management of the account and working relationship with its principals led the organization to make changes that not only lowered the company’s exposures, but also kept patrons safer.
World-class claims management
Despite expert planning and careful prevention, losses and claims are inevitable. With Aspen’s claims department involved from the earliest stages of risk assessment, the department has developed world-class claims-processing capability.
“When a claim does arrive, everyone knows exactly how to operate,” said Perrella. “By understanding the perspectives of both the underwriters and the actuaries, our claims folks have grown to be better business people.
“We have dramatically reduced the potential for any problematic communication breakdown between our claims team, broker and the client,” said Perrella.
A fire ripped through an office building rendering it unusable by its seven tenants. An investigation revealed that an employee of the client intentionally set the fire. The client had not purchased business interruption insurance, and instead only had coverage for the physical damage to the building.
The Aspen claims team researched a way to assist the client in filing a third-party claim through secondary insurance that covered the business interruption portion of the loss. The attention, knowledge and creativity of the claims team saved the client from possible insurmountable losses.
Modernize your carrier relationship
Aspen Insurance’s claims philosophy is a great example of how this carrier’s innovative perspective is redefining the underwriter-client relationship. Learn more about how Aspen Insurance can benefit your risk management program at http://www.aspen.co/insurance/.
Stephen Perrella, Senior Vice President, Casualty, can be reached at Stephen.email@example.com.
This article is provided for news and information purposes only and does not necessarily represent Aspen’s views and does constitute legal advice. This article reflects the opinion of the author at the time it was written taking into account market, regulatory and other conditions at the time of writing which may change over time. Aspen does not undertake a duty to update the article.
This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Aspen Insurance. The editorial staff of Risk & Insurance had no role in its preparation.