Oklahoma lawmakers considering opt-out proposal

"The Legislature finds that certain employers, by virtue of the number of employees employed by the employers or the nature and type of the work undertaken by their employees, are experiencing significant costs associated with occupational injuries subject to the Workers' Compensation Code." Thus begins an explanation for the development of a proposed alternative to workers' comp for Oklahoma employers.

S.B. 1378, introduced in January by Republican Sen. Brian Bingman, is making its way through the chamber. If approved as introduced, the plan would take effect in November and make Oklahoma only the second state after Texas to allow employers to opt out of the workers' comp system.

The proposal would provide a "fair and balanced alternative to the Workers' Compensation Code for providing benefits to injured employees," as well as a "more efficient and effective system, to manage the medical care and treatment of their injured workers."

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Employers that seek to qualify would need to have at least 50 employees and have either a workers' comp experience modifier greater than 1.00 for the preceding Oklahoma workers' comp insurance policy year or have total annual incurred claims of greater than $50,000 in at least one of the preceding three years.

To be eligible as a qualified employer, companies must pay a non-refundable fee of $2,500 and file a written notice, including a written benefit plan that provides for payment of medical, disability, permanent bodily impairment, death and dismemberment benefits as a result of an occupational injury. The amounts must be at least the following:

100 percent of covered medical expenses with no maximum dollar or duration limits for all medical expenses combined per occurrence.
80 percent of the employee's preinjury pay for temporary inability to work in either his own or any alternative work offered by the employer, starting from the first scheduled working day of disability for 156 weeks with a maximum weekly benefit of 80 percent of the Oklahoma average weekly wage.
80 percent of the employee's preinjury pay for permanent inability to work in either any occupation or any alternative work offered by the employer following a payment of all temporary wage replacement until the later of eligibility for 100 percent Social Security retirement or 15 years with a maximum weekly benefit of 100 percent of the Oklahoma average weekly wage.
80 percent of the employee's preinjury pay if future medical expenses will be incurred and the employee is unable to return to the preinjury or equivalent job position for five weeks for each percentage point of the whole person impairment determined under the fourth edition of the American Medical Association Guides to the Evaluation of Permanent Impairment with a minimum weekly benefit of $150 and a maximum benefit of 50 percent of the average weekly wage.
Death benefits of 10 times the employee's base annual earnings or $200,000.

Lump-sum payouts are allowed under the legislation. Qualified employers are given exclusive remedy protection.

Read more at the WorkersComp Forum homepage.

March 1, 2012

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