"Last year we didn't have time, given the rush of the session, to sit down with as many folks as we should have to explain the bill," said Mark Schell, senior vice president and general counsel of UNIT Drilling Company. "That won't be a mistake we make this year."
Schell is on the board of the Oklahoma Injury Benefit Coalition, a group of companies that supports allowing Oklahoma employers the option of managing their own injury benefit programs. A proposal considered by the Oklahoma Legislature ultimately failed in the most recent session. But proponents are confident more workers' comp participants will support the idea once they fully understand it.
Texas is currently the only state that allows most employers to be non-subscribers of the workers' comp system. While workers' comp participants elsewhere have expressed interest in allowing it in other states, Oklahoma is the first to take a serious look at the issue.
Following a study of the idea, a proposal made its way partially through the legislature earlier this year. Supporters set about to design a measure that offered more safeguards for injured workers than the Texas system. H.B. 2155 was initially passed in the House but later was rejected after it was amended in the Senate.
The proposal would have allowed qualifying employers to offer medical and indemnity benefits under an Employment Retirement Income Security Act plan to employees. ERISA plans are regulated by the federal government.
Employers would be able to offer an alternative occupational injury benefits plan if they have either:
- A workers' comp experience modifier as reported by NCCI of greater than 1 for the preceding Oklahoma worker's policy year.
- Total annual incurred claims as reflected in an NCCI experience modifier worksheet or their workers' comp carrier loss runs, greater than $50,000 in at least one of the three preceding Oklahoma workers' comp insurance policy years.
Those provisions were included to address concerns that allowing employers to opt out of the workers' comp system might hurt smaller companies that remained in it.
"If you are taking companies that had higher than average modifiers in their industry, those would be the types of companies that would be putting a burden on the system as opposed to just paying a premium," Schell explained. "So if we took those people out of the system, it would shed itself of higher experiencing companies and be left with lower experience companies, which should do nothing but help those who were left."
Coalition members want to make sure opponents and other interested parties understand that the Oklahoma proposal is different from the Texas system. Through the rest of the summer, members will meet with a variety of organizations to answer questions and concerns and elicit support.
"We've been talking to a number of groups. The state Chamber of Commerce was a big supporter last session," Schell said. "We didn't have an active role from the Oklahoma City or Tulsa chambers, but we have talked to them and are working with them . . . I think we will be able to get them to be more active."
The coalition will also speak with insurance groups that expressed concerns or did not understand the proposal. "We had several meetings with them and opened a dialogue and explained how we see the bill working and the opportunities it would create for them," Schell said.
"This is something that was not an off-the-shelf template," he said. "It has taken a lot of work to put it together."
As the issue evolves in Oklahoma, workers' comp stakeholders throughout the country will pay close attention. Stakeholders in Tennessee and other states have expressed an interest.
"Crafting a workers' comp opt-out system for Oklahoma and other states requires a lot of creative use of legal, medical, and insurance tools available now but were not present 100 or even 30 years ago," said Peter Rousmaniere, a longtime workers' comp consultant and researcher and columnist for Risk & Insurance®
Magazine. "Legal tools include ERISA, ADA, OSHA, and mandatory arbitration. Medical tools include know-how in medical network management and evidence-based treatment guidelines. Insurance tools include creatively designed alternative risk transfer solutions. Some of these tools have been adopted by non-subscribing employers in Texas."
As Rousmaniere explains, the opt-out proponents are creating a whole new work injury risk system that is consistent with accepted employee benefit practices in health care as well as private disability. "Their original proposal for 2012 was a major advance over the Texas non-subscriber system in making opt-out employers more accountable," he said. "As workers' comp professionals learn more about the opt-out concept, they will find it very intriguing. There is something to please and upset everyone."
Read more at the WorkersComp Forum homepage.
September 10, 2012
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