Oklahoma comp legislation called 'most inventive' since early 20th century
The authors say S.B. 1062 "may be the most inventive workers' compensation legislation of any state since the early decades of the 20th century."
Written by Risk & Insurance® Magazine columnist Peter Rousmaniere and consultant Jack Roberts, managing principal of the New Street Group, Workers' Compensation Deregulation Alert: What Employers Need to Know about the New Oklahoma Law, was sponsored by Sedgwick as a follow-up to a more extensive publication last year. It describes the new law and identifies many of the differences between the Oklahoma law and the non-subscriber system in Texas, the only other state that allows employers to opt out of the traditional workers' comp system.
Both state opt-out plans offer employers the chance to substantially reduce their costs related to occupational injuries. However, as the white paper explains, the Oklahoma law has a level of state oversight that is all but nonexistent in the Texas system.
Employers who choose to opt out of the Oklahoma system must file a statement with the Oklahoma insurance commissioner, notify employees of the change, adopt a new written benefit plan, and pay an annual $1,500 fee. The insurance commissioner may disapprove the benefit plans or induce employers "into a financial backup plan" such as insurance, a letter of credit, or bonds.
Injured workers must be entitled to benefits that are "equal to or better than those offered in the statutory workers comp system," the white paper says. The Oklahoma law replaces claims management elements with significant reforms.
"Benefit plans will come in two alternative formats," the paper says. "One format is state based; the other is based on federal law, the Employee Retirement Income Security Act," although the ERISA is inferred but not expressly stated in the law. Both plans must include a description of benefits provided to injured workers and how to access them.
Unlike Texas' system which puts non-subscribing employers at risk of negligence suits, the Oklahoma system provides qualified employers with exclusive remedy protection except for intentional acts.
Oklahoma employers may see substantial cost savings through changes in claims management processes. "The employers' ability to direct medical care may become the biggest driver of savings, especially as is the case in Texas, if it gets employees back to pre-injury status quickly and results in faster return to work," the report says.
"Employers gain complete discretion in defining what injuries are covered and designing a medical management program," according to the paper. "Thus, under the law, qualified employers can require immediate reporting of injuries, control the selection of treating doctors, separate occupational from non-occupational medical conditions, decide what conditions are compensable and decide when recovering employees must come back to work."
By Nancy Grover
Read more at the WorkersComp Forum homepage.
July 15, 2013
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