A ruling from the Oklahoma Supreme Court Tuesday declaring the opt-out system illegal is just the latest in a line of failures for alternative approaches to workers’ compensation.
The state’s highest court ruled 7-2 in Vasquez v. Dillards
, coming to the same conclusion as the Oklahoma Workers’ Compensation Commission when it considered the case in February. The written decision, authored by Judge Watt, found that Oklahoma’s opt-out system “creates impermissible, unequal disparate treatment of a select group of injured workers.”
The ruling effectively strikes down legislation passed in 2013 as part of a workers’ comp reform package, qualifying employers to exit the state’s comp system by establishing an employee benefit plan under the provisions of ERISA.
The case that triggered the declaration involves a worker who says she was injured lifting boxes in the shoe department of a Dillard’s store in September 2014, just a year after the opt-out system was put in place.
Dillard’s had opted out of the workers’ comp program and established an alternate system subject to federal law. The worker, Jonnie Yvonne Vasquez, said the Dillard’s alternative denied her request for an MRI, saying her medical condition was pre-existing and not the result of a work-related injury.
Vasquez claimed the opt-out provision endorsed by Oklahoma violates her equal protection, access to courts and due process rights. While the Supreme Court declined to issue decision on that score, the compensation commission agreed.
“A closer look at the statutorily authorized plan requirements reveals that the benefit plans permitted to be used to opt-out establish a dual system under which injured workers are not treated equally,” the commission said in its order.
“The appearance of equal treatment under the dual system is like a water mirage on the highway that disappears upon closer inspection.”
Furthermore, the commission argued that Dillard’s opt-out plan had a narrow definition for aggravation of a pre-existing injury that denied Vasquez her right to benefits.
The decision comes after the Tennessee House Consumer Affairs Committee in Februrary removed an opt-out bill from the legislative calendar for the year.
The bill, The Tennessee Employee Injury Benefit Alternative, borrows language from Oklahoma – which passed opt out legislation in 2013 – and Texas, which has allowed private employers to opt out of buying workers’ comp insurance for more than 100 years.
The defeat is a significant one for proponents of opt out legislation, who targeted Tennessee as a state likely to embrace the concept.
However, according to frequent workers’ compensation blogger Robert Wilson, “the sentiment toward the concept has been shifting away from opt out for several months,” particularly as positive effects from 2013 reforms “become more apparent and the concerns about the real effect of opt out received more publicity.”
Green has said he does not expect movement on the legislation until next year.
Enthusiasm for opt out legislation has waned elsewhere as well. South Carolina was due to consider a similar proposal, allowing employers to provide injury benefit plans that are less comprehensive than state-mandated workers’ comp insurance, but the bill – introduced last May – has not been revisited so far this year.
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