A ruling from the Oklahoma Workers’ Compensation Commission declaring the opt-out system illegal is just the latest in a line of failures for this approach to insuring workers.
Earlier this month, the commission declared the opt-out system – which allows businesses to opt out of the state workers’ comp program – unconstitutional. The order is likely to be appealed to the state Supreme Court, NewsOK noted.
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 is claiming the opt-out provision endorsed by Oklahoma violates her equal protection, access to courts and due process rights. After hearing the case, the 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 three-person panel concluded that the opt-out provision was a “special law” and that it violates the Constitution.
The decision comes just one month after the Tennessee House Consumer Affairs Committee 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.
Proponents of opt out legislation have not given up, however. The Association for Responsible Alternatives to Workers’ Compensation, the lobbying group that worked with legislators in Tennessee to draft the bill, said the group will “continue to have conversations with legislators about the benefits to employees and employers of enacting a Tennessee option,” with the goal of “complement[ing] the workers’ compensation reforms enacted in 2013.”
Even so, the group concedes 2017 is the earliest Tennessee is likely to revisit the concept.
