Attempts to allow employers in Tennessee to form their own workers’ compensation plans have been deferred until next year.
The state’s House Consumer and Human Resources Subcommittee voted in late March to defer the bill, which would give certain companies the right to “opt out” of the state-run workers’ comp system, until the 2016 legislative session.
A similar effort has been moving forward in the Senate, but analysts note that without support in the House, passage of the bill this year is unlikely.
The apparent defeat of the bill may be seen as a victory by the workers’ compensation community. The state’s Advisory Council on Workers’ Compensation unanimously rejected the proposal, saying employers will likely choose the most cost-effective option at the expense of employees.
Under the proposed legislation, employer’s medical liability for workplace accidents has been capped at $500,000—a sum many worry is not enough, despite having been increased from the original proposal of $300,000.
"They are going to opt on the side of cost savings. That's human nature. I've been on that side; I understand what it means to run a business," Mary Elizabeth Maddox, an attorney with law firm Frantz McConnell & Seymour, told The Tennessean.
Supporters, in the meantime, have been trying to convince senators that a free market option would create competition for state government and will thus produce superior policies for employers and employees alike.
The bill enjoys the support of the lobbyist group the Association for Responsible Alternatives to Workers’ Compensation (ARAWC), which has drawn attention for its funding by corporations like Walmart, Nordstrom, Safeway and Lowe’s.
