June 30, 2015
Debunking ‘Opt-Out’ Myths (Part 2)
by Bill Minick
Benefit plan coverages and employer liability exposures are much more favorable for injured workers than "opt-out" opponents suggest.
This is the second of eight parts. The first article in the series is here.
“Opt-out” advocates have taken time to understand how workers’ compensation systems work, so it is fair to expect option opponents to take time to understand how options work. Sometimes, option myths are simply because of misunderstandings. Sometimes, they are outright lies in a desperate attempt to maintain the status quo for workers’ compensation programs that are championed only by a subset of interested insurance carriers, regulators and trial lawyers.
Despite what some myths say, most (if not all) option programs:
- Cover all common law employees
- Require immediate injury reporting, subject to a “good cause” exception (leading to faster medical care, more appropriate medical treatment, safer workplaces for co-workers and other advantages for workers and employers. For a further discussion of reporting requirements, go to http://journalrecord.com/2015/05/20/minick-oklahoma-option-works-for-companies-workers/)
- Pay all reasonable and necessary medical expenses
- Include no employee premium payments, deductibles or co-pays
- Pay for emergency care, surgeries (without regard to outcome) and skilled nursing care
- Cover mental injuries, like being a victim or witness to a criminal act and post-traumatic stress disorder
- Cover cumulative trauma claims supported by medical evidence
- Cover aggravations of pre-existing conditions to the extent caused by the course and scope of employment
- Cover catastrophic injuries (including impairments and death)
- Gain access to more of the best medical providers
- Allow employees to object to a treating provider’s findings, request a change in physician or seek a second medical opinion
- Use independent medical examinations
Opponents also do their best to avoid the fact that opt-out programs:
- Pay higher wage replacement benefits than workers’ compensation (even after applicable taxes, if any – a subject addressed later in this series of articles)
- Deny fewer claims, result in fewer disputes and deliver more predictable outcomes than workers’ compensation
- Rely on the same claim procedures used for more than 40 years in group health plans. Option programs allow appeals of denied claims, including employee discovery, submission of information and access to state and federal courts and are not subject to run-away jury verdicts
- Include employer liability exposure for any wrongful denial of benefits, discrimination, wrongful termination or retaliatory discharge or failure to provide information
- Are subject to the Americans with Disabilities Act, the Family and Medical Leave Act, the Occupational Health and Safety Act and other applicable state and federal laws (including civil and criminal penalties for any employer compliance failures)
- Do not require employees to have a lawyer to understand basic rights and responsibilities
- Are implemented primarily by small employers supported by independent insurance agents
Interested in learning more? Consider this public policy paper or FAQ on the Oklahoma Option. In-depth information is also available from many insurance carriers and third-party administrators with whom you likely already do business. Let me know if you need contacts, legal citations, actuarially credible data or other detail on any point above.