Tag Archives: robert wilson

Time to Revisit the ‘Grand Bargain’

I honestly did not know what to expect, yet I was somewhat shocked by the results. And it is making me rethink much about our current educational strategies.

I’ve had the tremendous fortune over the last few years to present at numerous conferences and seminars about various areas of workers’ compensation. Many of those presentations mentioned the “grand bargain,” yet, it wasn’t until last week that the thought ever came to me. We spend a great deal of time talking about the tenets of the grand bargain, or the “great compromise”; but how many workers’ compensation professionals even know what it is?

I spoke at the Texas DWC Educational Conference in Dallas recently. My scheduled topic was titled “Opting Out of Opting In – The Cost of Non-Subscription.” I did not simply wish to focus on the accounting aspects of employer liability within the Texas non-subscriber world. I wanted to talk about the real cost to the employer, worker and society of not protecting our most valuable assets – our human workforce. Part of this presentation mentioned the basic doctrines of workers’ compensation, both the grand bargain and exclusive remedy. Shortly before the presentation began, however, I had a thought. I wondered, how many people, embedded in the day-to-day minutiae of workers’ comp, even know what the grand bargain is? I decided to ask, for the first time ever, that question of this audience.

See also: Taking a New Look at the ‘Grand Bargain’  

My session was the last one of the conference, the mightily feared “closing session.” A number of attendees had already departed, so I would estimate that there were only about 100 people in the room. As I began my presentation, I told them that I would like to ask what was likely a stupid question. I said, “By a show of hands, how many of you have ever heard of the grand bargain?”

Probably just a dozen or so hands went up. I claimed at the time that I was not too surprised by that, but I was truly taken aback. The grand bargain, the covenant that created basic protections for injured workers in exchange for limited liability protections for their employer, is the underlying foundation that created and has guided our industry for more than 100 years; yet 90% of the workers’ compensation professionals in the room had never heard of it.

How could we let that happen?

It is often said that, to understand where you are going, you must have a clear vision of where you have been. People working in workers’ compensation today may have a clear understanding of process, but they may be fuzzy on why we exist in the first place. I’ve often said that one of the problems of the workers’ comp industry is that it has been essentially commoditized over the last 100 years. It is not clearly understood by the people it serves, and those who experienced the confusion and tumult that brought the industry to life have long since departed this earth. Today, workers’ comp is viewed by many employers as a pain-in-the-butt mandatory expense that they would be better off without. They do not appreciate the benefits and protections that workers’ comp can provide them. They don’t know about the grand bargain.

And, apparently, many in our industry are not prepared to educate them. That must change.

This shouldn’t be difficult. The grand bargain can literally be explained in minutes. It should be required curriculum at all conferences and within workers’ compensation training programs. People must understand the “why” in addition to the “what” and the “how.” In fact, the “why” is probably the most important part, as it can motivate and guide the way our processes and procedures are performed.

See also: ‘Opt Out’ Will Return; Pay Attention  

This was not the fault of the people in that room in Texas. It is the failure of an industry to embrace and understand its heritage. It is the result of a relentless focus on process versus one of purpose and recovery.

We need to teach our professionals about the grand bargain. It is part of understanding our history; and, as we all know, a failure to understand history means we may be doomed to repeat it.

Confusion Coming for Workers’ Comp

Today, dog lovers all over this great nation walk their dogs through neighborhood streets, and after the dogs “do their business” or “deposit a love biscuit,” the dutiful owner takes a moment to pick up the waste and carry it home. The telltale swinging plastic bag of poop is a sign the responsible dog caregiver is keeping their neighborhood clean.

After all, only in America can placing a naturally degradable substance inside a plastic bag where it will last 10,000 years in a landfill be considered ecologically responsible.

But all of that difficult work is about to end, thanks to a ridiculous bit of technology —  and signals the sort of confusing adjustment that workers’ comp will have to make as the definition of work and work sites changes.

Imagine, not so far in the future, the dog owner does not pick up his pooch’s steaming pile of love. Rather, they grab their cell phone (which they were probably holding because they’ve been on Facebook for most of the walk), snap a picture of the pile, tag its location with an app and simply walk away. Somewhere, an “Uber style driver” is notified that fresh feces is afoot. They race to the geographically tagged location and, quick as a flash, scoop up Fido’s poop. They will have the onerous and odoriferous task of keeping your neighborhood safe from unwanted piles of poop. One and done — and you are good to go. I suppose the picture is useful for identification purposes. You wouldn’t want to scoop the wrong poop, after all.

You read that right. There will soon be an app that will allow you to summon someone else to clean up after your dog.

See also: Five Workers’ Compensation Myths

Beyond being the ultimate sign of a lazy and slothful society teetering on the brink of self-destruction, this idea actually just stinks. Imagine, if you will, the physical machinations of the concept. You are standing in your neighbor’s yard, taking a picture of dog shit. As your neighbor stands in their living room window, drinking their morning coffee, what could they possibly be thinking? You might just be arranging for a pick up, but, in their mind, you’ve now been labeled an irresponsible pervert who commemorated the officious occasion of your dog dumping in their yard.

Maybe Fido should get a ribbon for his effort.

While the developers of the “Pooper App” claim it is an “Uber-like service,” it seems to lack an actual verification factor. How do we know the poop was actually purloined? I mean, with Uber, we know whether the guy showed up or not. With the pooper app, you may be able to see the pooper scooper drove by, but you’ll have no idea if they actually scooped the poop. Maybe they have to take a selfie with the poop as proof.

It is certainly going to be an interesting morning in your neighbor’s yard.

And who would actually want this job? I know that services already exist that clean out yards and such on a scheduled basis, but who will want to troll an area waiting for an app to notify them that there is poop afoot? The developers tell us pet owners of all types will take this job because they love animals so much that scooping their poop is a pleasure. I would conjecture that if people loved bagging poop so much, we wouldn’t need the pooper app to begin with.

No, these scoopers must be experiencing a serious call of doody. That is the only explanation.

From a workers’ compensation perspective, I suppose these Uber scoopers will have the same challenges now being faced by other participants in the sharing economy. Who will cover them? What if they are hurt on the job; say shot for trespassing on your neighbor’s lawn? And if they are covered under workers’ comp, what class code would we possibly assign them?

See also: How Should Workers’ Compensation Evolve?  

Technology continues to challenge our industry. At least we can be comforted by the fact that it is challenging our common sense, as well.

This article first appeared on WorkersCompensation.com.

What Schrodinger Says on Opt-Out

I’ve said before regarding Opt Out—the alternative plan in Oklahoma that allows employers to escape the workers’ compensation system but maintain the benefits of exclusive remedy—that repeatedly using the word “transparency” will not make it so. Yet, when it comes to “the Oklahoma Option,” the word “transparency” is tossed around like cheap hash on a roadhouse griddle. Proponents continually use the word to describe the scheme. It is used so much that, if it were true, the entire concept would be completely invisible because it would be so incredibly, endlessly transparent.

And, of course, the Oklahoma Option is anything but.

Really smart people will know the story of Schrodinger’s cat from advanced science classes they took at some hoity-toity university or elementary school. The rest of us Neanderthals have learned about it from the weekly science lessons we get watching the hit television show “The Big Bang Theory.” For those of you who neither attended fancy schools nor are “Big Bang Theory” aficionados, Schrodinger’s cat is a thought experiment devised by Austrian physicist Erwin Schrodinger in 1935. It illustrates the problem of quantum mechanics applied to everyday objects. In the experiment, a cat, a flask of poison and a radioactive source are placed in a sealed box. If an internal monitor detects radioactivity, the flask is shattered, releasing the poison and killing the cat. The Copenhagen interpretation of quantum mechanics implies that, after a while, the cat is simultaneously thought of in two states. In other words, if the box remains unopened, the cat may be thought of as both alive and dead.

I think that experiment lends itself well to Opt Out transparency.

In the realm of Opt Out promotion, the word “transparency” is sprinkled around like holy water. It is used as if it intended to sanctify and purify the concept for the consuming public. It is employed to describe the communication that employers use to educate their workers about their rights and responsibilities. It is used in reference to the overall plans and approval process, and it is used to defend the existence of the plan. Problem is, Opt Out is not transparent in the way proponents would have you believe.

See Also: Texas Is NOT an Opt-Out State

For instance:

  • The application process to have an employer plan approved is now confidential. All documents and information submitted to the state to obtain approval to Opt Out is closed to public eyes. This is because of reforms specifically pushed by Oklahoma Opt Out proponents last year.
  • The plans themselves are not available through the state. They were initially, but they have been removed from public access since the previously referenced reforms took effect. At the recent WCRI conference in Boston, a workers’ compensation director for a very large and well-known company took up that issue, directly telling Option author Bill Minick that she was uncomfortable with Opt Out and that she wanted to know where she could actually see existing employer plans. (I wanted to rush up to this woman and hug her in front of all 400 attendees, but I did not know her personally and thought it probably would have appeared wildly inappropriate and would possibly lead to some sort of assault charges being filed). Minick assured her the plans were easily obtainable, mentioning that ProPublica published many. He also told her several courts have copies. He did not mention that courts only have those copies because they have been entered into evidence in multiple lawsuits, and I noted he did not tell her she could get them from the state. Someone on the panel suggested Minick could just send them all to her, and he agreed he could. I am not sure he agreed he would. In a recent article on InsuranceThoughtLeadership.com, Minick stated, “The idea of establishing a public database of SPDs (summary plan description) has also historically proven impractical.”

That statement, explaining why plans are not available to the public, was made in an article describing how transparent Opt Out is. I swear, I could not make this stuff up if I tried. Furthermore:

  • There is absolutely no audit function allowing the state to see how employers are managing their plans. They are under no obligation to report their activity to anyone.
  • Under many of these plans, an employee appealing a denial may not testify or submit evidence at that appeal. The people reviewing the appeal are selected by the employer.
  • Even the denial letters issued on behalf of some employers contain strict confidentiality language, instructing the injured worker not to share the information contained within the letter with “any unauthorized individuals.”

I could go on (and on and on and on), but you get the idea.

So, this is the paradox known as Schrodinger’s Opt Out. The Oklahoma Option has been placed, by legislative and regulatory fiat, in a sealed box and kept away from prying eyes. It is in that state that it may be simultaneously thought of as both transparent and not transparent. Only by opening the box and thrusting the concept under the unforgiving light of scrutiny do we learn the truth.

That, of course, is what is happening. The Oklahoma Option, recently found to be unconstitutional, has been subjected to tremendous review in a variety of formats and mediums. The claims of transparency do not hold up when exposed to that scrutiny; instead, opaqueness rules the day. The concept of transparency when related to the Oklahoma Option can only survive in a closed and impenetrable box, where the claims can be protected from prying eyes.

The cat is out of the bag, and the concept is out of Schrodinger’s box. The transparency variable cannot be easily applied in that situation. Just repeating the word many times will not change that reality.

And that, for my” Big Bang Theory” friends, is the big Bazinga.

Texas Is NOT an Opt-Out State

There were two sessions on “Opt Out” at the 32nd WCRI Annual Issues & Research Conference, but a single, critical point was generally omitted by all six speakers across both sessions; an omission that could cause confusion for those not well-versed in the vernacular of alternative workers’ compensation systems.

Texas is not an Opt Out state. It never has been. No one may “opt out” in Texas. Period.

Instead, Texas is, and always has been, an “Opt In” state. Workers’ compensation coverage is not required of employers there. They can choose to buy insurance, or not. They can choose to set up alternative plans, or not. Either way, they can “opt” for some sort of coverage or go completely bare; they don’t have to have a policy, a plan or a prayer.

Those that do not acquire coverage or self-insure under state auspices are called “non-subscribers,” on the surface, the distinction about Opt Out vs. Opt In may seem like a shallow and insignificant point. But the differences in the Texas and Oklahoma systems run deep, and the speakers should have pointed that out.

Instead, I believe some intentionally conflate the two for the benefit of their arguments.

Most notably, for employers in Texas who choose not to opt in for workers’ compensation coverage, open liability prominently remains. They can be sued for negligence. They can be found responsible for pain and suffering. They are wide open to all of the foibles and pitfalls generally absent for those who choose to participate in the grand bargain and the exclusive remedy it provides.

By comparison, employers in Oklahoma have managed to develop a system that gives them unparalleled secrecy and control while maintaining the benefits of exclusive remedy. They have liability protections that Texas employers can only dream about.

Common sense would tell us that any alternative plans in Texas are probably better than those found to their north in Oklahoma. The looming reality of open liability means that employers actually have to be responsible if they wish to avoid litigious challenges and expensive jury verdicts. Yet people continually speak of “Opt Out” as if it was one common theme in both states. Our session speakers are not the only ones to do that. Recent articles in ProPublica and NPR also failed to adequately define the difference between the two.

See Also: The Bizarre Decision on Oklahoma Option

Bill Minick, a Dallas attorney whose firm has written most of the Oklahoma Option plans, mentioned the more than “20 years of history” when talking about the “proven” success of Opt Out. He did not really mention that the 20 years he repeatedly referred to was all based in Texas. Oklahoma has only offered the Option for two years, and only 60 of the state’s 70,000 employers have gone that route. Similarly, presenter Elizabeth Bailey of Waffle House, spoke only of their experience in Texas as a non-subscriber. To her credit, she was the only speaker to deliver hard statistics about the experience in that area, but she made no mention of the Oklahoma Option except to note that they had elected not to Opt Out in Oklahoma. She did not say why.

And I really would’ve liked to know.

Really, none of the speakers made an effort to define the difference between these two systems. To the uninitiated, it would seem they are the same thing. They are not. Oklahoma-style Opt Out is what is being proposed in at least two other states, not Texas-style non-subscription. Future sessions on the subject should clarify that point, focus on actual Opt Out and call out presenters if they dilute or confuse the facts.

Additionally, only one speaker, Trey Gillespie of Property Casualty Insurers Association of America, really mentioned that the Oklahoma Option has been ruled unconstitutional in that state. From an overall panel perspective, that fact was almost a non-event, like it never even happened. But more on that later…

See Also: Five Workers’ Compensation Myths

The point is, the Texas non-subscriber system has been around for a long time. The Oklahoma Option, by Minick’s own admission, is an “experiment” (one commenter at the conference pointed out that Frankenstein’s monster was also an experiment). We should not confuse the two. Oklahoma Opt Out, along with proposed similar plans in Tennessee and South Carolina, are unique creatures that deserve to be fully judged on their own scant merits and significant flaws. We should stop providing them cover by supporting them with the alleged achievements of a dissimilar system.

After all, Texas has never been an Opt Out state, and we should stop talking about it like it is.

Who Is to Blame on Oklahoma Option?

I’ve been highly critical of the Oklahoma Option, the alternative workers’ compensation system that was recently found to be unconstitutional by that state’s Workers’ Compensation Commission. I’ve been critical of the backers of the system, as well as the employers that willingly set up plans in this closed and tightly controlled scheme. And while I’ve questioned how the Oklahoma Insurance Department, headed by Commissioner John Doak, could have approved plans so obviously deficient in comparison to those in the workers’ compensation system, I’ve never accused commissiioners of being otherwise involved. I just assumed it was stupidity, incompetence or slothfulness that allowed plans, required to provide benefits that are “equal to or better” than those provided under the workers’ comp laws of the state, to be approved for use when they were ultimately substandard.

That all changed last week, during the second opt-out session held during the 32nd WCRI Annual Issues & Research Conference. The speaker who changed my point of view was James Mills, director of workers’ compensation and captive insurance at the Oklahoma Insurance Department. Mills went on at length about how proud they were at OID to have developed a “powerful system with options” for employers in their state. I do not recall his mentioning that those options have been found to discriminate against their employees, and were therefore unconstitutional. He did not address that at all. In fact, he spoke so positively about Opt Out that he sounded to me just like the concept’s biggest promoter, Dallas attorney Bill Minick. He was just like Minick’s mini-me, or a mini-Minick, if you will. It became apparent from his presentation that the OID approvals were not borne of incompetence; no, the agency was instead directly culpable in the development and promotion of a scheme that creates discriminatory sub-classes of employees in the state.

See Also: Strategic Implications of the Oklahoma Option

Mini-Minick did not explain how plans that have draconian reporting requirements (most require an incident be reported in 24 hours or less, or all benefits may be denied) got approved when the state system allows for 30 days. He did not explain how plans that exclude a wide variety of injuries or conditions, like asbestos exposure or workplace violence, could be approved when the state system covers them. He did not explain how plans that do not even let an employee testify at an appeal of his denial could get by the OID. Frankly, there are many areas where the alternative plans come up short when compared with the state system, and mini-Minick didn’t explain any of them. He simply touted the OID’s desire to work to preserve these options for employers.

Clearly, Commissioner Doak appears to be a healthy proponent of the Oklahoma Option. This made clear to me why plans that have left everyone around the nation scratching their heads got approved in the first place. Of course, not every action may be intentional. There is obviously room for a little incompetence, as well. This is, after all the same insurance department that in 2012 issued an email announcement that an Insurance Commissioners Award for Tornado Awareness would be given to “the girl with the biggest [breasts].” (Seriously. Click here to read about it if you doubt me). Pesky details like proofreading emails or comparing benefit levels don’t appear to be a top priority in Doak’s department.

I suppose it is appropriate the agency is run by a man whose last name rhymes with the sound Homer Simpson makes when he is completely flummoxed.

I was speaking with some people at WCRI the morning following mini-Minick’s session when this topic came up. One of the people pointed out how employers always take the blame in situations like this, but that what they were doing was approved and legal. The problem was the legislative and regulatory environment that created the system to begin with. There is validity in that view, although the employers still should be held to account for the plans they adopted. “Because I could” was never an excuse that worked for me when I was in trouble as a child, and I suspect it will not be widely accepted in the public eye today (unless, maybe, you are Donald Trump, but that is another topic entirely).

See Also: The State of Workers’ Comp in 2016

For the failures of the Oklahoma Option, there is plenty of blame to go around, but a good deal of it apparently lies with the folks charged with watching the hen house. And it does not sound as though they understand their mistakes, which means they are likely destined to repeat them.