Tag Archives: trial lawyer

Debunking ‘Opt-Out’ Myths (Part 3)

This is the third of eight parts. The first article in the series is here. The second article in the series is here.

Workers’ compensation is a mysterious realm. Just pick a state. Even those of us who regularly read workers’ compensation statutes, regulations and official government websites have great difficulty triangulating the truth about basic rights and responsibilities for injured workers.

The little communication provided to injured workers tends to be oversimplified, leaving them no choice but to hire a lawyer to navigate the system. In fact, armies of trial lawyers, insurance and claims personnel and government employees are needed for basic functions of workers’ compensation systems. These armies then find much to argue over, which drives an endless pursuit of “reforms.” Even the industry’s biggest proponents and thought leaders complain of dysfunction. OSHA has also now joined the chorus claiming that workers’ compensation systems “add inequality to injury” and shift too much cost to injured workers and other government programs.

Against this backdrop, we’ve seen the Texas “nonsubscriber option” (often referred to as “opt-out”) grow to cover considerably more than one million workers and successfully handle more than 50,000 injury claims a year. A more highly regulated “Oklahoma option” launched in 2014 and has withstood two challenges at the Oklahoma Supreme Court.

Statistically credible data demonstrates that better outcomes for employees can be achieved through more deliberate, easy-to-understand communication that supports requirements for employee accountability. Such simple injury management principles have resulted in billions of dollars in employer savings and economic development.

Now, both Tennessee and South Carolina are considering option legislation, with several other states wondering if they should do the same.

Having worked on legislation and regulatory systems related to option programs for more than 25 years, I can understand the initial confusion and distrust by option opponents. Moving from a hyper-regulated, almost exclusively state-regulated system to a more free-market alternative that relies on a combination of state and federal laws takes people out of their comfort zone. They have legitimate questions that deserve good answers.

But too much of the discussion to date has been devoid of any spirit of inquiry. Workers’ compensation carrier associations issue fallacious descriptions of the purpose and mechanics of option programs. Allegations by plaintiff attorneys in lawsuits are quoted by workers’ comp industry media as irrefutable facts. Instead of research, option opponents attempt to promote class warfare while falsely disparaging reputable employers.

In the midst of this chaos, only one thing is sure: We are in a period of transition, and the facts will emerge, one way or the other.

In-depth information about options to workers’ compensation is more accessible every day. For those who are willing to have a reasoned public policy dialogue and information exchange, a path of progress emerges. For those who prefer uninformed hostility over homework, their true intentions will become more obvious, and their voices will be less credible as the days go by.

Debunking ‘Opt-Out’ Myths (Part 1)

Those who believe in the current workers’ compensation system share objectives with those who believe that companies should have the ability to “opt out.” We all want quality care for injured workers, better medical outcomes, fewer disputes, a fair profit for insurance companies and the lowest possible costs to employers. However, supporters of “options” to workers’ compensation object to a one-size-fits-all approach to achieving these objectives. They want to be able to either subscribe to the current workers’ comp system or provide coverage to workers through other means.

The Texas nonsubscriber option has proven beneficial for injured workers, employers and insurance carriers for more than 20 years. The Oklahoma Option has been in effect for one year and is delivering promised results for injured workers and employers, including lower workers’ compensation costs. Legislation to provide for options in Tennessee and South Carolina was introduced earlier this year.

New laws need to be studied carefully. They take time to develop, understand and implement. Injury claims also take time to properly process and evaluate. That is part of the challenge. It takes time to develop the facts of every claim and to hear everyone’s story. The true test of whether a law or new system works is the outcomes it produces over time. Option opponents should take some time to review the results being achieved now in Texas and Oklahoma, and the fact that the Tennessee and South Carolina options are built upon the exact same principles that have led to happier employees and substantial economic development.

To cover the issues related to workers’ comp options, I am writing an eight-part, weekly series. This overview is Part 1. The remaining seven will be:

Part 2: Low-Hanging Fruit – Dispelling some of the most common myths about workers’ comp options

Sometimes, these 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.

Part 3:  Homework and Uninformed Hostility

Everyone complains about the inefficiencies, poor medical outcomes, cost shifting and expense of workers’ compensation systems until a viable, proven solution is presented. Then, suddenly, everyone loves workers’ comp? It’s time to take a breath and look at some homework.

Part 4: Option Impact on Workers’ Compensation Systems and Small Business

Does an option force employers to do anything? Does an option force changes to the workers’ compensation system? Are all workers’ compensation carriers opposed to options? Should past workers’ compensation reforms just be given more time to take hold? Do options hurt the state system by depopulating it of good risks? Do options increase workers’ comp premiums for small business? Is the option just for big companies, and they all elect it?

Part 5: Litigation Uncertainties

Are Texas negligence liability claims out of control?  Should Oklahoma Option litigation delay other state legislatures? Should Oklahoma Option litigation further delay employers from electing the option? Does an option create animosity between business and labor?

Part 6: Option Program Transparency and Other “Checks and Balances”

Are immediate injury reporting requirements unfair? Are option benefits simply paid at the discretion of the employer? Are option programs “secretive” and provide no “transparency?” Are there other “checks and balances?”

Part 7: Option Program Benefit Levels and Liability Exposures

Are option benefits less than workers’ compensation benefits? Are option benefits less than workers’ compensation because of taxes?  Where do the savings come from?

Part 8: Impact on State and Federal Governments

Do option programs shift more cost to state and federal governments? Do option programs increase state and federal regulatory costs? Do option programs give up state sovereignty over workers’ compensation?