Workers' compensation

Oklahoma workers’ comp ‘option’ unconstitutional, state commission says

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Oklahoma City – The law that allows Oklahoma employers to opt out of traditional workers’ compensation is unconstitutional, the state’s Workers’ Compensation Commission said in a new ruling that deals a blow to proponents of so-called “option” legislation.

In its Feb. 26 decision, the commission ruled that the Oklahoma Employee Injury Benefit Act is a non-permissible law because it creates “unequal, special treatment of a select group of the class of injured workers.”

The ruling stems from a case in which a shoe department store employee claimed an injury from lifting various shoe boxes. She was treated for the injury, which was determined to be pre-existing and aggravated by her current job duties, and then filed a benefits claim for additional treatment.

The worker’s employer had opted out of traditional workers’ comp by developing an Employee Benefit Plan – an option proponents say saves employers money while providing the same level of care as traditional workers’ comp systems. The employer’s plan denied coverage for the additional treatment the employee sought because her injuries were pre-existing and thus not an “injury” as defined by the plan.

However, as the commission notes in its decision, the plan’s definition of injury is more restrictive than the definition used in the state’s traditional workers’ comp law. At present, employer opt-out plans approved under the Oklahoma Employee Benefit Injury Act are not required to have the same provisions as the state’s traditional workers’ comp law, including definitions of covered injuries.

“Although at first blush it appears that the Opt-Out Act requires that injured workers under an authorized benefit plan must be afforded benefits equal to or better to those under the Administrative Workers’ Act, this is decidedly not so,” the commission stated. “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.”

Because workers covered by employer plans under the opt-out law can be treated differently than workers covered by the state’s traditional workers’ comp law, the opt-out legislation violates equal protection rights under the Oklahoma constitution, according to the commission.

The commission’s ruling is “not the final word” and is likely to be appealed, claims the Association for Responsible Alternatives to Workers’ Compensation, a Washington-based membership organization pushing for option legislation among states. The group says that Oklahoma’s option has allowed for better medical outcomes for injured workers and, in general, has resulted in fewer claim disputes and greater employer cost savings.

To date, only Oklahoma and Texas have option laws on the books. Workers’ comp opt-out legislation is being pursued in South Carolina and Tennessee.

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