In 2013, legislation in Oklahoma was signed into law allowing employers to implement an alternative to the state’s traditional Workers’ Compensation system. The 2013 legislation gave Oklahoma employers the ability to “opt out” of the state Workers’ Compensation system and write their own plans, setting the terms for what injuries were covered, which doctors workers could see, how workers were compensated and how disputes were handled. The signing made Oklahoma only the second state after Texas to allow employers to leave the traditional state Workers’ Comp insurance system. Now the Oklahoma Supreme Court in a case before it struck down the “opt out” provision of the state’s Workers’ Compensation law, ruling it is an unconstitutional special law that gives employers the authority to single out injured workers for inequitable treatment.
The case before the Oklahoma Supreme Court involved an employee at Dillard’s department store who allegedly injured her neck and shoulder while lifting shoe boxes in 2014. Dillard’s, which had opted out of Workers’ Comp and created its own benefit plan, initially paid for her medical care. But Dillard’s later denied her claims, insisting that any further damage and surgeries she might need were due to a pre-existing degenerative condition and not her injury at work. In a 7-2 ruling, the justices found that such opt-out plans were unconstitutional because they treated one group of injured workers differently from all other injured workers in the state. In a concurring opinion, two of the justices noted that while most Oklahoma workers have 30 days to report an injury and can request a hearing before a judge, Dillard’s employees had to report injuries by the end of the workday and could only appeal in writing to a committee made up of people picked by the company.
The ruling also states that it applies in the case before it as well as all other cases on appeal and pending before the Workers’ Compensation Commission. Only 65 employers have elected to leave Oklahoma’s Workers’ Compensation system and create their own plans.
The two justices who dissented said they would not invalidate the “opt out” provisions but would require the Workers’ Compensation Commission to determine whether an employee covered by an employer’s Workers’ Compensation plan was denied benefits the employee would have received under the state’s plan and require the employer plan to meet the requirements of the Opt Out Act.
In a statement, Oklahoma Attorney General Scott Pruitt said the Supreme Court’s ruling was “out of touch” and an attempt to reverse legislative actions that he said had lowered the cost of Workers’ Compensation insurance in the state.
Other states have introduced bills and draft proposals similar to Oklahoma’s Opt Out Act, including Tennessee, South Carolina, Georgia, Mississippi, West Virginia, Wisconsin and Illinois.
Caitlin Morgan provides a wide range of Workers’ Compensation insurance solutions throughout the country – from guaranteed cost programs to self-insurance plans. We can assist in you in securing a plan that meets the needs of your clients. Give us a call at 877.226.1027.