Oklahoma employers could see an increase in workers compensation costs after the Oklahoma Supreme Court decided last month that it is unconstitutional to suspend comp benefits for employees who return to work after experiencing an occupational injury.

The Oklahoma Insurance Department received a supplement from the National Council on Compensation Insurance Inc. on April 29 that showed the state's workers comp loss costs had increased 3.4%. The rate increase in Oklahoma was attributed to the April court ruling in the Maxwell vs. Sprint PCS case, according to an April 29 NCCI news release.

“It appears that the impact of the Supreme Court decision in Maxwell vs. Sprint PCS, in which the permanent partial disability deferral statute was declared unconstitutional, will only impact projected loss costs by 3.4% which is substantially offset by the 37.2% cumulative loss cost reductions over the past three years,” Trey Gillespie, Austin, Texas-based senior workers compensation director at the Property Casualty Insurers Association of America said in an emailed statement.

The ruling was based on a woman employed by Sprint PCS who injured her knee in 2014 while working and filed for permanent partial disability benefits after returning to work at Sprint. An administrative law judge and the Oklahoma Workers' Compensation Commission ruled that her PPD benefits should be deferred from the time that she returned to her job.

The Oklahoma Supreme Court's ruling said that, under Oklahoma's workers comp law, it was unfair to treat workers who are able to come back to their jobs differently from injured workers who are unable to do so.

The loss cost filing in Oklahoma is scheduled to go into effect July 1, NCCI said.

Overall, Mr. Gillespie said, the most recent filing by NCCI reflects positively on the reformed Oklahoma workers compensation system despite recent court decisions that have found certain provisions of the 2013 workers compensation reform legislation to be unconstitutional.

“The 2013 reforms converted the Oklahoma court-based system into an administrative system and made benefit entitlement more predictable. Like all other states, Oklahoma will continue to look at ways to make the system more efficient and fair for all employees and all employers,” Mr. Gillespie said.

Off-cycle changes rare

NCCI usually only files one or two off-cycle rate filings each year “due to the (state legislatures) enacting laws,” said Peter Burton, Philadelphia-based senior division executive of state relations for the Boca Raton, Florida-based ratings and research organization. NCCI provides workers comp ratemaking services for 38 states.

Already in 2016, Tennessee has approved a 2.7% off-cycle rate decrease since its drug formulary takes effect in August, and Alaska has approved a 3.7% off-cycle rate decrease after a medical fee schedule change, Mr. Burton added.

“This (year) is a little different because the supreme courts in both Oklahoma and Florida have” issued rulings that will increase system costs, Mr. Burton said.

Mr. Burton said NCCI actuaries are working to “evaluate the cost impact” of the Florida Supreme Court's April ruling in Marvin Castellanos v. Next Door Co. et al., which states that the attorney fee statute of the state's workers comp act hinders an injured worker's ability to obtain legal representation. An off-cycle rate increase will likely be filed in May, he added.