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South Carolina considers workers comp opt-out system

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South Carolina legislators have introduced a bill that would allow employers to create alternative benefit plans for injured workers rather than providing traditional workers compensation insurance coverage for employees.

South Carolina is the fourth state to weigh opt-out legislation. The Texas nonsubscription system was established more than 100 years ago, Oklahoma passed opt-out legislation in 2013, and a Tennessee opt-out bill is on hold until 2016.

The legislation, introduced Tuesday, also called the South Carolina Injury Benefit Plan Alternative, states that minimum benefit requirements must be “interpreted and applied in a manner so that the benefit plan is comparable to” the South Carolina workers compensation law.

Republican South Carolina Rep. David Hiott, who introduced the bill, said in a statement that “markets operate best and participants receive the most benefit possible when competition exists … The (bill) will also require high benefits levels, which is a win for hardworking South Carolina workers.”

According to the bill, total disability benefits must be at least 75% of a worker's average weekly wage and no less than $75 per week. Workers eligible for temporary partial disability benefits will receive at least 75% of the difference between their pre- and post-injury average weekly wages. And death benefits are to be paid when death results from an accident or within two years of accident.

Benefits for medical services and disfigurement, among other things, are also mentioned in the bill.

While a worker may be denied benefits if injury or death was as a result of his or her intoxication or willful intent, “the benefit plan shall pay benefits on a no-fault basis without regard to whether the employee, business, or third party caused the injury,” the bill states.