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Arkansas considers workers comp opt-out bill

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Arkansas state capitol

The Arkansas Senate is considering a bill that would establish an optional alternative system outside of the state’s workers compensation system to finance and administer benefits for injured workers.

Senate Bill 653, introduced earlier this month by Sen. David Sanders, R-Little Rock, would create an alternative system for health, disability and death benefits permissible under Arkansas workers comp law, according to a copy of the bill posted online. Current law gives the state general assembly the power to “enact laws prescribing the amount of compensation to be paid by employers for injuries to or death of employees,” and also gives power to the general assembly to oversee claims adjudication.

The bill is scheduled to be discussed Thursday by the state Senate Committee on Insurance and Commerce, according to the Arkansas legislature’s website. Sen. Sanders was not immediately available for comment.

Fred C. Bosse, southwest vice president for the Washington-based American Insurance Association, said the insurance trade group opposes S.B. 653.

“S.B. 653 appears to represent a last-minute approach to resurrect an alternative workers’ compensation system that cannot deliver on its promises,” Mr. Bosse said in a statement. “If enacted, S.B. 653 would create two separate and unequal classes of injured workers. While proponents of opt-out talk about savings, any cost savings would be derived from the backs of injured workers because they are only made possible by cutting benefits. AIA strongly opposes opt-out for this and other reasons, and will work to oppose this measure if it shows any signs of life ahead of final adjournment.”

Texas is the only state that allows employers to opt out of its workers comp system. A report released Tuesday by the Texas Public Policy Foundation, a pro-opt-out group, said more states could try to adopt workers comp opt out models.