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It's had ups and downs, but the U.S. workers compensation system has served employers and employees pretty well over the past 100 years. In exchange for agreeing to use the system as the exclusive remedy for dealing with workplace injuries, employees are assured that they'll be covered for lost pay and medical care, and employers have some degree of certainty in the liabilities and costs they incur when workers are injured.
There are some outliers, such as the Texas workers comp opt-out law that many employers have welcomed, and the courts are full of quirky workers comp disputes, often centering around employees caught taking part in physically challenging activities when they are supposedly injured. But generally the traditional workers comp system has, for want of a better word, worked.
Which is why it's discouraging to see the core tenet of the system, the exclusive remedy provision, under attack in several states.
As we report on page 1, especially in states that have implemented workers comp reforms, employees are suing in an attempt to win awards that exceed the benefits provided by the system.
There have been good reasons for the reforms that have been introduced over the past several years. The changes often have provided some clarity as treatment has evolved, they have helped reduce legal costs, and they have helped limit premium increases.
But the reforms need to be drafted with care. Oklahoma is a case in point — the state introduced a series of reforms in 2013, including a provision that workers comp benefits should only be paid if an accident is “unforeseeable.” The provision has, among other things, put some burden on workers to pay heed to safety guidance and common sense. But the provision also has opened up the exclusive remedy provision to attack as it leaves it up to the courts to interpret “unforeseeable,” which is reminiscent of pollution coverage disputes in the 1970s and 1980s that pivoted on the meaning of “sudden.”
While states' efforts to reform their workers comp systems should continue, lawmakers and lobbying groups have to be careful when drafting reform legislation that they are not saving dimes today and paying dollars tomorrow.