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Workers comp opt-out plan challenged in Oklahoma


Forty-five employers have opted out of Oklahoma's workers compensation system since the state began allowing them to do so in February 2014, but critics continue to challenge the constitutionality of the opt-out plan.

Proponents of such plans say the state's opt-out plan allows for better care for injured employees compared with the traditional workers comp system, among other benefits.

But one attorney fighting alternatives to workers comp in Oklahoma said his recent study shows that Dillard's Inc.'s alternative plan provides insufficient benefits to claimants.

The report, released Saturday, comes after the Oklahoma Supreme Court last month declined to assume jurisdiction over a lawsuit challenging the constitutionality of the state's alternative workers compensation system. Its author, Bob Burke, was one of the attorneys who petitioned the high court to hear the lawsuit.

Mr. Burke said Tuesday he created the report to showcase the differences between the benefits available to injured workers under Oklahoma's traditional workers comp system and the benefits available to injured workers under Dillard's alternative benefit plan.

Employers that opt out of the traditional comp system in Oklahoma are required by law to provide alternative benefits that are equal to or better than workers comp benefits, and companies that do so retain exclusive remedy legal protections.

However, Mr. Burke said there are 50 instances where fewer benefits are afforded to injured workers under Little Rock, Arkansas-based Dillard's plan than the traditional workers comp system.

For instance, Oklahoma's traditional workers comp system generally covers injuries arising out of and in the scope of employment, but the report states that Dillard's plan doesn't cover injuries caused by work conditions such as repetitive keyboard use and mold.

And although workers in the state comp system have one year from the date of injury to file a workers comp claim, Dillard's workers have until the end of their shift to report an injury and complete an incident report, according to the report.

Mr. Burke said such rules are unfair because good employees often don't want to complain or believe a strain will stop hurting on its own. Therefore, if a worker waited until after the weekend to report an injury, Dillard's could deny the claim, he said.

One of the biggest issues, according to opt-out critics, is that workers could have no input in the determination of benefits and no impartial arbiter under alternative benefit plans. In Dillard's particular case, a claims administrator appointed by the retailer has sole discretion to decide what constitutes an injury, Mr. Burke said in the report.

'Competitive alternative'

Bill Minick, president of Dallas-based PartnerSource, an alternative workers comp consultant unit of Arthur J. Gallagher Risk Management Services Inc., disagreed with Mr. Burke's report.

Oklahoma's nontraditional benefit plans for injured workers are “a competitive alternative to traditional workers compensation programs,” he said Wednesday.

“The (alternative benefit plan) is designed to benefit employers and employees with better, faster medical care and higher wage replacements when they do have a claim … (It's) is a proven means of saving companies money while providing the best available medical care for injured employees — plain and simple,” he said.

The Association for Responsible Alternatives to Workers' Compensation, a group of employers seeking to opt out of traditional state workers comp systems nationwide, also disagreed with Mr. Burke's report.

The association “supports state-specific options because they provide an enhanced process, improve outcomes for employees, and interject free-market competition,” Executive Director Richard Evans said Wednesday in a statement to Business Insurance.

Mr. Burke said he plans to create similar reports analyzing the alternative benefit plans of other companies, including Phoenix-based Swift Transportation Inc.