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Friday, 30 May 2014 00:00

Oklahoma Option in Workers’ Compensation Considered Big Improvement

Prior to 2013, the Oklahoma workers’ compensation system has been troubled for years.

  • Ranks 5th highest in workers’ compensation claims cost (2011 NCCI Report).
  • Ranks 6th highest in workers’ compensation premiums in the United States (2012 Oregon Workers’ Compensation Premium  Rate Ranking Summary).
  • Ranks 47th worst in 2012 workers’ compensation costs (American Legislative Exchange).
  • Received a “D” for the effectiveness of its workers’ compensation system in 2012 (Work Loss Data Institute).

As a result of the less-than-stellar workers’ comp system grades, state officials recognized that improvements are needed to better care for injured workers and employers.

A new Oklahoma workers’ compensation system, as well as an alternative to Oklahoma workers’ comp, has been in the works since April 2013. SB 1062 passed legislative hurdles and was approved and then signed into law on May 6, 2013, with an effective implementation date of February 1, 2014.

The Oklahoma Option is a coordinated approach to improving the relationship between the employee and employer in the event of workplace injuries. It focuses on immediate and outcome-based medical care that facilitates maximum recovery and less overhead. This focus reduces the largest part of the medica- only and lost-time claim costs currently within the workers’ compensation system. This system is attractive to both employers and employees and, hopefully, will eliminate the negative press that Oklahoma received in recent previous years.

SB 1062 has been incorporated into Title 85A of the Oklahoma statutes as the Administrative Workers’ Compensation Act and the Oklahoma Employee Injury Benefit Act. The law was not without challenges to its constitutionality, but courts later determined that it did not violate the constitutional ban on multiple subjects in a single bill.

SB1062 allows for employer choice between using the reformed workers’ compensation system or opting for an alternative system for all on-the-job injuries. By choosing the “Oklahoma Option,” the employer is not abandoning any responsibilities for the injured employees. The Option uses minimum workers’ compensation benefit levels, employee accountability, and a free market approach to medical management—all key cost drivers in the workers’ compensation system.

Additionally, the Oklahoma Option benefit plan document may broaden some benefits from the workers’ compensation minimum benefit standards. The employer plan document forms the basis of the employer/employee partnership and reinforces their commitment to achieve better medical outcomes based on physician judgment and more immediate medical care. Both the employee and employer are working together in this process to ensure excellent results. An additional area where the law does duplicate workers’ compensation is “exclusive remedy.” Only employees in Oklahoma can participate in an Oklahoma Option injury benefit plan. If an employer has out-of-state operations, it will have to secure coverage for those out-of-state employees.

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