All Eyes on Oklahoma legislature
For those who haven’t paid attention, the state of Oklahoma is considering numerous major workers compensation reform proposals. Several issues will likely pass throughout the year, but a couple are key proposals being considered that will have a major impact on work comp premiums in the state.
First, the idea of shifting OK’s Workers’ Compensation Court to an administrative system will likely pass in some form or another. This will lead to long-term reduction in work comp premium for business owners. As a recent editorial in the Oklahoma Gazette (http://www.okgazette.com/oklahoma/article-17715-point-time-to-fix-wo.html) proclaims: “Ours is a system where everyone loses: the employers, the taxpayers and, most importantly, the injured workers themselves.”
Currently, the workers compensation system often pits the employer and employee against each other in litigation proceedings characterized by dueling trial lawyers and dueling doctors. Simply put, that’s a lot of people getting paid (http://mooreamerican.com/local/x730446285/Senate-unveils-Administrative-Workers-Compensation-Act).
Under one proposal of the reform, beginning Jan. 1, 2014, workers compensation claims would be heard and decided by administrative law judges who are appointed by a group of three commissioners. This theory would help streamline the claims process, significantly reducing the amount of claims insurance companies pay out since it would prevent claims from bottlenecking in the court system.
Employers are currently paying the sixth-highest workers compensation rates in the country, which seems strikingly out-of-balance for a country that’s 49th in cost of living. The good news is the legislative branches have two boarder states they can use as inspiration for reform. The obvious solution is to model a workers compensation system similar to Arkansas, which ranks 49th in work comp premium rankings.
Another option is an extremist reform to model after Texas Workers Compensation, which doesn’t mandate workers compensation, but employers are liable for any workplace injuries through the judicial system. There has been some discussion about making Oklahoma a voluntary coverage state (OK, 48 other states, and DC all mandate companies carry work comp coverage). This is only a far-fetched theory, but if it were to come to fruition, a change like that could potentially have a significant impact on the workers comp market nationwide. Not only are carriers watching Oklahoma closely, independent insurance agencies are also paying close attention (Insurance Journal article: http://www.insurancejournal.com/news/southcentral/2013/02/08/280719.htm).
