SC HB 4197 Proposes Workers’ Compensation Alternative

A bill that would dramatically alter the South Carolina workers’ compensation system has been introduced by a Republican representative (who is also a small business owner), and has been referred to the state’s Committee on Labor, Commerce and Industry.
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HB 4197, more widely known as the South Carolina Employee Injury Benefit Plan Alternative, would authorize new forms of insurance coverage and exemption from the current South Carolina Workers’ Compensation Law. The move comes one year after Tennessee also introduced similar legislation, though that was not ultimately voted on before the legislature adjourned for the session.

Only two other states – Texas and Oklahoma – allow workers’ compensation alternative options. The goal, supporters say, is to reduce employer costs associated with worker injuries and to “encourage market competition.” Two co-sponsors of the bill include a chairman on the labor committee, as well as another representative who is also a small business owner.

The particulars of the bill have not yet been decided, but lawmakers are working with a group called The Association of Responsible Workers’ Compensation Alternatives (ARAWC). The plan is to link up with technical experts once the plan moves farther along in the legislative process.

Those who are pushing for the major promise that it will require high-level benefits for workers.

However, there is some concern about a potentially negative impact for workers.

In Texas, the Division of Workers’ Compensation used to be run by the Division of Workers’ Compensation. It was a three-member board that was appointed by the governor, and it included a lawyer chairman, one employer and on laborer. The board later expanded to include six, part-time commissioners, though the split between laborer/employer was still fairly even.

Then in 2005, the state’s entire workers’ compensation was moved under the purview of the state’s Department of Insurance, which had long faced criticism for being too tight with the insurance industry. It’s also now run by a single commissioner who is governor-appointed.

This was after a number of legislative efforts in the 1980s resulted in a strict fee structure that essentially made it impossible for attorneys representing injured workers to make a living. Where there were previously hundreds of Texas attorneys working for the rights of injured workers, now there are about 30, according to an in-depth article by the ABA Journal.

That wasn’t just bad for the lawyers. It has meant injured workers frequently must go toe-to-toe unrepresented against insurance companies who can easily afford legal representation. This, say critics, has meant many legitimate claims are significantly delayed and even denied.

In that state, a third of companies are “non-subscribers,” and those firms employ 17 percent of the workforce, or about 1.7 million people. A lot of those have private plans, but some don’t secure any at all.

The point is the Texas model is not necessarily the most beneficial for workers, meaning our lawmakers in South Carolina need to tread cautiously on this issue. Opponents of the plan say not all employers have the ability to effectively manage their own plans.

The proposal would allow employers in the state to qualify for workers’ compensation exemption if they obtain certification from the state department of insurance to provide coverage through some other qualified employer injury benefit plan. The medical benefits would have to be comparable, and would need to provide for services ranging from surgical to dental, and include rehabilitation options and prosthetic devices. There would also need to be indemnification benefits for ranges of disability (from total to partial to permanent and death) for 75 percent of worker’s weekly wage.

If the measure is passed, it would take effect in January 2017.

If you have been injured at work, contact the Lee Law Offices at 800-887-1965.

Additional Resources:
South Carolina Jumps Aboard Workers’ Comp Alternative Bandwagon, June 10, 2015, By Amy O’Connor, Insurance rnal

More Blog Entries:
Jarrett v. Dillard – Employer President Personally Liable for Workers’ Comp Payments, July 27, 2015, Rock Hill Workers’ Compensation Attorney Blog

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