Workers’ Compensation Opt-Out Plans: Part 1

Some of the nation’s biggest companies in the health care, retail, food and trucking industries in Texas and Oklahoma are choosing to opt out of state workers’ compensation laws and implement their own insurance. It seems a radical idea, but it’s gaining traction, with lawmakers in South Carolina and Tennessee weighing similar measures.
An attorney in Dallas is leading a national effort to “re-engineer” the workers’ compensation system, which guarantees those injured on the job coverage of medical bills and supplemental wages until they can return to work. That attorney, Bill Minick, owns a company that writes about 50 percent of the opt-out plans in Texas and 90 percent of those in Oklahoma.

According to the latest in a collaborative journalistic series by ProPublica and NPR, “Insult to Injury: Inside Corporate America’s Campaign to Ditch Workers’ Comp,” this is a man whose firm not only boasts clientele such as Walmart, McDonald’s and dozens of others, he “pioneered the concept” of opting out of workers’ compensation, and he helped to write the current law in Oklahoma.

The journalists note that this movement is deeply troubling not only for what it will mean to workers, but the fact that very few are stopping to seriously analyze that question. Their bottom line: It isn’t good.

In this first of a two-part blog series on this issue, our workers’ compensation lawyers lay out some of the startling facts uncovered by this report. The journalists were able to obtain the injury benefit plans of almost 120 companies that have opted out in both Oklahoma and Texas. Many of those plans were written by the firm Minick owns. What the researchers found was that these plans almost without exception had:

  • Lower benefits;
  • Greater restrictions on who could recover and when;
  • Almost no oversight that was independent.

It’s these type of plans that explain why in those states, a fast food restaurant won’t cover carpal tunnel syndrome, or why a huge chain of nursing homes in that state won’t cover employees who are infected with bacterial infections on-the-job. In some cases, policies have it woven in that if workers don’t report injuries by the time they clock out for the day, they forfeit their right to benefits. Other policies allow managers to accompany workers to their doctors’ appointments for work-related injuries.

Companies that opt-out can pay tends of thousands of dollars less per serious worker injury than those that do not. That’s because these plans, unlike most traditional workers’ compensation coverage, is usually cut off after 24 months. There is also no compensation offered for permanent disabilities, while compensation for catastrophic injury and death is severely curtailed.

What don’t they cover? There are dozens of pages of lists. Exposure to asbestos. Assault on the job (unless the worker is “defending employer’s property or business”). No wheel chair vans. No chiropractors. Only a set number of health care visits.

The control over the legal and medical process after a work-related injury is granted almost entirely to the employer, who is responsible for choosing the physician (who can examine and re-examine the patient as frequently as they choose), and stipulations require workers to settle for whatever the company wants, or risk losing all benefits. They can appeal – before a committee chosen by the company.

All of this belies the very purpose of workers’ compensation, which was based on the principle that employers owe a duty to employees and their families when they are hurt on the job. The trade-off was that in exchange for giving up the right to sue an employer, the employer would agree to a no-fault system of liability that would ensure the worker could avoid bankruptcy just for an on-the-job injury or illness.

Now, under the system Minick has helped to grow and spread, companies are reneging on their end of the bargain.

Look for the upcoming Part 2 of this blog series to learn more.

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

Additional Resources:
Opt-Out Plans Let Companies Work Without Workers’ Comp, Oct. 14, 2015, By Howard Berkes, NPR, Michael Grabell, Pro lica

More Blog Entries:
Perez v. Loren Cook Co. – OSHA Machine Guarding Standard Affirmed, Oct. 22, 2015, Spartanburg Workers’ Compensation Lawyer Blog

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