Workers’ Compensation Opt-Out Plans: Part 2

Earlier this year, South Carolina Rep. David Hiott (R-Pickens), introduced a measure to the state legislature that would allow employers to opt-out of the state workers’ compensation program, and instead implement their own injury benefit plan alternative.
Tennessee is considering a similar measure, and the option is already available in Texas and more recently, Oklahoma.

This is our second in a two-part series which looks more closely at the first in-depth analysis of these programs and what they mean for workers. Veteran reporters from NPR and ProPublica teamed up to conduct research of benefit plans of more than 120 companies that are participating in these opt-out plans. What they found was by-and-large, these plans offered workers lower benefits, restricted access to benefits and very little control over the medical care they received or benefits obtained.

The investigation started with the efforts of a Dallas-based attorney who helped to press lawmakers to implement an opt-out system there. He actually helped write the law in Oklahoma, and now, through is firm, is in charge of 90 percent of the opt-out benefits plans in that state. He also handles half of the opt-out corporate benefits plans in Texas.

Further, the investigation showed that in addition to the fact that companies in this system have complete control over who their employee will see – and how often they will be seen – the medical director who chooses which doctors will review those cases and decide whether the injuries are work-related (and thus compensable)? Minick’s wife. She also frequently serves as an expert for insurance companies and employers.

Whereas state-run programs require companies to continue providing benefits to injured workers until they recover (sometimes, for life), these programs cut workers off usually after two years. The list of conditions for which coverage isn’t available is practically a mile long and workers and their families often receive very little comparatively for catastrophic and fatal injuries.

Of course, workers do retain the right to sue (or rather, arbitrate), but that assumes the worker can prove the company was expressly at-fault. Specifically for workers who have suffered slip-and-fall and lifting injuries, the proof burden is high. Further, while workers who file workers’ compensation claims are protected from termination as retaliation, the Texas Supreme Court has held that workers in opt-out plans aren’t entitled to that same protection.

All of this comes on top of an investigation earlier this year by ProPublica that revealed how many states have been slowly peeling away these protections. New laws have made it more difficult for workers to qualify for coverage. Benefits have been cut and insurance companies and employers have an increasing amount of control over medical care.

One worker explained how after suffering a slip-and-fall at work, he sustained a hernia. He’d suffered two hernias before at work, and had applied for workers’ compensation with no problem. But this time, the company had since opted-out. They wouldn’t cover the third injury because, they said, the hernia was only covered if it occurred below the belly button. He’s since incurred more than $10,000 in medical bills.

Some companies say they have seen their workers’ compensation costs drop by more than half. Of course, it’s not difficult to see why when you start looking at numbers like that.

The fine print in many of these opt-out plans are extensive, sometimes allowing companies to get out of covering work-related conditions such as chemical exposures, cancers and heat stroke. In the end, many of these costs are shifted to taxpayers in the form of Medicaid, Medicare and Social Security disability. In fact, some companies even require it. For example, one large box chain store says employees are to take whatever benefits are available – including SSDI.

This is not the kind of system we need in South Carolina.

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

Additional Resources:
Inside Corporate America’s Campaign to Ditch Workers’ Comp, Oct. 14, 2015, By Michael Grabell, ProPublica, and Howard Berk NPR

More Blog Entries:
Morrison v. Wal-Mart – Compensation for Exacerbation of Work Injury, Oct. 19, 2015, Rock Hill Workers’ Compensation Attorney Blog

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