A new study from the International Association of Industrial Accident Boards and Commissions provides an independent assessment of an emerging “opt out” alternative to workers’ comp.
Historically, Texas has been the only state to offer employers the option to either purchase a workers compensation insurance policy for its employees, or choose instead to “opt out,” known as non-subscriber status in Texas. While the employee may retain the right to file suit for her employer’s negligence, Texas does not have any minimum requirements for the injury benefit plan, if any, an employer may provide.
Recent legislation in Oklahoma has attempted to convert to this “opt out” option for employers to implement their own workplace injury plans. The new study from the association focused on Oklahoma, and looked at proposed legislation in Tennessee and South Carolina.
Although the report acknowledged that benefits from generous employers could exceed existing workers’ compensation insurance policy benefits, it also found little or no state or federal oversight, fewer state-mandated benefits and extensive employer control “[afford] the darker possibility of minimal statutory benefits, stringent claims determinations, and a dispute process that seems unfair to claimants.”
For more on this growing debate to allow employers to “opt out” of workers’ compensation insurance, click here.