Consider this: a company specializing in “opt-out” workers’ compensation plans for employers claims it has “saved” its clients $1 billion in the last decade. Now where do you suppose that $1 billion in savings came from? Perhaps some administrative expenses were reduced and maybe some doctors used charged less.
But the majority of those “savings” are not really savings. They are costs that had been borne by the employers through workers’ compensation insurance premiums that were now transferred to workers.
This transfer took the form of less coverage, of tighter reporting requirements for injuries (often by the end of a shift), of doctor’s exams being made exclusively by doctors handpicked by the insurance company and who understand who is paying their salary.
It takes the form of shorter periods of coverage and likely, lower compensation amounts. It took the form of broader interpretations of existing conditions. All of these actions lessen the amount of coverage to injured workers and increase their costs. While this has yet to occur in Wisconsin, it is likely that there are plans to attempt to implement it here.
The latest development in the opt-out movement has been the Oklahoma Workers’ Compensation Commission declaring a change in that state unconstitutional. This is important because while the ruling is likely to be appealed to a court, the process is likely to focus greater scrutiny on this issue, and this is not likely to be flattering to these programs.
As the Commission noted, the alternative plans are “a water mirage on the highway that disappears upon closer inspection.” It is important that this movement is challenged and politicians who support this change in workers’ compensation programs be questioned closely by their voters.
Source: npr.com, “Oklahoma Commission Declares Workers’ Comp Alternative Unconstitutional,” Howard Berkes, February 29, 2016