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A Look at Workers’ Compensation: Opting Out

NPR and ProPublica recently launched an investigation into the changing workers’ compensation system across the country, and their efforts uncovered a new trend — companies are opting out of the traditional workers’ compensation system and using their own personalized plans.

In the article, Inside Corporate America’s Campaign to Ditch Workers’ CompNPR identifies the leader of this campaign, lawyer Bill Minick, who believes that companies should be able to make their own decisions when it comes to their employees’ compensation after an accident.

While the option to “opt out,” as the trend is being called, is prevalent in Texas and Oklahoma at the moment, other states are taking note. In Colorado and many other states across the country, workers’ compensation systems are operated according to established laws that are applicable for all companies in business within that state.

However, with Texas leading the charge and Oklahoma starting to make similar changes, the interest in opting out of state-regulated workers’ compensation systems is growing. NPR’s article states that South Carolina and Tennessee are considering changing their laws to allow opt-out programs for companies in their states.

How is Opting Out Affecting Workers Compensation Claims?

Workers’ compensation is one way employers can help employees as they receive medical attention and recuperate from injuries received on the job or while performing their work responsibilities. Some on-the-job injuries require medical care, hospitalization, surgery and even rehabilitation, all of which could drain an injured person financially, especially if he or she is unable to work due to the injury.

Through a workers’ compensation claim, the employer can cover those expenses, as well as any time off, or reduced work time to provide the employee with the financial ability to stay afloat.

If a company opts out of the state-regulated system, it elects to provide its own set of services any time a worker is injured on the job. Depending on how each company chooses to run its system, the outcome could be better — or much, much worse — for injured employees.

NPR researched over 100 workers’ compensation plans of companies in Texas and Oklahoma that had opted out of their state’s plans. According to their investigation, their article states that, overall, “the plans almost universally have lower benefits, more restrictions and virtually no independent oversight.” The plans grant the majority of control to the companies that make decisions on the medical and legal processes after an injured employee seeks compensation.

The most troubling part of this plan, according to investigators, is that workers must accept what their company is offering or they lose their benefit options — and the company can choose to settle whenever it wants. Even the appeals process is kept in-house, so a worker who files an appeal after an unsatisfactory benefit determination faces a committee appointed by the employer rather than an unbiased organization.

Colorado Laws

Fortunately for Colorado employees, our state has not yet considered offering companies the opt-out choice. However, the spread of interest is something to keep an eye on and should spur employees to ensure that their pending claims are getting handled now, under today’s current system. For more information, contact an attorney at Levine Law, a Denver workers’ compensation law firm, today.

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