WORKERS’ COMP IS CALLED COSTLY FOR STATE EMPLOYERS
Fixing employees’ bad backs, sore knees and other work-related injuries costs Oklahoma City-based Hobby Lobby three times as much in Oklahoma as it does in Texas or Arkansas.
Employers who do business in other states offer similar experiences.
“We’ve operated in a lot of states, and we’ve always had a lot of (workers comp) problems in Oklahoma, both in terms of cost and in terms of how the system works — or doesn’t work,” said Mark Schell, general counsel of Tulsa-based oil and gas company Unit Corp.
By most measures, Oklahoma is not the most expensive state for workers’ compensation. But it is close. And, perhaps more importantly, it tends to be much higher than surrounding states.
According to the National Council on Compensation Insurance, which gathers and analyzes data used to set workers’ comp insurance rates, Oklahoma workers are more likely to file workers’ compensation claims than those in surrounding states, are more likely to miss work because of injuries and to have injuries that result in some form of disability payment.
Reform efforts
The Oklahoma Injury Benefit Coalition, a business group lobbying for major changes to Oklahoma’s workers’ comp laws, asserts that under some circumstances comparable claims cost 10 times as much or more in Oklahoma than in Texas.
Unsurprisingly, state employers are pressing the Legislature for reforms drawn from neighboring states — especially Texas, the only state that allows employers to “opt out” of the workers’ compensation system altogether.
The Oklahoma Injury Benefit Coalition wants state employers to have the option of, in effect, creating their own workers’ compensation plans.
Unlike Texas, the coalition’s proposal would include minimum benefits and would not allow employers to “go bare” — that is, not provide workers’ compensation benefits at all.
Under the proposal, which lost narrowly in the House of Representatives last year after passing the Senate, workers’ compensation would be treated as a benefit similar to health insurance. Each employer would set its own benefits, with most claims settled by the plan administrator rather workers’ compensation court.
Employers say the arrangement drastically reduced unnecessary expenses in Texas by squeezing out lawyers and duplicative medical consultations.
Skeptics say it has left workers at the mercy of unscrupulous insurers and indifferent employers.
The American Bar Association Journal, in an October 2011 article, relates the story of a seriously wounded law officer whose helicopter flight from rural east Texas to a Beaumont hospital was ruled “medically unnecessary” by the workers’ compensation insurer.
Other stories claim injured workers are denied needed treatment and forced to return to work too quickly.
Other states’ plans
Becky Robinson, vice president of risk management for Hobby Lobby, said 90 percent of her company’s Texas employees are satisfied with their workers’ compensation plan.
Tulsa-based QuikTrip and Oklahoma City-based Love’s Country Stores also say they have relatively few complaints from Texas employees.
“We think we can take better care of injured employees,” QuikTrip spokesman Mike Thornbrugh said.
Even Love’s, which opted to remain in Texas’ workers’ compensation system, has had a better experi- ence south of the Red River.
“It’s easy to administer and easy to understand,” said Carl Martincich, director of risk management for Love’s.
Other states, said Martincich, “have taken the complexity out of the system. All the states around us are much simpler.”
It could be argued that Texas gives responsible employers the latitude to provide for injured workers at less expense, but that it also makes it easier for irresponsible employers to shirk responsibility.
Oklahoma, meanwhile, provides more worker protection, but at considerable cost to well-intentioned employers.
Under Oklahoma’s system, workers and employers each tend to wind up with their own lawyers and their own doctors, which increases expenses not directly related to treating injuries.
According to the National Council on Compensation Insurance, Oklahoma’s workers’ compensation medical expenses are in line with adjoining states.
Other costs, including disability payments, are what make Oklahoma expensive by comparison.
“It’s not that we find objectionable fixing up the person who is hurt,” said Mark Schell, who serves as president of the Oklahoma Injury Benefit Coalition. “What is really objectionable is that we have to undertake all of this stuff that goes along with it.”