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Opt-Out: A Tale of 2 Tweets

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When I checked my Twitter feed one morning last week, two tweets caught my attention:

1. ARAWC: Tennessee Legislators Introduce Workers’ Comp Option Legislation http://goo.gl/fb/Wt7hWh
2. Supreme Court Asked to Review Constitutionality of Opt-Out Process. Full story at: http://ow.ly/JeAlt

I find the juxtaposition interesting: Tennessee legislators are trying to create an opt-out process in their state; meanwhile, attorneys in Oklahoma are trying to undo their opt-out process by challenging its constitutionality.  

Oklahoma’s opt-out provision was created by the passage of Senate Bill 1062 in 2013 and, at the time, several constitutional challenges were made. But now a group of attorneys is again taking the constitutional challenge directly to the Oklahoma Supreme Court, hoping to have the opt-out provision struck down.

The Tennessee legislation, SB 721, requires employers who choose to opt-out of the system to set up their own plans meeting certain requirements. This is similar to the opt-out provision in Oklahoma, and while we haven’t heard any constitutional objections from Tennessee, I am sure they will follow.

It appears as though Oklahoma and Tennessee are trying to replicate the results of Texas – the only other state that permits "opting-out." The Texas nonsubscriber provision has been in place for nearly 100 years, and many companies have seen significant cost savings and better claim outcomes in that state.

The goals associated with providing employers with the option of opting out are well outlined by the Association for Responsible Alternatives to Workers’ Compensation (ARAWC):

  • An Option can reduce the overall costs of treating employee injuries and support local job growth and economic development.
  • An Option can deliver better medical outcomes and higher satisfaction for injured workers.
  • Employers in Option states see significant savings and improved medical outcomes.

But, these changes aren’t made overnight.  

I often equate making changes to the workers’ compensation system to changing a tire on a moving vehicle. The solution has to fit an ever-changing system. It’s not something that can be done easily, and in order to be successful, it must be well thought out, well planned and well executed.

Ben Roberts is general counsel for Prium, a managed care provider for the workers' compensation industry. This column was reprinted with permission from the firm's Evidence Based blog.

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