Initiatives to radically change the 100-year-old workers’ compensation system are growing, despite the daunting state legislative barriers of status quo defenders and inertia.

Now it turns out that Maine has a statute on its books that offers a strikingly direct and uncluttered opportunity to radically redesign the state’s system, employer by employer.  Why no one appears interested in seizing the opportunity sheds some light on the potential limitations for radical redesign.

Today, the opt-out movement is expanding into southeastern states, led by the Association for Responsible Alternatives to Workers' Compensation. Expect perhaps a half dozen legislative proposals to emerge in 2016.

Paul Sighinolfi, executive director of Maine’s Workers' Compensation Board, pointed out an 89-word law, enacted in 1992:

“After consultation with the Superintendent of Insurance, the board may approve an agreement entered into between an employer and some or all of the employer’s employees to secure the payment of compensation and benefits through an alternative program that is different from but not less than the compensation and benefits provided by this Act. The alternative program may not be approved by the board unless it provides for compensation and benefits in addition to those required by this Act and unless it is for a fixed period of time.” (Title 39-A Maine Revised Statutes Annotated, Chapter 1, Section 111)

In length, a tiny fraction of the Oklahoma opt-out law enacted in 2013 and the failed Tennessee proposal in 2015, the statute shows that radical redesign need not be complicated, at least in terms of authorizing legislation.

Its original intent was to support the creation of so-called “24-hour coverage” plans, melding workers’ comp with group health and disability benefits. The concept popped up in the early 1990s, soon to die in the face of complexity and lack of sustained support. Nine states enacted enabling legislation. The National Association of Insurance Commissioners adopted a model act for pilots. 

Gary Anderberg, now with Gallagher Bassett, was involved in the design and launch of SinglePoint, a 24-hour plan for California. It included a single entry portal and “heavy emphasis on aggressive WC and disability intervention for all time loss claims—WC or health.” In Maine, some considered the concept, but it appears that no pilot got off the ground.

But might the statute be useful for a simpler design, such as integration of workers’ comp with paid and unpaid leaves? This design could increase worker benefits, introduce alternative dispute resolution, aim to improve the quality of medical care, and simplify the employee’s access to benefits.

One senior insurance executive in Maine called the statute a “non-event,” noting his perspective that workers’ comp insurance and self-insurance has proven sufficient for the market and an alternative program would not be worth the effort to create.

Maine’s workers’ comp costs have been cut in half since the early 1990s. The number of work injuries have declined by about half. And the state has large mediation and worker advocacy departments.

Sighinolfi said the trauma of the early 1990s, when the state was shut down for three weeks over the issue of reform, “would come out of the woodwork and argue the melding of leaves is designed to favor management over labor or labor over management." Workers’ compensation works in this state. It is not perfect but it provides reasonable protections and benefits to injured workers and at the same time insulates employers from liability at a reasonable cost.

“We can speculate that changes in our economy (the advent of the shared economy) could lead to a comprehensive change in our leave programs. These changes are happening fairly rapidly, but at present they still seem to fit within our 99-year-old system.”

Opt-out advocates tend to want an alternative system that is as far removed as possible from the existing workers’ compensation system, according to Steve Bent, of the Austin-based Texas Association of Responsible Nonsubscribers. 

The Maine statute may scare off these advocates, as it gives the superintendent of insurance great discretion over plan design.

These advocates focus on states where the political climate is more friendly to privatization. Maine isn’t one of them, even with an inviting statute on the books.