‘Opt-out' workers' Compensation Challenges Continue in Oklahoma

Posted by Charles Middleton on 03/18/2016

Q: In late February, the Oklahoma Workers' Compensation Commission found sections of the Oklahoma Employee Injury Benefit Act unconstitutional. What are the details of the decision?

A: In the case, the employee asserted a work-related injury due to a single event lifting incident. The employer had “opted-out” of the Administrative Workers' Compensation Act (AWCA) as allowed by the Oklahoma Employee Injury Benefit Act (OEIBA) by becoming a “qualified employer” and establishing an “Employee Benefit Plan.” After the asserted injury, the employee was denied her request for an MRI on the basis that her condition was “pre-existing” and not an “injury” as defined by the employer's plan. Because the Legislature granted the Workers' Compensation Commission with jurisdiction to hear appeals of adverse benefit determinations by qualified employers, the commission heard the appeal and ultimately determined the OEIBA to be unconstitutional. The commission found the OEIBA unconstitutional as a denial of equal protection of the laws for injured Oklahoma workers, as a special law that treats Oklahoma workers differently, and as a denial of access to justice for workers. 

 

Q: How does the opt-out system work?

A: Under the OEIBA, an employer may “opt-out” of the AWCA by becoming a “qualified employer.” To qualify, employers must provide specific notice to the insurance commissioner, as well as existing and perspective employees. In addition, an employer must pay certain fees and establish a “written benefit plan.” This plan must provide for the payment of the same form of certain benefits provided under the AWCA. Employers may self-fund or insure, and depending on the number of employees and assets, they may do so according to guidelines laid out in the OEIBA. In essence, employers handle workers' compensation matters internally and establish an internal appeals process. Once the internal appeals process is exhausted, the OEIBA grants the commission the ability to hear appeals of adverse benefit determinations such as in the case in question. 

 

Q: How will this decision impact Oklahoma businesses and employees?

A: Certainly, this impacts current employers that have written benefit plans. On a positive note, the commission commented that these employers will not be considered to have failed to secure workers' compensation coverage, which in essence should protect those employers from any fines for failure to secure coverage. The OEIBA and the commission decision specifically provide that employers will have 90 days to secure coverage or an own risk certificate under the AWCA from any final decision. An appeal by the employer to Oklahoma's Supreme Court in this case is definitely anticipated, and the commission ordered that the case be referred to a commission administrative law judge on the merits under the AWCA, only after appeals on the case are decided. According to the commission, employees who are injured on the job now will be treated equally in the same venue. Injured workers appear to be pleased with the decision as they feel employers shouldn't have the ability to define what constitutes an injury.

 

Q: How do you recommend businesses handle workers' comp cases moving forward?

A: It's unclear whether this ruling will have an immediate effect on all pending claims under written benefit plans. Employers with these plans should review their policies to determine what type of protections they have and identify a contingency plan if the Supreme Court throws out the OEIBA in its entirety. In light of this recent decision and a likely pending appeal, employers who don't have written benefits plans should continue their regular course of action by securing coverage under the AWCA or an own risk certificate. Such cases will continue to be tried in the commission, keeping in mind that there are many other pending constitutional issues before the court on the AWCA, as well. Oklahoma is in a bit of a waiting game currently as challenges under the AWCA and OEIBA continue.

PAULA BURKES, BUSINESS WRITER

Published The Oklahoman, March 18, 2016