It's a Prairie Fire

"We may be looking at a prairie fire," Tulsa, Oklahoma attorney Steve Edwards, legislative consultant for the Oklahoma Injury Benefit Coalition on the alternative benefit measure that was passed by the Senate, told WorkCompCentral on Thursday.

He's talking about the sudden and explosive interest by business to take to other states the non-subscription model that may get approved by the Oklahoma House of Representatives as soon as Monday.

States that are reportedly now very interested and for which proposals may be filed as soon as this legislative session were identified as Colorado, Kansas, Louisiana and Tennessee.

Wal-Mart, a huge influence of workers' compensation operations nationwide as one of the nations biggest employers and certainly the nation's largest retailer, announced earlier this year it was opting out of the Texas work comp system to implement its own ERISA based non-subscription model. We can expect it to do so in Oklahoma as well.

Wal-Mart's decision runs counter to the trend in Texas which makes it even more notable.

Workers’ compensation law changes over the last few years have helped lower costs for employers, leading many companies to return to the state's workers' compensation system, according to Margaret Greenshield, chair of the Texas Alliance of Nonsubscribers.

Greenshield told WorkCompCentral that, "This migration back into the system is reflected in a 2010 (Texas Department of Insurance) survey that shows the number of Texas workers employed by nonsubscribers dropped from 25% in 2008 to 17% in 2010".

The same survey showed that the number of nonsubscribers among the state’s largest employers fell from 26% in 2008 to 15% in 2010.

Daniel Morales, spokesman for Wal-Mart, told WorkCompCentral that Wal-Mart’s ERISA plan will allow it to increase the pool of doctors available to treat injured workers (because they don't have to be qualified through the Texas work comp system) and allow those workers to receive treatment more quickly, and to receive indemnity benefits faster – and at a higher rate – than they would under workers’ compensation:

• There would be no waiting period under the Wal-Mart plan as opposed to Texas' seven-day waiting period; 
• Indemnity would cap at 90% of the employee's pay rather than the current $787 per week under Texas work comp; 
• Indemnity would be processed through Wal-Mart's payroll system, which makes it much more efficient than through a carrier/third party administrator.

Those are pretty compelling non-subscription benefits.

Rick Levy, legal director of the Texas AFL-CIO, has always been adamantly opposed to Texas non-subscription because in Texas there is no requirement that non-subscription meet the same or better standards as the work comp system. His tune changes though relative to Oklahoma's plan law.

Levy seemed to indicate he might be okay with the concept of non-subscription if there are safeguards that ensure that benefits under non-subscription at a minimum match what a state's work comp laws guarantee.

He noted, however, in the past Texas non-subscription proponents have argued against such minimum guarantees.

“They have told us that doing that would make the program nonviable,” he told WorkCompCentral when discussing non-subscription in Texas versus Oklahoma.

“My question to them,” Levy said, “is ‘are you ready to accept the same requirements in Texas?’”

It seems to me that Labor might get behind non-subscription Oklahoma style if such minimum guarantees are a part of the legislative deal making and Wal-Mart demonstrates leadership by ensuring that its non-subscription plan runs smoothly and provides benefits quickly, with less bureaucratic intervention and returns people back to work without stigma or discrimination.

In the end, that could spell the demise of workers' compensation as we know it - and that, in my opinion, may be a good thing as the raison d'être of work injury protection systems would return to its original mission: protecting employees and employers.