Tuesday, December 11, 2012

Decade of the WIIPs

With 2012 winding down and becoming past history, 2013's workers' compensation issues are starting to warm up.

I have heard a lot in the past few days about regulated non-subscription and it is clear to me that this is not just a passing fad, but that there is some very important momentum developing in several states, not the least of which is Oklahoma of course, since Oklahoma played with the idea this past year, but even Texas where non-subscription originated.

While the Texas AFL-CIO had opposed non-subscription in the past and had been a vocal proponent of mandatory workers' compensation for all employers, Austin attorney Rick Levy, who is director of legal services for the Texas AFL-CIO, told the Texas Senate Committee on State Affairs Monday that the state should look at an option being considered by Oklahoma as an alternative program - that is regulated non-subscription, or what I like to refer to as Work Injury Insurance Plans (WIIP).

In other words, either an employer subscribes to traditional workers' compensation, or has in place an approved non-subscription program or WIIP that meets minimum statutory requirements.

If such requirements “are good enough for the workers of the state of Oklahoma, surely they are good enough for workers and employers in Texas,” Levy said.

There are several studies and reports that will be published in the coming months that generally are going to be favorable to such considerations.

Some of the reports may be dismissed, despite their scholastic quality, as biased. Other reports, however, are completely independent.

What these reports are going to show is that, for employers that have the resources, WIIPs can not only save money for employers, but can deliver superior benefits and employment opportunities to workers.

The pressure is going to be on in Texas to implement laws mandating either workers' compensation or enrollment in approved WIIPs.

The Division of Workers’ Compensation, in its biennial report to the Legislature issued earlier this month, said approximately one-third of Texas employers have chosen to opt out of the state’s workers’ compensation system.

The report also says the percentage of Texas employees working for non-subscribers increased from 17% in 2010 to 19% in 2012.

How many of those have work injury replacement plans in place I don't know.

But, as Levy said to the Senate committee, those numbers mean approximately two million Texas workers lack the protections afforded by workers’ compensation, including income benefits, lifetime medical benefits and protection from retaliatory discharge.

The evidence is clear, as upcoming studies are going to show, that WIIPs allows employers to control costs and offer better benefits to their employees.

James Avery Co. in Kerrville, Texas, has a WIIP. Margaret Greenshield, human resources director for James Avery, told the committee that the company has been able to achieve a 99.5% return-to-work rate and pays injured workers 100% of their wages for their first 40 hours off work and 80% of their pay after that period.

The company has passed savings on to employees through profit-sharing and lower employee contributions to health care, according to the company's representative in the story.

I'm an employee (okay I own most of my company) but one thing I can tell you that is likely universally true - I LIKE profit-sharing. I'd rather share in the profits than see that money go towards insurance premiums if possible! I think most employees would say the same thing.

The James Avery story is the kind of story that is going to permeate the coming publications on WIIPs. Are they perfect? Of course not. Are there outliers and programs that don't work? Of course there are.

And likewise, there are many failures in traditional workers' compensation.

Society has changed dramatically in the past 100 years. Worker protection laws have also changed dramatically.

Workers' compensation, despite all the reforms that trend every decade or so, has not. In the bigger states, workers' compensation seems to be crumbling under the weight of its own regulation.

It's a shoe-in that Oklahoma legislators will be asked to consider permitting WIIPs again in 2013. It is possible that Texas legislators will be asked to mandate either work comp or approved WIIPs when the Legislature convenes on Jan. 8.

Tennessee, from what I understand, may also see requests for WIIP options.

My guess is that this next decade will see this trend accelerate across the nation. At some point both Labor and Business are going to get tired of endless reforms that don't deliver as promised. The essential parties to the bargaining table, Labor and Business, at some point in these contentious states (yes, I'm talking about California, New York, Florida...) are going to ask to take control of the their own plights and futures and work out their own deals free of bureaucratic interference with all of the attendant costs and delays.

If anything is clear to me, this decade is going to be punctuated by a social experiment as great as the original workers' compensation laws.

WIIPs are here to stay.

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