Oklahoma Completes Workers’ Compensation Overhaul

Oklahoma Gov. Mary Fallin on May 6 signed a measure to overhaul the state’s workers’ compensation system, one that was backed by Republican lawmakers, the state’s top insurance regulator and insurance trade groups.

Senate Bill 1062 changes Oklahoma’s current court-based system to an administrative structure, a move that supporters say will reduce workers’ comp costs for businesses.

“For decades, Oklahoma has had one of the most expensive and inefficient workers’ compensation systems in the country, a constant obstacle for business owners looking to expand operations or create more jobs,” Fallin said in a statement released by her office. She said the bill will dramatically lower business costs and free up “private-sector resources that can be invested in jobs rather than lawsuits.”

Democrats who opposed the bill complain that the cost savings come at the expense of injured workers, whose benefits are slashed by roughly $120 million as a result of the bill, the Associated Press reported. The governor, however, said the “reforms ensure injured workers are treated fairly and given the medical care needed to return to work.”

Oklahoma Insurance Commissioner John D. Doak called the signing of the bill “a historic moment for Oklahoma and for workers’ compensation reform.”

While acknowledging the bill was not perfect, leadership of the Independent Insurance Agents of Oklahoma strongly endorsed SB 1062.

In March, Chairman Ed McGrath sent a letter to IIAO members, calling the measure “the opportunity of a lifetime! The reforms are too important to let slip away. … It will bring needed reforms for Oklahoma businesses, injured workers, and insurance carriers. It will also bring new options for consumers to choose which program is best for their business.”

Some agents had expressed concerns about the optional coverage provision in the bill. McGrath, however, said the majority of those concerns had been addressed. He said the optional coverage is a choice within the workers’ comp system.

“It will be a licensed insurance product that will be regulated by the Oklahoma Insurance Commissioner, as are all other carriers,” he said.

The Property Casualty Insurers Association of America (PCI), which also backed the measure, said important provisions in SB 1062 include:

• Replaces the Workers’ Compensation Court with an administrative dispute resolution system.
• Revamps the indemnity benefit system to make it more predictable and easier to administer without the need for attorney involvement.
• Allows Oklahoma employers to opt out of the workers’ comp system and administer work-related injury benefits to employees through a qualified benefit plan.
• Allows Oklahoma employers who remain in the workers’ compensation system to develop an alternative dispute resolution program subject to the Federal Arbitration Act.

CompSource Oklahoma