Monday, April 29, 2013
Weekly Opinion Editorial
by Steve Fair
Real workers compensation reform is within sight in Oklahoma! Senate Bill #1062, authored by Senator Brian Bingman, (R-Sapulpa) passed the State House 74-24 last week. It now heads back to the Senate for approval on the House amendments that were added and then to the Governor’s desk for signature.
SB#1062 will move Oklahoma from a judiciary workers compensation system to an administrative system. Oklahoma is one of only a handful of states that still uses the court system to settle workers comp disputes. It is an adversarial system that reduces the amount of payment to injured workers and forces Oklahoma employers to pay some of the highest workers comp insurance rates in the country. Under the current system, workers who are injured on the job could wait years for a benefits judgment due to the slow and costly legal process under the current judicial system.
SB#1062 will implement a system similar to Arkansas. Back in the early 1990s, Arkansas moved from a system similar to what Oklahoma has to an administrative system. Since then, workers compensation insurance premiums to employers have dropped steadily. Last year, Arkansas’ workers comp premiums were 63% of the national average, Oklahoma’s was 147% of the national average.
"There's too much litigation in Oklahoma," said Allyn Tatum, a former Arkansas Workers Compensation Commission chairman and Tyson Foods executive. "In Arkansas," said Tatum, "the incentive is for employers to put employees back to work, and for employees to go back to work."
In an interview with Capitalbeatok, Oklahoma Insurance Commissioner John Doak said, “Workers’ Compensation reform is a subject that I identified as critical and important to our state from the moment I was elected. Oklahoma has one of the highest average costs of Workers Compensation benefits in the nation at a rate of $830 per employee. Because Arkansas and Texas are under $300 per employee, this has not only had an impact on our state economy, but also limits the growth of local businesses.”
Oklahoma Labor Commissioner Mark Costello told CapitalBeatOK what might, politically, be the most significant thing about anticipated passage of the administration system, saying, “The days where trial lawyers dominated Oklahoma politics for their own economic interests are at an end. After all, it is workers’ comp, not lawyers’ comp.
Three observations about worker’s comp reform:
First, don’t expect existing Oklahoma businesses to start hiring more workers immediately because of the reduction in workers comp premiums. It takes some time for the impact of a price reduction to filter its way to the public. The long term impact will be significant, particularly on the recruitment of new businesses to the Sooner state. For years, the knock on Oklahoma by potential businesses was we didn’t have right-to-work; we had high workers compensation premiums and a state income tax. Two out of three of the issues have been addressed and the legislature is making progress on the income tax (reducing it to below 5%).
Second, credit the Republican-led legislature with having the courage to address the issue. Past legislatures have nibbled around the edges of workers comp reform for years, making some progress, but still leaving the lawyers in the system. They were simply afraid of upsetting the powerful trial lawyer lobby who didn’t give up easy. When Senator Anthony Sykes, (R-Moore) presented workers comp reform two years ago, he was attacked relentlessly by the trial lawyer lobby. While Sykes didn’t waffle or crack under the pressure, their tactics were effective enough with other legislators to derail a total change in the system.
Third, workers compensation reform(SB#1062) is a win-win! Oklahoma’s injured workers will get more money in settlements. Oklahoma employers will pay lower premiums. The system will be more civil and less adversarial. What’s not to like about that?