Be on the Lookout for Workers’ Comp Opt-Out Plans

Wokers comp opt out

Companies have begun opting out of state workers’ compensation plans and making their own. For the moment, it’s contained to Texas and Oklahoma, though Tennessee and South Carolina are giving the notion serious consideration. But, when big businesses in other parts of the country get a look at the cost savings, we could be looking at a full-blown pandemic.

An independent analysis of these opt-out plans compared to state workers’ comp found some genuinely disturbing facts.

  • The plans almost all have lower benefits, a lot more restrictions, and almost no independent oversight.
  • Traditional workers’ comp guarantees lifetime medical care, but the opt-out plans cut off treatment after about two years. They don’t pay compensation for most permanent disabilities and have strict payout limits for deaths and catastrophic injuries.
  • They plans typically won’t pay for wheelchair vans, exposure to asbestos, silica dust or mold, assaults (unless the employee is defending “an employer’s business or property,” whatever that means), chiropractors, or any more than 75 home health care visits.
  • The plans in both Texas and Oklahoma give employers almost complete control over the medical and legal process after workers get injured. Employers pick the doctors and can have workers examined — and reexamined — as often as they want. And they can settle claims at any time.
  • Workers are forced to accept whatever is offered or lose all benefits. If they wish to appeal, they can — to a committee set up by their employers.

It probably comes as no surprise that unions, trial lawyers and insurance companies are in love with this new opt-out plan — especially since there’s so much fine print. Included in the fine print, an option where  employers can terminate workers’ benefits for being late to doctors’ appointments, failing to check in with the company, or even consulting their personal doctors.

The bottom line is that these plans are completely unregulated and are setting a dangerous precedent. Let’s educate our clients, so that they understand how important it is to maintain state workers’ compensation and not opt-out. 


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