Here We Go Again: Arkansas Bill Would Establish ERISA-Based “Alternative” System for Workers’ Compensation

Is This a Different Tack to Allow Employers to “Opt-Out” of Compulsory Coverage?

Two days ago (April 2, 2019), Arkansas state senator Stanley Jason Rapert (Republican-35th District) introduced a bill in the state’s Legislature that—at least at first blush—may resurrect the contentious debate over an employer’s right to “opt-out” of mandatory state workers’ compensation coverage. If passed in its present form, the bill would enact the so-called “Universal Workers’ Compensation Act” (the “Universal Act”). As with the Oklahoma “experiment” that went down in flames in mid-September 2016 [see my earlier post on that subject], the proposed Arkansas act would lean heavily on employer-created benefit “plans” that would meet the requirements of the Employee Retirement Income Security Act of 1974 (“ERISA”).

24-Hour Protection?

I’ve spent all of 35 minutes skimming Senate Bill 673, so I reserve the right to revise and extend my remarks, but the bill would allow employers to establish plans providing benefits for the injury or death of a covered employee, without regard to work-relatedness. Make no mistake; this is an “opt-out” arrangement. Under what would become Ark. Code Ann. § 11-16-104, the Universal Act supersedes “any law of any state” (e.g., Arkansas’ current Workers’ Compensation Act) for any employer that secures coverage under its provisions.

Occupational Disease Claims?

I see nothing in the bill that would provide coverage for occupational diseases. This raises an interesting question: If the employer establishes a plan under the Universal Act, and if, for that employer, the Universal Act supersedes any other law, would the employer be required to provide benefits for an employee’s occupational disease that arose out of and in the course of the employment?

Irony in the Bill’s “Universal” Nature

Again, I haven’t had sufficient time to digest the bill in toto, but I’d be remiss if I didn’t comment upon what seems to be true irony in providing coverage for injuries and/or deaths, without regard to work-relatedness. Currently, Arkansas has perhaps the Nation’s most restrictive rule regarding whether an injury arises out of and in the course of the employment. Under current Ark. Code Ann. § 11-9-102(4), “compensable injury” does not include an injury “which was inflicted upon the employee at a time when employment services were not being performed,” … [see Larson’s Workers’ Compensation Law, § 3.01]. Perhaps more about that later, when I’ve had more time to review the proposed legislation. Stay tuned!