Orwellian Equality: Oklahoma’s Controversial Workers’ Comp Opt Out Legislation

Original Workers’ Comp Scheme: Equal Treatment of All Injured Employees Within a State

In Orwell’s classic allegorical work, Animal Farm, Snowball and Napoleon, recognizing the horrors of the status quo, organize a rebellion and drive the irresponsible Mr. Jones off the farm, adopting the Seven Commandments of Animalism, the most important of which is: “All animals are equal.” Alas, they soon run into difficulties; both Snowball and Napoleon want to dominate the other. Eventually Napoleon, with the help of his dogs, drives Snowball away and reorganizes things. The situation continues to spiral downward until finally, the Seven Commandments are abridged into but one: “All animals are equal, but some animals are more equal than others.”

In a somewhat analogous fashion, responding to a societal crisis in the early decades of the 20th century, Oklahoma–like virtually all her sister states—passed workers’ compensation acts. Striking what came to be known as the “Grand Bargain”—there are actually 50 “grand bargains,” since no two state acts are identical—both sides to the employment equation compromised. While the Oklahoma comp system varied a bit from other states, it had at least one thing in common with virtually all her neighbors: within the State of Oklahoma, all employees were equal.  That’s no longer the case.

Napoleon Ran Snowball Out of Oklahoma City

The relative equilibrium established between the Oklahoma employer and employee remained intact for nearly a hundred years. By the second decade of the 21st century, however, a number of large multi-state employers had grown weary with the terms of the original bargain. Some in Oklahoma saw employers in Texas, the only state with a truly voluntary workers’ compensation system, as enjoying a significant and “unfair” advantage. Something had to be done, said opt out proponents. And so, with the passage of Oklahoma’s opt out law [2013 Senate Bill 1062], signed by Governor Fallin on May 7, 2013, and which took full effect on February 1, 2014, Napoleon—in the form of Oklahoma’s business interests—ran Snowball—in the form of those favoring a state-run workers’ compensation system—out of Oklahoma City.

Disparate Treatment of Similarly Situated Employees

Proponents of the opt out law argued that under the new separate—but equal—setup, all Oklahoma employees would be guaranteed the same sort of rights and benefits, whether they worked for an employer who opted out of the state-run system or not. The only casualty would be the inefficient system that seemed always to get bogged down in adversarial disputes. Opponents of the opt out legislation, including this author, pointed to various ways in which the two groups of Oklahoma employees would likely receive disparate treatment. For example, under the Oklahoma opt out law, an employer’s benefit plan can prohibit the payment of attorney fees. It can absolutely control which physician may provide treatment. It need not provide for an independent fact-finder to resolve disputes.

Statute of Limitations Issues

Alas, there was one sticky problem for opt out employers: Senate Bill 1062 required the statute of limitations governing opt out plans to be the same as that spelled out under the state-run system. For employers remaining within the system, an injured employee generally has one year to file his or her claim [see 85A Okl. Stat. § 69]. Opt out employers ignored that statutory requirement and instead submitted plans to the Commissioner of Insurance containing provisions barring any claim where notice is not given to the employer within 24 hours. Dillard’s, a large retailer, submitted a plan with an even stricter provision, requiring notice of injury by the end of the shift. The Commissioner’s office dutifully approved the plans anyway.

Napoleon’s forces tied up the loose end represented by the SB 1062 statute of limitations provision this summer. The Oklahoma legislature passed—and the governor signed—Senate Bill 767. The charade of equality was fully jettisoned by a provision allowing Oklahoma opt out employers to set their own statute of limitations for work-related injuries. Like the situation in Animal Farm, now all Oklahoma employees are equal; it’s just that some are more equal than others.

It’s All About Assuring the Injured Employee Has Early Care—Yeah, Right

Opt out proponents argue, inter alia, that the short notice provisions contained in all the opt out plans approved so far is about assuring early, competent medical care for injured workers. Yeah, right. Tell that to Rachel Jenkins, a 32-year-old single mother of four, who was injured while working a double shift at a disabled care center in Oklahoma City owned by ResCare, Inc., on March 31, 2015. Her supervisor witnessed the incident that caused her injury. Under most state workers’ compensation acts, that alone would amount to notice to the employer. Not so, of course, under the ResCare opt out plan. Under the plan, the injured employee is required to call a toll-free number within 24 hours of the claimed injury or lose the right to all benefits.

Jenkins missed the call-in deadline by three whole hours. Yes, Jenkins went to the emergency room on the day she was injured. Yes, she went to the company doctor the following day. So, yes, she received early and competent medical care. But she missed the call-in deadline and her claim was summarily denied. If the purpose of the short notice period is actually to get medical care to an injured employee as quickly as possible, that purpose was met in Ms. Jenkins’ case. It’s clear that the real purpose of the 24-hour notice requirement is something altogether different, of course: It’s to allow the ResCare plan administrator to deny as many claims as possible.

It’s All About Choice—Unless, of Course, You’re an Employee

Opt out proponents also argue that it’s all about choice. They say that giving an employer a choice is good; it fosters competition. There’s, of course, no room for choice when it comes to the employee, however. A ResCare employee has a completely different—and inferior—right to injury benefits than a similarly situated employee of a nearby “non-opt out” nursing facility that remains inside Oklahoma’s state-run workers’ compensation system. The choice was made by ResCare, not its employees.

A Snowball’s Chance

For the time being, at least, Napoleon has had his way in Oklahoma. He’s run Snowball off the farm. All employees are equal; it’s just that some are more equal than others. Napoleon isn’t satisfied, of course, with Oklahoma; he’s already testing the waters in Tennessee and South Carolina. Rumor has it that a bill will be introduced in North Carolina in the 2016 legislative session as well. What chance does a Snowball have in those and other nearby states? We’ll soon see. We don’t have long to wait.

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2 Responses to Orwellian Equality: Oklahoma’s Controversial Workers’ Comp Opt Out Legislation

  1. gregg dourgarian says:

    Literary analogy fail! Quite a distortion on who is Snowball and who is Napoleon. The state (Napoleon) created this regulatory capture that enriches bureaucrats and big insurance companies and punishes workers and employers.

    Opt out is a way to fight that and get the money back to the workers via higher pay.

    • Greg, many thanks for the comment. I could be wrong, of course, but there doesn’t appear to be any empirical data to support the contention that opt out is resulting in higher pay for Oklahoma’s employees. If Oklahoma pays its bureaucrats so much that they’re rich, a more direct piece of legislation–one that would reduce salaries–would seem to be more appropriate than an indirect approach like opt out. I can’t speak for claimant, Rachel Jenkins, of course, but I don’t think she’d say the opt out scenario is in her best interests. Provisions that bar the employee’s claim for reporting the injury 27 hours after the fact, instead of within 24 hours, seem pretty punitive, particularly when the incident was witnessed by a supervisor. The “standard” system would not have been so punitive.

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