Q&A with Hale Johnston
‘Oklahoma Option' seeks to lower rate for workers' compensation
Q: is the biggest thing about the state's upcoming change to an administrative workers' compensation system that will change for small business owners because of the switch?
A: Workers' compensation insurance covers employers for their statutory and legal obligations for employee expenses that are a direct result of on-the-job injuries or illness. While benefits differ within and among the states, they typically include weekly payments in place of wages and reimbursement for medical and rehabilitation expenses.
Workers' compensation has been a hot topic in Oklahoma since the state Legislature passed a reform initiative, known as “The Oklahoma Option,” in April 2013. The reforms, which take effect in February of 2014, are intended to give businesses more choices and reduce costs by modifying how litigation and medical treatments are handled for injured workers. For instance, employees can no longer pursue a negligence action through the civil courts. Instead, all litigation has to go through the normal workers' compensation administrative process. Businesses now even have the option to opt out of workers' compensation insurance entirely, though they still have the responsibility to protect their employees and bear the costs related to workplace injuries and illnesses.
Strategic risk management and workplace safety play crucial roles in protecting a small business' most important assets — its employees. They can also result in real bottom-line operational and cost benefits. Workers' compensation insurance helps small businesses better manage their risk and effectively manage costs, which is just smart business. By being proactive and taking common sense measures to improve workplace safety, small businesses in Oklahoma can greatly reduce their risk of workplace injury-related costs.
Q: Will workers' compensation insurance rates go down in Oklahoma because of the new law?
A: The Oklahoma Option puts in place some measures designed to control cost drivers in the workers' compensation system. The intent is for costs to go down, but it remains to be seen what will actually happen.
Q: What are some other things that small businesses can do to bring down the cost of workers' compensation insurance?
A: There are basic, day-to-day operational measures that small business owners can take to mitigate the risk of workplace injury and related costs. Establishing policies, procedures and rules surrounding workplace safety provides employees with the necessary tools to do their jobs safely. Enforcing safety rules through the use of workplace audits, safety meetings and annual training are proven ways to reduce the risk of workplace injuries that can ultimately cost a business thousands of dollars.
Brianna Bailey, Business Writer