Business owners' cries for workers' compensation reform are reverberating through the Oklahoma Legislature, with more than 30 bills filed that could radically change the way injured workers are treated.
“It is the most important issue for us this year,” said Mike Seney, senior vice president for policy analysis and strategic planning for The State Chamber of Oklahoma. “Let's recognize the system is not working and start over.”
Jimmy Curry, president of the AFL-CIO labor union in Oklahoma, agrees change is needed. However, he questions whether some of the changes proposed by businesses and lawmakers will fix the system's real problems.
“Safety has to be paramount,” Curry said. The best way to reduce workers' compensation costs is to decrease the number of on-the-job accidents, he said.
Determining what changes some lawmakers have in mind is difficult at this point. More than half of the bills filed to date are shell bills that do not yet contain substantive language.
However, some bills do spell out proposed changes, ranging from relatively minor tweaks to major overhauls of the system.
Some of the most radical changes are proposed by state Rep. Mark McCullough, R-Sapulpa, state Rep. Arthur Hulbert, R-Fort Gibson, state Sen. Josh Brecheen, R-Coalgate, and state Sen. Mark Allen, R-Spiro. They have introduced bills to replace the Oklahoma Workers' Compensation Court with an administrative system.
State Rep. Lewis Moore, R-Arcadia, has a far-reaching bill that would allow certain employers to opt out of the state's workers' compensation system and replace it with benefit plans of their own — as long as those plans meet certain standards.
Disincentive to work?
Seney said Oklahoma businesses are ready for such radical change.
A huge problem with the current system is that it can provide a disincentive for employees to want to get back to work, he said.
While off work, injured workers can receive 70 percent of their weekly salaries, up to 100 percent of the state's average weekly wage, and the money is tax-free, he said.
That's almost like having a paid vacation for lower-paid workers, he said.
And when people are ready to go back to work, workers' compensation judges often award permanent partial disability awards totaling tens of thousands of dollars, he said, comparing it to receiving a large bonus.
“We really don't need a lottery in Oklahoma. We have workers' comp,” Seney said. “It pays better. There's a better chance of winning, and now it's nontaxable.”
The Legislature has passed reform after reform over the years, but nothing seems to make much difference, he said.
“We think it's time to scrap the system and get into an administrative system and do it right,” he said.
Oklahoma employers pay nearly $1 billion a year in workers' compensation premiums and premium equivalents, he said. Seney believes businesses could save 10 to 15 percent of that amount by going to an administrative system and enacting other reforms.
Focus on safety
Curry questions whether an administrative system is the answer.
The root of the workers' compensation problem is workers getting hurt. Improving safety is the most basic way to address the problem, and Oklahoma has made strides in that area in recent years, he said.
Statistics back that up. The number of employer injury notice filings has dropped by more than half in the past 16 years, going from 100,363 in 1995 to 44,216 in 2011. The number of workers' compensation claim filings also has dropped substantially during that time, going from 25,817 to 13,906.
“The problem with the system now is the cost of each one of those cases has gone through the roof,” Curry said. As a consequence, employers haven't seen the cost savings that people would expect.