Switching from a workers' compensation court system to an administrative system in Oklahoma would about double the state's annual operating cost — at least initially, says Michael Clingman, court administrator.
The extra cost is because workers are entitled to have their claims decided based on the system in place at the time of injury, thus requiring the state to operate a dual system for many years, he indicated.
“It seems likely that the three-year cost of dual systems would run approximately $41 million, or roughly $20 million more than the current system for the first three years,” Clingman wrote in a letter to the chairman of the Advisory Council on Workers' Compensation Reform.
Clingman cautioned that accurate cost projections are impossible without knowing specifics about how an administrative system would be set up. For example, it would cost a lot more to conduct hearings at locations across the state than at one or two central locations, he said.
The Oklahoma Legislature is considering a number of proposals to switch from a workers' compensation court system to an administrative system. Many business groups have been pushing for such a change, contending it would reduce the cost of their workers' compensation insurance premiums.
But while the cost to businesses might go down, the cost to the state would go up for several years.
It cost $6.35 million to administer the state's Workers' Compensation Court system for the fiscal year that ended June 30, 2012. The current fiscal year's operating budget is $6.6 million.
Clingman estimated it could cost $15 million the first full year a dual system is in place, $13.5 million the second year and $13 million the third year.
Costs would gradually decline as fewer cases are decided under the old system, he said.
“Overlap of the systems would be for an indeterminate period of time,” Clingman stated.
Some old claims would remain in the judicial system for the life of the worker or the beneficiary of the deceased worker, he said.