Would administrative workers' comp system save Oklahoma money?
It will be a case of paying money to save money for the state of Oklahoma if it switches to an administrative workers' compensation system, said Mike Seney of The State Chamber of Oklahoma.
Oklahoma will be paying money to save money if it switches to an administrative workers' compensation system. And the projected savings will far outstrip the extra costs, said Mike Seney, of The State Chamber of Oklahoma.
Workers' compensation attorney Bob Burke disagrees. He said assumptions being made by backers of workers' compensation legislation are far from certain, and the proposed law may violate the state constitution.
Their comments follow a letter written by the Workers' Compensation Court administrator that indicated switching to an administrative system would require operating a dual workers' compensation system for an indeterminate number of years.
Court Administrator Michael Clingman estimated operating a dual system would cost an extra $20 million over the first three years, or about $6.7 million a year.
Seney said that may be true but contends the state can expect to save far more than that in reduced workers' compensation costs for its employees.
Seney pointed to a National Council on Compensation Insurance analysis of pending Oklahoma workers' compensation legislation that said switching to an administrative system as described in Senate Bill 1062 would save state employers an estimated 14.2 percent, or $138 million, a year. The study said additional long-term savings, that have not yet been quantified, could save an additional 5 percent ($48 million) or more.
“What people tend to forget is state and local governments are huge employers,” Seney said.
Oklahoma has about 275,000 state and local government employees and 1.5 million total employees, he said.