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The constitutionality of Oklahoma’s workers’ compensation alternative, the Oklahoma Option, which was established in the 2013 overhaul of the state’s workers’ comp system, is currently being challenged in an appeal to the state Supreme Court.

The Oklahoma Employee Injury Benefit Act was created by Senate Bill 1062 in 2013 as an alternative system that employers may use to satisfy state requirements to provide benefits to injured workers. That bill also established the Oklahoma Workers’ Compensation Commission to replace the former Oklahoma Workers’ Compensation Court.

Ruling in Vasquez v. Dillards in February, the Oklahoma Workers’ Compensation Commission found the Oklahoma Employee Injury Benefit Act to be unconstitutional and “not enforceable.”

The Oklahoma Option allows qualified employers to opt-out of the Oklahoma workers’ comp system by establishing an Employee Benefit Plan (Plan) under the provisions of the federal Employee Retirement lncome Security Act (ERISA). Benefits plans are supposed to be equal to or better than those provided under the workers’ comp system.

The case under Supreme Court review involves the denial of a work injury claim filed by Dillards Inc. employee Jonnie Yvonne Vasquez, who injured her shoulder and neck while lifting shoe boxes at her workplace. Dillards denied her claim saying Vasquez’s injury was “a pre-existing condition and not an ‘injury’ as defined by the Plan,” according to the commission’s order.

In its February order, the OWCC said “the benefit plans permitted to be used to opt-out establish a dual system under which injured workers are not treated equally.” The commissioners recognized in their ruling that the decision would be appealed to the state’s highest court.

It’s a case that has created an odd situation in which insurance company trade groups and plaintiffs’ lawyers are on the same side of an issue. While acknowledging that improvements to the workers’ comp system are in order, opt-out opponents believe the traditional workers’ comp status quo should be preserved.

On the other side are those that see an option whereby companies may choose to establish their own plans for assisting workers who have been injured on the job to be a viable alternative, one which can both lower employer costs and result in positive outcomes for the employees.

, says however that the facts of the case are being overlooked by those seeking to overturn the opt-out portion of Oklahoma’s workers’ compensation act.

A strong supporter of both the workers’ comp nonsubscriber system in Texas and the Oklahoma Option, Minick says in the Vasquez ruling the OWCC never actually found that the employee at the center of the case was harmed by her employer’s alternative workers’ comp plan, nor did they find any wrong doing by her employer.

Dillards’ plan, he says, “paid substantial benefits while Ms. Vasquez’s claim was being reviewed.”

The claim was denied after it was determined that the condition for which Vasquez made the workers’ comp claim was found by her employer to be pre-existing.

Minick says Oklahoma Option opponents are over-reaching in their challenge to Oklahoma’s 2013 legislative reforms.

In an amicus curiae brief submitted to the state Supreme Court, the Workers’ Injury Law and Advocacy Group (WILG) said opt-out plans, which are developed using ERISA guidelines, “are a wholly inadequate substitute for traditional workers’ compensation plans.”

One reason for that is the limitation on the right to sue under ERISA-based plans. But even if the right to sue is included in the ERISA plan, such plans are still inadequate and “will inevitably shift the burden of liability from employers for employees’ injuries to state and federal programs,” the WILG brief states.

Similarly, a brief jointly filed by three property/casualty insurer groups — the American Å˽ðÁ«´«Ã½Ó³»­ Association (AIA), the Property/Casualty Insurers Association of America (PCI) and the National Association of Mutual Å˽ðÁ«´«Ã½Ó³»­ Companies (NAMIC) — states that Oklahoma’s opt-out alternative “constitutes a prohibited special law that deprives injured workers of equal protection under the law.”

In addition, the opt-out provision “does not require the ‘qualified employer’ to cover all of the injuries and occupational diseases covered by” traditional workers’ comp, and it enables the employer to “terminate benefits before the injured worker has completed medical care or returned to work,” the brief states. The losses that are not covered by the plan, will be shifted to the employee and, in many cases, to taxpayers via state and federal programs like Social Security Disability, Medicaid and Medicare, the insurer groups’ brief asserts.

According to Minick, those groups that oppose workers’ comp alternatives are ignoring data that he says illustrate the positive outcomes opt-out plans have achieved for both employees and employers.

“Changing the status quo in workers’ compensation is difficult. There’s a lot of resistance to the ideas of greater employer and employee, and medical provider accountability, and competition,” Minick says.

Note: Listen to a podcast interview with Bill Minick.

Related:

• Oklahoma’s Workers’ Comp Opt-Out Act Ruled Unconstitutional
• Another Provision of Oklahoma Workers’ Comp Law Struck Down
• Oklahoma Workers’ Comp Overhaul Takes Another Hit
• Oklahoma Governor Signs Workers’ Compensation Overhaul
• How Well Do Oklahoma Opt-Out Plans Serve Injured Workers?
• Oklahoma Workers’ Comp Overhaul Now in Effect
• Group Aims to Create Alternatives to Workers’ Comp State-by-State
• ProPublica, NPR: Inside Corporate America’s Campaign to Ditch Workers’ Comp

Topics Workers' Compensation Oklahoma