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Workers’ Compensation Opt Out Systems — A Return To The Jungle

Blackwell Law Firm: Helping Injured Alabama WorkersOur current workers’ compensation system is unfair and provides inadequate benefits to injured workers. Yet, it’s much better than the newest proposal pushed by corporate lobbyists – an opt out system.

Workers’ compensation protections are under constant threat from corporate lobbyists. In Alabama, lobbyists have regularly pushed legislative proposals to cut-off medical and disability benefits after arbitrary periods of time. And, insurance interests have worked overtime to prevent the legislature from raising a cap placed on partial disability benefits decades ago.

One new threat is the “opt out” system enacted in Texas and Oklahoma. In that system, large companies can basically opt out of a state workers’ compensation system and write their own plans. In other words, employers can write their own rules. In practice, opt out systems allow arbitrary plans that do not value injured workers.

An opt out system is a return to the working wasteland of Upton Sinclair’s The Jungle where people are expendable. Like a line from the novel, workers are given little value:

They had got the best out of him – they had worn him out, with their speeding-up and their carelessness, and now they had thrown him away.

This is where an opt out system will lead us. The authors of this system are now lobbying states beyond Texas and Oklahoma. Hopefully, we will never allow this system in Alabama. ProPublica explored the impact of opt out plans on working men and women suffering from work-related accidents and injuries. The real life stories detailed by ProPublica paint a disturbing picture.

What benefit changes can injured workers expect if employers write their own plans? Here are a few examples of harmful plan limits created by companies writing their own plans:

  1. Exclusions that eliminate specific injuries from coverage. For example, a large trucking company could write its plan to exclude injuries during the operation of a truck. Such an exclusion would leave workers without protection for the primary job-related accident or injury of that occupation.
  2. Rules that require specific and immediate notice of accidents and injuries. Many times, workers suffer an accident but don’t immediately realize the seriousness of the injury. This happens all the time in work-related accidents. And, most workers don’t want to file claims for every bump or bruise. Alabama law requires notice within a very short time but does not require immediate notice. Narrow notice rules could be used to bar claims where workers wait even a few hours. Arbitrary notice rules could also require multiple forms or other technicalities used unjustly to bar claims.
  3. Doctors that are hand-picked by employers and biased. Alabama law already allows the employer (through its workers’ comp insurer) to pick the doctor. However, the injured worker does have some limited ability to change physicians. And, the injured worker can often seek court help when treatment is needed. In an opt out system, employer plans could remove all worker rights over medical care.
  4. Decision-makers that are partial to the employer. In Alabama, trial courts decide disputed claims. That means real courts with real judges decide disputed injury and disability claims. Under an unlimited opt out system, an employer could write a plan that allows it to hand-pick the people deciding claims.
  5. Time limits that eliminate medical care. Unless state law provides protections, an opt out plan could expressly terminate medical care after some arbitrary period of time. An arbitrary cut-off could leave many injured workers without the care needed to heal and return to gainful employment.

Compensation for work-related accidents is important for working families and the communities in which they live. Our benefit system is under constant attack by large employers and insurance carriers who wish to shift the costs of injuries from themselves to impacted families and the government. It is important that we protect working families by preventing the expansion of an opt out system into Alabama.