Filed Under:Markets, Commercial Lines

'Oklahoma Option' Redefines State's Workers' Comp

What’s the first thing to pop into your mind when thinking about Oklahoma? Is it the musical? Could it be that its pan shape?  The one thing that probably did not immediately pop into your mind is the state’s aggressive approach to redefining the system delivery for injured workers.

Prior to 2013, the Oklahoma workers’ compensation system could hardly be described as excellent, good or even fair. Some staggering statistics during the previous include that Oklahoma:

As a result of the less-than-stellar workers’ comp system grades, state officials recognized that improvements are needed to better care for injured workers and employers.

A new Oklahoma workers’ compensation system, as well as an alternative to Oklahoma workers’ comp, has been in the works for several years. In April 2013, SB 1062 passed legislative hurdles and was approved and then signed into law on May 6, 2013, with an effective implementation date of February 1, 2014.

SB 1062 has been incorporated into Title 85A of the Oklahoma statutes as the Administrative Workers’ Compensation Act and the Oklahoma Employee Injury Benefit Act. The law was not without challenges to its constitutionality, but courts later determined that it did not violate the constitutional ban on multiple subjects in a single bill.

SB1062 allows for employer choice between using the reformed workers’ compensation system or opting for an alternative system for all on-the-job injuries. By choosing the “Oklahoma Option,” the employer is not abandoning any responsibilities for the injured employees. The Option uses minimum workers’ compensation benefit levels, employee accountability and a free market approach to medical management—all key cost drivers in the workers’ compensation system.

Additionally, the Oklahoma Option benefit plan document may broaden some benefits from the workers’ compensation minimum benefit standards. The employer plan document forms the basis of the employer/employee partnership and reinforces their commitment to achieve better medical outcomes based on physician judgment and more immediate medical care. Both the employee and employer are working together in this process to ensure excellent results. An additional area where the law does duplicate workers’ compensation is “exclusive remedy.”

Please note that only employees in Oklahoma can participate in an Oklahoma Option injury benefit plan. If an employer has out-of-state operations, it will have to secure coverage for those out-of-state employees.

Get Started

The law has just become effective with only a few filed carriers approved to write business. Enlisting advisers that have experience in designing and brokering this coverage is strongly recommended in order to ensure that your company has a strong understanding of the program. Some critical components:

  1. Determine if your organization is eligible to elect the Oklahoma Option (net worth and/or employee count parameters may impact your ability to meet financial security requirements). Both public and private entities may be eligible.
  2. Secure your program’s insurance carrier quotes (certain insurance carriers follow your underlying benefit plan documents and others create their own policy limitations that may contradict your benefit plan document).
  3. Create a benefit plan and the related documents (enlisting an expert’s help).
  4. Submit all plan documents including a bound (or bindable) insurance quotation to the Oklahoma Insurance Department for approval, along with your $1,500 annual filing fee.
  5. Upon certification as a “Qualified Employer,” implement your claims and risk control programs.
  6. Communicate and educate your employees and integrate this into your new hire process.

The Oklahoma Option is a coordinated approach to improving the relationship between the employee and employer in the event of workplace injuries. It focuses on immediate and outcome-based medical care that facilitates maximum recovery and less overhead. This focus reduces the largest part of the medical only and lost-time claim costs currently within the workers’ compensation system. This system is attractive to both employers and employees and, hopefully, will eliminate the negative press that Oklahoma received in recent previous years.

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