CHICAGO (Dec. 4, 2015) — An organization working to create workers' compensation opt-out programs in various states says it “welcomes” an upcoming investigation by the National Conference of Insurance Legislators (NCOIL) into alternative workers' comp systems.
NCOIL's Workers' Compensation Insurance Committee voted at its annual meeting last month to investigate opt-out programs, NCOIL said recently in a statement.
The decision was based on reports by National Public Radio and investigative journalism website ProPublica Inc. that criticized programs allowing employers to opt-out of state workers' comp systems and profiled workers who were unable to receive benefits under opt-out programs.
“Though NCOIL has taken no position on these unique programs, we'd be remiss if we didn't look at the issue further — especially since there's movement in other states to let employers opt out of state workers' compensation requirements,” North Dakota Sen. Jerry Klein said in the statement. Sen. Klein, a Republican, is chairman of NCOIL's workers' comp committee.
The Association for Responsible Alternatives to Workers' Compensation worked with legislators in Tennessee and South Carolina to draft workers comp opt-out legislation this year. Those bills are partly based on similar workers' comp programs in Texas, which has allowed employers to opt out of buying workers comp insurance for more than 100 years, and Oklahoma, which passed opt-out legislation in 2013.
In a statement to Business Insurance, the association said it “welcomes an opportunity to provide NCOIL with the benefit of its experience with the workers' compensation option.… Experience shows an option results in improved employee outcomes and creates significant employer savings.”
Meanwhile, Tennessee legislators reportedly are gearing up to reintroduce workers' comp opt-out legislation in 2016 after a proposal earlier this year failed to move forward.
Tennessee state Sen. Mark Green and Rep. Jeremy Durham, both Republicans, in February introduced the Employee Injury Benefit Alternative, which would allow private employers to opt out of the state's workers' comp system if they provide alternative coverage for injured workers.
Despite amendments that included revisions to permanent partial and permanent total disability levels, critics maintained that the proposed benefits still weren't on par with what's available to injured workers under the state law. Ultimately, the Tennessee Advisory Council on Workers' Compensation decided not to recommend the legislation proposed this year.
Sen. Green reportedly told The Tennessean newspaper last week that a new opt-out bill will be ready by 2016. Neither he nor Rep. Durham could be reached immediately for comment.
This report appeared on the website of Business Insurance magazine, a Chicago-based sister publication of Tire Business.