Opt-Out Plans Let Companies Work Without Workers' Comp State laws in both Oklahoma and Texas allow employers to develop their own workplace injury plans that generally cover fewer injuries, cut off benefits payments sooner and control access to doctors.
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Opt-Out Plans Let Companies Work Without Workers' Comp

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Opt-Out Plans Let Companies Work Without Workers' Comp

Opt-Out Plans Let Companies Work Without Workers' Comp

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Let's return to an issue we've been following very closely this year, workers' compensation. State regulated systems are supposed to pay medical bills and lost wages when workers are injured on the job. Earlier this year, NPR and ProPublica reported that dozens of states have either cut workers' comp benefits or made them more difficult to get. And here's what's new this morning. Employers in two states are dumping out of workers' comp completely and providing fewer benefits. That's what NPR and ProPublica found after reviewing dozens of employer injury plans that replaced workers' comp. Here's NPR's Howard Berkes.

HOWARD BERKES, BYLINE: Bill Minick says his Texas company, ParternerSource, has saved clients a billion dollars, money they didn't have to spend on workers' compensation. They avoided expensive treatment and litigation and delayed medical care by opting out of workers' comp.

BILL MINICK: We can take care of injured workers more effectively, get them back to their families and to their work as productive members of society, save incredible amounts of money that create new jobs. That's what we do.

BERKES: Some of Minick's clients pay more for lost wages in their own workplace injury plans. But NPR and ProPublica reviewed more than 100 of these opt-out plans. In Texas and Oklahoma, the two states that permit them, we found fewer benefits, tougher qualifying rules, even failures to comply with state law, regulators powerless to respond and workers suffering as a result.

In Oklahoma, 32-year-old Rachel Jenkins was injured at work in March. The single mother of four tried to protect a client from an attacker at a sheltered workshop for disabled adults.

RACHEL JENKINS: We went down to the ground, and that's when I heard my back crack. I had to put all my strength into this man, and that's when I hurt my shoulder.

BERKES: Jenkins worked for ResCare, one of 59 employers in Oklahoma who've opted out of workers' comp. They're supposed to provide the same forms of benefits, but NPR and ProPublica found major gaps. And Jenkins' experience is one example. If ResCare had workers' comp, she would've had 30 days to report her injury. But when Jenkins notified ResCare, she was told she was too late to qualify for benefits.

JENKINS: Because I didn't call the number within 24 hours. And I kept telling her, you know, I went to the emergency room. They put me on some powerful medicine, but I was two or three hours late from calling the number. She just kept repeating that over and over. She was like, I understand you got four kids, but there's nothing I can do.

BERKES: Bob Burke is Jenkins' attorney.

BOB BURKE: Everybody ought to report injuries quickly. But if they don't because a well-meaning employee thinks, oh, this is going to go away... Just giving the employer the right to deny all benefits - and no matter how serious the injury is - because it was not reported to a toll-free number within 24 hours, I believe is wrong.

BERKES: Almost all of Oklahoma's opt-out plans have reporting deadlines of 24 hours or less. And most are so similar because most were written by Bill Minick's PartnerSource. Minick says employers can make exceptions. And in fact, ResCare did that for Rachel Jenkins.

MINICK: Simply by voicing the concern and by having the claim reviewed informally, it was determined that that was not a good denial. It was not fair to the injured worker.

BERKES: Actually, co-workers complained to ResCare. And 16 days after the incident, the company agreed to provide benefits.

MINICK: And so the system worked.

BERKES: Well, not to Rachel Jenkins, given 16 days of pain while unable to afford treatment and worried about getting back to work.

JENKINS: I went through hell, a whole lot of pain where I was in tears. I was just thinking about, how am I going to take care of my kids?

BERKES: It's not just reporting deadlines. NPR and ProPublica found that most approved Oklahoma plans don't comply with state law. The law permits settlements that provide lump sum payments instead of years of benefits. These settlements must be voluntary, but they're mandatory in most of the plans. Employers decide when to settle and how much to pay. And if workers say no, they get no benefits. Attorney Bob Burke doesn't blame PartnerSource or ResCare for problems with Oklahoma's alternative to workers' comp.

BURKE: My fight is with the insurance commissioner of Oklahoma who approved that plan that clearly does not provide for the same benefits as required by statute.

BERKES: So why were these plans approved? Gordon Amini is general counsel of the State Insurance Department.

GORDON AMINI: It's my opinion that the Insurance Department does not have the statutory authority to disapprove or deny based on the content of the benefit plan.

BERKES: So when the Insurance Department wrote employers and PartnerSource about problems in their plans, it focused almost exclusively on punctuation, spelling, language and even formatting. That's what NPR and ProPublica found in hundreds of pages of agency emails. The agency didn't even notice mandatory settlements until we asked about them, according to Amini. Bill Minick of PartnerSource says the plans will be revised, which Amini says the agency expects.

MINICK: But it sounds like there's nobody who can make them do it.

AMINI: The statute does provide an appeal process for denial of benefits that are not paid.

MINICK: So it's up to the employees to enforce the validity of these plans.

AMINI: It's up to the employee to enforce the requirements in regard to benefits. You bet.

BERKES: Attorney Bob Burke is trying to get opt-out declared unconstitutional.

BURKE: In every other area of the law, some government agency maintains accountability. It's asinine to think that any accountability factor would be put on the backs of the victim.

BERKES: The harshest critics call opt-out a throwback to the industrial age before workers' compensation. But Oklahoma employers who opt out get to keep the biggest workers' comp benefit for them. They can't be sued for workplace accidents. As for Rachel Jenkins, she was eventually sent to an ear, nose and throat specialist for her back and shoulder injuries. He was a qualified doctor, says a ResCare spokeswoman, and he referred Jenkins to an orthopedic specialist, according to medical records which show ResCare rejected that referral.

JENKINS: I'm still in pain to this day. I can't sleep at night. I need to see a doctor to really see what's going on with me.

BERKES: And why aren't you doing that on your own?

JENKINS: Because I don't have the insurance, and I don't have the money.

BERKES: Opt-out is about a year old in Oklahoma. PartnerSource and state lawmakers promise adjustments, but there's no pause in spreading the opt-out gospel. A lobbying group is working in South Carolina and Tennessee. Bill Minick envisions a dozen opt-out states by the end of the decade. Howard Berkes, NPR News.

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