Opt-Out A Boon to Employers, Not So Injured Workers

Employers opting out of workers’ comp in Texas are reducing costs, but more study is needed on how non-subscription affects injured workers, according to Stephanie Goldberg of Business Insurance.

Ms. Goldberg reports that a study released last week by Alison D. Morantz of Stanford Law School, found that the overall cost per claim is about 49% lower in the non-subscription environment, which is largely due to declines in medical and wage replacement costs.

The study also found, she writes, that despite no significant decline in frequency of claims, that more serious claims involving replacement of lost wages are about 33% less common among non-subscribing employers.

For the study, Ms. Goldberg adds, Ms. Morantz recruited 15 large multistate companies that operate homogenous facilities nationwide, and compared outcomes in traditional workers’ comp versus opt-out for each company from 1998 to 2010.

The study found also that the frequency of nontraumatic injuries declined about 47% with opt-out coverage.

It could be that nonsubscribers are better at screening out nontraumatic claims under one of the many exclusions that private plans typically contain,” said Ms. Morantz.

Meanwhile, Ms. Goldberg wrote, a nontraumatic injury that is covered may be denied if it is not reported by the end of the employee’s shift, or within 24 hours.

Thirteen of the fifteen employers in the study have “good cause” provisions that allow a claims administrator to determine if there was a good reason the claim was made late.

Finally, Ms. Morantz said that, “the biggest unanswered question is how these plans affect the welfare of workers.

As I reported yesterday in two posts, “Texas State House Seeks to Change Rules for Workers’ Comp” and “Workers’ Comp Opt-Out Goes Under US Microscope“, there are a lot of unanswered questions surrounding the effect opt-out will have on the injured worker.

Those who support opt-out expansion really don’t care about injured workers; they care about saving money for employers (i.e., profits that go back to the investors or to the top executives). They are also diametrically opposed to giving workers any benefits, and would prefer that workers’ comp had never existed, along with unemployment insurance and health insurance.

Those who see through the smoke and mirrors of opt-out know what the world was like before workers’ comp laws, and they don’t want to go back to those days, and whether or not they really are concerned with the welfare of workers, or just say they do, I am afraid that they may not be able to stop this move on the part of opt-out proponents.

But federal oversight would be welcomed to prevent going back to the bad old days before Triangle, which happened 105 years ago tomorrow. Marty McFly went back to the future, these guys in opt-out want to go back to the past.

 

 

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