Tag Archives: Opt-Out

ARAWC Strikes Again: Opt-out Rolls On

“Just when I thought I was out… they pull me back in.”

Michael Corleone, Godfather, Part III

Source: https://www.pinterest.com/Mamzeltt/famous-movie-quotes/

When Michael confronts Connie and Neri in the kitchen of his townhouse, he warns them to never give an order to kill someone again (in this case, it was Joey Zaza), and goes on to state that when he thought he had left the mob lifestyle, they pull him back.

Thus, is the case with opt-out, as I discussed in my last post on the subject.

Kristen Beckman, in today’s Business Insurance, reminds us that opt-out, like the Mob, is pulling us back into the conversation.

As I reported last time, a bill in Arkansas, Senate Bill 653, pending in that state’s legislature’s Insurance & Commerce Committee since the beginning of March, proposes an alternative to the state system.

Ms. Beckman quotes Fred C. Bosse (not Fred C. Dobbs), the southwest region vice president of the American Insurance Association (AIA), who said that the bill is an attempt to keep the workers comp opt-out conversation going.

Mr. Bosse said that the AIA takes these bills seriously (good for them) and engages legislators to dissuade progress of such legislation the AIA believes could create an unequal benefit system for employees. (They haven’t drunk the Kool-Aid either)

Arkansas’ bill is the only legislation currently under consideration, but a state Rep in Florida, Cord Byrd (there’s a name for you), a Republican (it figures) from Jacksonville Beach, promoted legislation last year, but never filed it.

South Carolina and Tennessee, where bills were previously introduced within the past two years has gone nowhere.

And once again ARAWC rears its ugly head. For those of you unfamiliar with ARAWC, or the Association for Responsible Alternatives to Workers’ Compensation, it is a right-wing lobbying and legislation writing group based in Reston, Virginia. (see several other posts on ARAWC on this blog)

A statement ARAWC sent to BI said that these bills are beginning to pop up organically to model benefits that companies have seen from Texas’ non-subscription model. (Organically? That’s like saying mushroom clouds organically popped up over Hiroshima and Nagasaki)

Here’s a laugh for you, straight from the ARAWC statement:

Outcomes and benefits for injured workers have improved, employers are more competitive when costs are contained and taxpayers are well served by market-driven solutions,” They further said, “We recognize that each state is different and that the discussions at the state level will involve varied opinions.”

Of course, we cannot really know if injured workers are benefitting, or just being denied their rights, and it seems that opt-out is only to help employers and taxpayers get out of their responsibility to those who sustain serious injuries while employed.

In another post, the notion that Texas’ system could serve as a model for other states was outlined in a report by the Texas Public Policy Foundation (don’t you just love the names of these reactionary groups?)

Bill Minick, president of PartnerSource, praised the report, according to Ms. Beckman, and said that competition has driven down insurance premium rates and improved benefits for Texas workers. (That’s what he says, but is any of it true, I wonder? I doubt it.)

ARAWC has listed a laundry list of benefits they say responsible alternative comp laws could provide:

  • Better wage replacement
  • Reduced overall employer costs
  • Faster return to work
  • Fewer claims disputes (yeah, because they would be denied)
  • Faster claim payouts
  • Faster closure (well, when you deny claims, they can be closed faster, duh!)

It is good to know that the AIA is critical of the report, and that in their opinion, it is unworkable to allow employers to adopt a separate, but unequal system of employee benefits.

And as we have seen with the defeat of the AHCA, leaving a government-sponsored program up to market-driven forces is a recipe for disaster that should not be repeated in workers’ comp, no matter what flavor the Kool-Aid comes in.

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Arkansas Next in Line to Drink the Kool-Aid on Opt-Out

As follow up to my post yesterday about Texas’ opt-out system and other states, here is a link to another article in Business Insurance that says neighboring state, Arkansas is considering a bill to allow their employers to opt-out of the state system.

You would think given Oklahoma’s experience next door, that Arkansas would not follow suit and pass such a bill, but you would be wrong.

They are first in line to drink the kool-aid. Or is is poison?

For injured workers sake in the Clinton home state, it would be like drinking poison.

Opt-out: The Thing That Will Not Die

An article in today’s Business Insurance magazine, Texas comp opt-out model could spread to other states: Report, said that the Texas Public Policy Foundation, a free enterprise research and advocacy group, released a report that analyzed the Texas nonsubscription system, and said the other states may try to emulate the model.

Folks, we’ve been down this road before as I wrote last August.

The report is called, “The Lone Star Model for Helping Injured Workers,” [really?] says that the competition between the state’s system and the nonsubscription system has led to improved claims handling, cost control and better return-to-work rates.

I have no way of knowing if this is true, but if it is, then how come no other state is following suit? Could it be that it doesn’t do what they say it does?

The report also says that 78% of Texas employers, who represent 82% of the state’s private-sector employers are covered by the state system, and five percent of employees are not covered by workers’ comp or an alternative system. This was reported in my earlier posts.

In previous posts, I have said that there are unanswered questions as to how well injured workers would be treated, and I have also said that opt-out is just a way to tear down the entire workers’ compensation system nationwide.

Even the late David De Paolo wrote that the comp industry should not drink the kool-aid on opt-out.

And given the fact that the Oklahoma law was declared unconstitutional, and the other states that were considering it have pulled the legislation back, means that opt-out is not what its defenders claim it to be.

ARAWC, the organization behind much of the legislation has not been successful in getting other states to follow Texas’ lead.

Why is that?

It is because no one wants to go back to the 19th century where workers were without any protections and had to go to court to get any sort of benefits should they be injured on the job.

The Oklahoma law proves that it just does not have the welfare of the injured worker in its best interest, and that opt-out is only a means by which an employer can get away without any liability or responsibility for taking care of the worker.

Taking back the country before the Socialists took over is a powerful, right-wing talking point and meme, but no way to move a technologically advanced country forward into the 21st century.

 

And Then There Was One

In what may well be one of the last posts written about opt-out for workers’ comp, Joe Paduda today reports that Oklahoma is opting out of opt-out.

That leaves the Lone Star State as the only state that allows employers to “opt out” of the statutory system, but as Joe indicates, most Texas employers opt in.

There is a strange relationship in Texas between opting out and insurance premiums that runs counter to what many might think natural otherwise. Large employers opt out when the rates are low, and small employers opt out when the rates are high, a point I highlighted in the post, “Large Employers in Texas Opting Out of Work Comp.”

So as rates are decreasing in Oklahoma, according to Joe, employers there are opting out of opting out.

Maybe at last we are seeing the end of this extremist, turn-the-clock-back to the 19th century way of providing workers’ compensation to injured workers.

And amen to that.

 

Opt-Out: Here We Go Again

Once again, we have to look at the issue of opt-out. This time in the land of Lincoln.

“Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration.”

Abraham Lincoln

Yet, it seems that Capital is still trying to stick it to Labor by dismantling the workers’ comp state systems.

Stephanie Goldberg, writing yesterday in Business Insurance, reported that the Illinois Policy Institute, an organization the Republican Governor, Bruce Rauner, has previously donated to, issued a report last month calling for “updates” [Emphasis added] to the state’s more than 100-year-old system.

The author of the report and the director of the institute’s regulatory reform, Mark Adams, said in an phone interview that, “the system that is in place isn’t serving workers effectively.”

He acknowledged that it is difficult to reform the system because there are so many stakeholders (a point made by myself and others).

Yet, the report goes on to say that, “the most effective way for government to protect workers is not by a restrictive one-size-fits-all system, by by creating broad rules of the game that give workers more freedom to contract with employers for a deal that is better suited to their own situation.”

On the one hand, what the report is stating makes sense, and seems to agree with the idea of opening up the system to new ways of providing care to injured workers, but if we look deeper at the alleged success of opt-out in Texas, Oklahoma, and the failure to get it passed in Tennessee and South Carolina, we find that the proponents of opt-out have not been very up front and honest on the subject.

What they really want is to blow up the entire workers’ comp system nationwide, and take us back to before Triangle, a point they seem to be making quite successfully in some quarters of the work comp industry because of the apolitical and ahistorical atmosphere in which this issue is often discussed.

We recently lost one brave soul who fought the temptation to drink the kool-aid on opt-out, and we cannot let his memory pass without remembering that he was not fully convinced that opt-out had proved itself.

In my last post, I mentioned what happens to closed systems if they do not change. With opt-out, we would not be seeing an opening of the system that still offers protections to injured workers, albeit with more options and more flexibility, but rather a complete and utter destruction of the entire system, which is what ARAWC and the Illinois Policy Institute wants, so that the employer is the one who benefits, not the employee.

Mark Adams stated that the system they have looks like it deals with the 19th Century, and not with telecommuters, or people who balance caring for a child, an elderly relative, and work responsibilities. True, but going back to the 19th Century when workers had to sue for benefits, if they were lucky to get to court, is not the answer.

One reason why opt-out has not been successful outside of Texas and Oklahoma, is as Stephanie Goldberg, says, the potential for constitutional challenges to opt-out laws could give pause to states considering legislation, as what happened in February when the Oklahoma Workers’ Compensation Commission ruled that provisions of the state’s Employee Injury Benefit Act deprive workers of equal protection and access to the courts, and to unfairly allow employers to define “injury.” The Supreme Court in Oklahoma is reviewing the case.

One wonders what the old railsplitter would think about the idea to deprive Labor of its rights to equal protection and access to courts, and to benefits they deserve when injured on the job. Lincoln would be horrified to learn that Capital has become superior to Labor.

Deaf, Dumb and Blind

It’s time once again for a rant. This rant is courtesy of my fellow blogger, Joe Paduda, who wrote an article today that criticizes members of the workers’ comp industry for not publicizing the positive things they do, but complain about all the negative press they have been getting.

As Joe writes, “Yep, it’s your fault that the popular press smacks you around, citing a few examples of alleged insurer screw-ups as proof that you’re all a bunch of cold-hearted, nasty, lazy incompetents motivated only by profit.

Joe was referring to reports from ProPublica, NPR, plaintiff lawyers, muckraking journalists and bloggers (including yours truly, as well as two women I have previously written about, and who are injured workers themselves), and calls for the industry to stop their bitching.

Most industry professionals may not realize that workers’ comp came into existence due to the writing of early twentieth century muckrakers as Upton Sinclair (The Jungle), Ida Tarbell, Lincoln Steffens, and many others.

He takes them to task for not publishing a case of the month, sending out a press release honoring an employee for going above-and-beyond in helping out an injured worker.

Joe says it is their fault because the reasons they don’t promote their good works are short-sighted, ignorant, and indefensible; in short, you are deaf, dumb and blind to reality.

From the day Edward Lloyd opened his coffee house in London in the 17th century, the insurance industry, and specifically, the workers’ comp industry has been dominated by Lloyd’s fellow countrymen and co-religionists.

The same holds true here in the US, but American pluralism (of a kind) has allowed some minorities to make it in the industry, but it is still mostly a white male, majority religion club (certain exceptions such as Saul Steinberg and Maurice Greenberg notwithstanding).

I know people in my family and in our extended social circle who have worked for insurance companies, and the highest level they have attained has been below that of the top executives. My first job in workers’ comp was with a company whose executives were not members of that club, but my boss was, and that was a reason some of us claims people were mistreated by him. Sheer resentment that he was not a member of the tribe and thus the board of directors. Let’s not pretend it does not exist. Why do you think some companies are called, “white shoe” companies?

Here is my take on this:

  1. You are resistant to change unless the change comes slowly, and from sources you trust and can control or dominate.
  2. As evidenced by Joe’s writing, you are unwilling to accept criticism from anyone who is not a member of the club or is from the lower ranks, or even someone who is on the outside looking in, as I am.
  3. You refuse to offer those with a passion for making workers’ comp better and opportunity to do so, and have laid off the best, brightest and hardest working people to save money on employee benefits, to cut payroll, costs, or because everyone else is laying people off, so why should you be any different. One of my LinkedIn connects writes a lot about millennials going into insurance, and many of you have complained online that you can’t find talented people. That’s because they are out looking for work.
  4. You refuse to accept any new idea, no matter who gives it, no matter what it is, and even have the nerve to criticize the idea and the person who promotes it. You continue to do the same things over and over again, and expect different results.
  5. You have elevated the laws, regulations, rules and statutes to the level of sacrosanctity, and that has frozen the industry in time, if not in place.
  6. Not one of my LinkedIn connections in the industry or in the insurance and risk management arena, who are hiring managers or executives have ever complimented me personally, save Joe, on my knowledge, my writing, or my passion for improving workers’ compensation. Crickets…
  7. You must dump the adversarial attitude pervasive among carriers, TPA’s, service providers, physicians, and employers. Not all injured workers are crooks. Treat them accordingly, and help those who really need help. Get emotional when you hear a sad story and work to fix it.
  8. STOP USING MEDICAL PROVIDERS WHO DELIBERATELY INJURE WORKERS, BOTH MEDICALLY AND EMOTIONALLY BY LYING TO THEM, DENYING THEM TREATMENT, OR JUST BEING GREEDY. Punish them by refusing to pay them or turning them into the legal authorities.
  9. Lastly, listen to the outsiders, even though they don’t have a job title, or are publishing anecdotal evidence of how bad some workers have been treated. Resist the snake-oil salesmen of opt-out like ARAWC and ALEC, whose agenda is both political and economic. They believe in an economy much like that when Edward Lloyd opened the coffee house. Ever wonder why Texas, and now Oklahoma are the only two states with opt-out? Because they are both states whose leaders in business and politics believe in laissez-faire, free market (free to the capitalist) capitalism. Don’t believe me? Here’s what Dwight Eisenhower said to his brother in a letter in 1954:

“Should any political party attempt to abolish social security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear of that party again in our political history. There is a tiny splinter group, of course, that believes you can do these things. Among them are H. L. Hunt (you possibly know his background), a few other Texas oil millionaires, and an occasional politician or business man from other areas. Their number is negligible and they are stupid.”

The Koch Brothers are just like the Hunts were back then, so be careful about opt-out expansion. It is a ploy to abolish the progressive reforms the muckrakers helped to create.

That’s all I have to say. It’s up to you to change course and make things better, but know this, we are not your enemies. We want to help, and I want to help you now.  Don’t be deaf, dumb an blind to us.


I am willing to work with any broker, carrier, or employer interested in saving money on expensive surgeries, and to provide the best care for their injured workers or their client’s employees.

Ask me any questions you may have on how to save money on expensive surgeries under workers’ comp.

I am also looking for a partner who shares my vision of global health care for injured workers.

I am also willing to work with any health care provider, medical tourism facilitator or facility to help you take advantage of a market segment treating workers injured on the job. Workers’ compensation is going through dramatic changes, and may one day be folded into general health care. Injured workers needing surgery for compensable injuries will need to seek alternatives that provide quality medical care at lower cost to their employers. Caribbean and Latin America region preferred.

Call me for more information, next steps, or connection strategies at (561) 738-0458 or (561) 603-1685, cell. Email me at: richard_krasner@hotmail.com.

Will accept invitations to speak or attend conferences.

Connect with me on LinkedIn, check out my website, FutureComp Consulting, and follow my blog at: richardkrasner.wordpress.com.

Transforming Workers’ Comp Blog is now viewed all over the world in over 250 countries and political entities. I have published nearly 300 articles, many of them re-published in newsletters and other blogs.

Share this article, or leave a comment below.

Where No One Has Gone Before: Or Will Captain Kirk Save Work Comp?

Tom Lynch, of LynchRyan published an excellent piece today about the bumpy ride workers’ comp has had since 1972, when a commission established by Richard Nixon made 19 recommendations for the improvement and uniformity of state workers’ comp standards.

As the Chairman of the Commission, John Burton suggested, “if we continue to advance at this rate, the 19 essential recommendations will be law throughout the land sometime in the 23rd century.”

“Hailing frequencies, open Captain.”

Tom is not the only one who wrote recently about the vested interests holding back progress and change. David De Paolo last week said the same when he wrote,

“Insurance companies are as much a vendor in either scenario as physicians, bill review companies, utilization review companies, attorneys, vocational counselors, etc. Each and every single one makes a buck off work comp, and each and every one has an interest in maintaining the status quo.”

Do we really have to wait until warp engines and transporters carry us off to far distant planets to have meaningful and substantial reform of workers’ comp that benefits the injured worker and minimizes the abuse by vested interests?

Or do we continue to illogically believe that nothing can change, and that new ideas are stupid and ridiculous and a non-starter? Or do we ignore those in the industry who blog about workers’ comp, but are impeding change by denying the credibility of the individuals presenting new ideas, or the ideas themselves?

These 19 recommendations should be looked at again and implemented, along any other ideas, outside of opt-out to bring injured workers better and less expensive medical care. To do otherwise is illogical.


I am willing to work with any broker, carrier, or employer interested in saving money on expensive surgeries, and to provide the best care for their injured workers or their client’s employees.

Ask me any questions you may have on how to save money on expensive surgeries under workers’ comp.

I am also looking for a partner who shares my vision of global health care for injured workers.

I am also willing to work with any health care provider, medical tourism facilitator or facility to help you take advantage of a market segment treating workers injured on the job. Workers’ compensation is going through dramatic changes, and may one day be folded into general health care. Injured workers needing surgery for compensable injuries will need to seek alternatives that provide quality medical care at lower cost to their employers. Caribbean and Latin America region preferred.

Call me for more information, next steps, or connection strategies at (561) 738-0458 or (561) 603-1685, cell. Email me at: richard_krasner@hotmail.com.

Will accept invitations to speak or attend conferences.

Connect with me on LinkedIn, check out my website, FutureComp Consulting, and follow my blog at: richardkrasner.wordpress.com.

Transforming Workers’ Comp Blog is now viewed all over the world in over 250 countries and political entities. I have published nearly 300 articles, many of them re-published in newsletters and other blogs.

Share this article, or leave a comment below.