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Employers Trying to Opt Out of Workers' Comp Coverage

Posted by A. Lou Benassi | Dec 31, 2015 | 0 Comments

Workers' compensation laws in Illinois and across the country are meant to protect employees who get injured on the job, to ensure their medical care is covered, and they receive benefits to support them and their families while they are unable to work. Workers' compensation laws also protect employers from costly civil lawsuits. However, not all employers are fans of this no-fault system. Some states are allowing employers to opt out of state-mandated compensation laws, leaving employees holding the bag.

Both Oklahoma and Texas now have laws that allow employers to create their own injury benefit schemes, rather than subscribe to the standard workers' employment insurance plans that require employers to cover the cost of premiums. However, where workers' compensation insurance is intended to cover the vast majority of job-related injuries, these private plans can provide less coverage, decreased benefits and mandate treatment.

National Public Radio (NPR) and ProPublica reported the findings of their investigation, which indicated over 100 companies in the two states were opting out of workers' compensation, to replace them with their own privately developed plans. The report found “widespread differences in benefits among employers, and restrictions and requirements that make it easier for employees to be denied coverage.”

In one example highlighted by the news report, the employer of an employee in Texas who died on the job paid out a death benefit of $250,000. However, if the young man had been covered by the state workers' compensation program, his wife and infant daughter would have been paid as much as $1 million.

After a review of various employer plans in Texas and Oklahoma, reporters found that plans denied coverage for certain infections and provided for a generalized denial for sickness of disease. Taco Bell allowed for management to be allowed to attend doctor's appointments, and other companies required workers to report injuries by the end of their work shift, or risk denial of coverage.

Since NPR and ProPublica released their report, the National Conference of Insurance Legislators (NCOIL) has indicated they will look into claims that opt out programs are coming at the expense of employees. A number of members of the U.S. Congress have also asked the Department of Labor to look into workers' comp programs, as a result of the news story.

The Association for Responsible Alternatives to Workers' Compensation, which works with lawmakers to create state opt-out laws, does not appear concerned, indicating they welcome any investigation. This association was founded by Walmart, and other large employers, looking to save money, and reduced the bureaucracy involved with state-charged workers' compensation programs.

However, despite the probe, other states are trying to adopt similar laws, in an attempt to show themselves as more “business friendly.” Tennessee and South Carolina legislators have introduced similar laws to allow employers to develop alternative employee injury programs.

Here in Illinois, House Speaker Michael Madigan has not introduced a similar “opt out” workers' compensation program, but he has championed pro-business reforms, including unspecified changes to the current workers' compensation system to limit payouts.

If you were injured on the job and have been denied workers' compensation coverage, or if you suspect your employer is not providing the full coverage under the law, you should speak with an experienced attorney who understands Illinois workers' compensation cases. At Benassi & Benassi, we are committed to getting our clients the justice they deserve.

About the Author

A. Lou Benassi

A. Lou Benassi was born and raised in Taylor Springs, Illinois, a small mining and farming community located near Hillsboro, the county seat of Montgomery County, Illinois...


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