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Oklahoma Creates Opt Out System For Workers Comp

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Oklahoma Creates Opt Out System

The new buzz on the Workers Comp blogs is Oklahoma’s decision to pass Opt Outlaws that will create a system similar to Texas. I am wondering if the process was thought through enough before implementation.

Graphic Of Blue Oklahoma Map Opt Out System
123RF

One of the better older articles on Opt-Outs is this article from 2005. I am sure that Oklahoma had thought through all of the advantages and disadvantages of an ERISA- type Workers Comp alternative system. Texas employers that “opt out” have these considerations:

  • Facing e unlimited liability, including possible punitive damages, if they lose lawsuits arising from workplace accidents.
  • In the event of a lawsuit, they forfeit their right to claim one of the three common law defenses

I had thought that only large organizations would see this option as a benefit due to the possibility of a lawsuit by the injured employee and the law of large numbers. However, Texas has allowed very small companies to opt out.

One of the Risk Management techniques that I have seen is for the employer to acquire an Occupational Accident (Occ-Acc) policy for their employees as a valid substitute for a Workers Comp policy. My company has handled Occ-Acc claims for years.

There are some shortcomings with an Occ-Acc policy for Workers Comp. The main concern is that in Texas it is a requirement that to bid on government contracts, an employer will need to have a valid Workers Compensation policy. Opt out companies are not considered as having a true Workers Comp policy. Trying to stack a ghost policy on top will not work either.

 

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James Moore

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Mgmt Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications

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