Oklahoma And Texas Opt-Out
Oklahoma appeared on the Workers Compensation radar screen over the last few weeks. Texas has the opt-out or non-subscriber choice in Workers Comp. I had consulted with a few Texas clients that were using the opt-out services. I had previously written an article on the Oklahoma Opt-out here.
The Oklahoma House voted down the opt-out amendment. There were so many discussions in the insurance blogosphere on Oklahoma’s push for non-subscriber services. I had thought the legislation would easily pass and be signed by Governor Fallin. There was no veto expected.
The main reason for the bill to not be passed in the House was the concern that the employees would not be treated fairly. The other reason might have been that the plaintiff bar worried that it was going to not treat their bank accounts fairly.
The reason for not passing the bill was that the injured workers may not receive the proper benefits as they would have under the current Workers Comp system.
I read a few articles earlier this week that indicted the proponents of the legislation would likely marshal their forces again. These groups of opt-out advocates were going to try to get some type of opt-out bill approved over the next few weeks.
I grew up in Oklahoma. One of the main themes was whatever Texas does, we will do it and it better. I am actually glad to see the bill did not pass the House. The main reason is the writers of the bill did not take into account, the Law of Large Numbers. For any type of insurance program to work, there has to be enough willing participants. Oklahoma has always suffered from the “Texas Fever”.
The Texas system for opt-outs has been in place for quite some time. In my humble opinion, Oklahoma did not understand what they were getting into when they just had to be like Texas. There are some changes desperately needed in the Workers Comp system.
On a side note, the two main clients that I had with non-subscriber services in Texas both went bankrupt. I do not think it was due to their Workers Comp opt-out program. However, they both had called us in to help them with a string of very serious accidents which they could not even afford to furnish benefits. Oklahoma may have been very wise to not to have the “Texas Fever” again.
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