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Oklahoma’s Workers Comp Opt Out Program Trumped By ACA


Oklahoma’s Workers Comp Opt Out Program vs Obamacare

Oklahoma’s new opt out program legislation is working its way through the very long path to becoming law sometime in 2013.  The likely passage of the bill has created quite a buzz on the Workers Comp airwaves.

Oklahoma Opt Out Program Great Seal
Wikimedia – State of Oklahoma

One of the more interesting areas of the new Oklahoma opt out program is that the Workers Comp benefits must be provided under an SPD (Summary Plan Description).  The SPD is the description of all benefits provided to each employee such as health benefits.

The SPD’s are usually provided at the start of employment in most cases.   As the SPD’s provide information on health benefits and other federally legislated benefits, the Obamacare law may cause more problems and confusion with Workers Comp benefits under the opt out plans.

The Oklahoma Opt Out Bill will likely be signed by the Governor in the coming weeks.  The SPD’s contents are often dictated by Federal Laws.   One of the Risk Managers for an employer that is heavily pushing for the opt out program had mentioned this point previously.

The Obamacare bill under Section 2715 – specifically addresses SPD’s calling them summaries.  The most important question to ask – If an Oklahoma employer begins an opt out program for Workers Comp, then would the benefits then be considered a health and disability policy?   The answer is hopefully not, but likely so.

Section 2715 of the bill has been included below.



Obamacare Opt Out Program signing
Wikimedia Commons – Pete Souza

‘‘(a) IN GENERAL.—Not later than 12 months after the date of enactment of the Patient Protection and Affordable Care Act,  the Secretary shall develop standards for use by a group health plan and a health insurance issuer offering group or individual health insurance coverage, in compiling and providing to enrollees  a summary of benefits and coverage explanation that accurately
describes the benefits and coverage under the applicable plan or  coverage.

In developing such standards, the Secretary shall consult  with the National Association of Insurance Commissioners (referred to in this section as the ‘NAIC’), a working group composed of representatives of health insurance-related consumer advocacy organizations, health insurance issuers, health care professionals,  patient advocates including those representing individuals with limited English proficiency, and other qualified individuals.

‘‘(b) REQUIREMENTS.—The standards for the summary of benefits and coverage developed under subsection (a) shall provide for the following:

‘‘(1) APPEARANCE.—The standards shall ensure that the summary of benefits and coverage is presented in a uniform format that does not exceed 4 pages in length and does not  include print smaller than 12-point font.

Physician Opt Out Program check up
Wikimedia Commons – Bill Branson

‘‘(2) LANGUAGE.—The standards shall ensure that the summary is presented in a culturally and linguistically appropriate  manner and utilizes terminology understandable by the average plan enrollee.

‘‘(3) CONTENTS.—The standards shall ensure that the summary of benefits and coverage includes—
‘‘(A) uniform definitions of standard insurance terms and medical terms (consistent with subsection (g)) so that  consumers may compare health insurance coverage and  understand the terms of coverage (or exception to such coverage);

‘‘(B) a description of the coverage, including cost sharing for—
‘‘(i) each of the categories of the essential health  benefits described in subparagraphs (A) through (J)
of section 1302(b)(1) of the Patient Protection and Affordable Care Act; and
‘‘(ii) other benefits, as identified by the Secretary;

‘‘(C) the exceptions, reductions, and limitations on coverage;

‘‘(D) the cost-sharing provisions, including deductible, coinsurance, and co-payment obligations;

‘‘(E) the renewability and continuation of coverage provisions;

‘‘(F) a coverage facts label that includes examples to illustrate common benefits scenarios, including pregnancy and serious or chronic medical conditions and related cost  sharing, such scenarios to be based on recognized clinical practice guidelines;

Woman Heaving Headache Holding Hot Bottle Water

‘‘(G) a statement of whether the plan or coverage—

‘‘(i) provides minimum essential coverage (as defined under section 5000A(f) of the Internal Revenue
Code 1986); and
‘‘(ii) ensures that the plan or coverage share of the total allowed costs of benefits provided under the
plan or coverage is not less than 60 percent of such costs;

‘‘(H) a statement that the outline is a summary of  the policy or certificate and that the coverage document  itself should be consulted to determine the governing contractual provisions; and

‘‘(I) a contact number for the consumer to call with additional questions and an Internet web address where a copy of the actual individual coverage policy or group certificate of coverage can be reviewed and obtained.

Benefits Paper Opt Out Program On Table
Wikimedia Commons – Sage Ross

‘‘(c) PERIODIC REVIEW AND UPDATING.—The Secretary shall  periodically review and update, as appropriate, the standards developed under this section.
‘‘(1) IN GENERAL.—Not later than 24 months after the date of enactment of the Patient Protection and Affordable Care
Act, each entity described in paragraph (3) shall provide, prior to any enrollment restriction, a summary of benefits and coverage explanation pursuant to the standards developed by  the Secretary under subsection (a) to—
‘‘(A) an applicant at the time of application;
‘‘(B) an enrollee prior to the time of enrollment or
reenrollment, as applicable; and
‘‘(C) a policyholder or certificate holder at the time of issuance of the policy or delivery of the certificate.
‘‘(2) COMPLIANCE.—An entity described in paragraph
(3) is deemed to be in compliance with this section if the summary of benefits and coverage described in subsection (a) is provided in paper or electronic form.
‘‘(3) ENTITIES IN GENERAL.—An entity described in this
paragraph is—
‘‘(A) a health insurance issuer (including a group health plan that is not a self-insured plan) offering health insurance coverage within the United States; or
‘‘(B) in the case of a self-insured group health plan,  the plan sponsor or designated administrator of the plan
(as such terms are defined in section 3(16) of the Employee
Retirement Income Security Act of 1974).
‘‘(4) NOTICE OF MODIFICATIONS.—If a group health plan or health insurance issuer makes any material modification in any of the terms of the plan or coverage involved (as defined  for purposes of section 102 of the Employee Retirement Income  Security Act of 1974) that is not reflected in the most recently  provided summary of benefits and coverage, the plan or issuer  shall provide notice of such modification to enrollees not later  than 60 days prior to the date on which such modification will become effective.
‘‘(e) PREEMPTION.—The standards developed under subsection
(a) shall preempt any related State standards that require a summary of benefits and coverage that provides less information to  consumers than that required to be provided under this section,
as determined by the Secretary.
‘‘(f) FAILURE TO PROVIDE.—An entity described in subsection
(d)(3) that willfully fails to provide the information required under this section shall be subject to a fine of not more than $1,000 for each such failure. Such failure with respect to each enrollee
shall constitute a separate offense for purposes of this subsection.
‘‘(1) IN GENERAL.—The Secretary shall, by regulation, provide for the development of standards for the definitions of terms used in health insurance coverage, including the insurance-related terms described in paragraph (2) and the medical  terms described in paragraph (3).

‘‘(2) INSURANCE-RELATED TERMS.—The insurance-related terms described in this paragraph are premium, deductible,  co-insurance, co-payment, out-of-pocket limit, preferred provider, non-preferred provider, out-of-network co-payments, UCR (usual, customary and reasonable) fees, excluded services, grievance and appeals, and such other terms as the Secretary determines are important to define so that consumers may compare health insurance coverage and understand the terms of their

‘‘(3) MEDICAL TERMS.—The medical terms described in this paragraph are hospitalization, hospital outpatient care, emergency room care, physician services, prescription drug coverage,  durable medical equipment, home health care, skilled nursing care, rehabilitation services, hospice services, emergency medical transportation, and such other terms as the Secretary determines are important to define so that consumers may compare the medical benefits offered by health insurance and
understand the extent of those medical benefits (or exceptions
to those benefits).

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James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management 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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