Workers’ Compensation Reform

Passes In Oklahoma

Now It’s Time To Take On Lawsuit Reform

June 8, 2005

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$120 Million Workers’ Compensation Reform Bill Passes Special Session -  By votes of 39-7 in the Oklahoma State Senate on June 1st and 82-9 in the House of Representatives on June 3^rd, the state legislature passed SB 1X authored by Senate President Pro Tempore Mike Morgan and Speaker of the House Todd Hiett.  On Monday, June 6^th, Governor Brad Henry signed the bill into law.

“The bill is expected to save up to $120,000,000 for Oklahoma employers and make our state more competitive for attracting jobs,” said Larry Nichols (right), chairman of the board of The State Chamber.  “While it may not be a perfect bill, it is a major step forward in an arena where we were lagging behind.”

Why Workers Compensation Reform is Important to Oklahoma's Future

Oklahoma has the enviable record of being included among the Pollina "Top 10 Pro-Business States" for the second year running, although it slipped from 3^rd to 10^th in 2005.  Pollina Corporate Real Estate compiles the nationally distributed report for its clients who are looking for good facility locations.  To determine state rankings, the report examines 26 factors that shape the business environment over which state governments have control.

While overall, Oklahoma still ranks high on the Pollina list, its performance on two of these factors are viewed by some as a disaster in the making for Oklahoma:  workers compensation rates and job creation, for which Oklahoma ranks 39^th and 48^th in the nation respectively.

Leaders of both political parties praised the passage of this landmark bill.  “This legislation marks a significant boost for Oklahoma’s economy. This workers’ compensation reform measure will save Oklahoma businesses millions of dollars and guard the rights of injured workers,” said Governor Brad Henry. 

“I’m proud of this historic accomplishment,” said Speaker Todd Hiett (left), who made workers’ comp reform his number one priority this year and pushed for the measure throughout the four-month legislative session. “Working together in a bipartisan agreement, we’ll reduce litigation and medical costs, increase worker benefits and boost Oklahoma’s economy.   And, Senate President Pro Tempore Mike Morgan (right) praised the bill’s passage saying that “this legislation shows us again what we can accomplish through true bipartisan negotiation and cooperation.”  

What the Reform Bill Does

Increases benefits for workers, while capping benefits for “sprains and strains”

• Help injured workers get the money and fast medical treatment they deserve.

• Increases benefits for disfigurement from $20,000 to $50,000.

• Death benefits increased from $20,000 for a spouse to $100,000, and from $5,000 to $25,000 for a surviving child.

• Increases continuing disability benefits for surviving spouses.

• Increased “take home” benefits for hurt workers by avoiding attorneys’ fees through early resolution.

• Imposes a new cap on soft tissue injuries – Reduces the maximum from 300 weeks of temporary total disability (TTD) to 8 weeks.  If surgery is needed a claimant may receive an additional 16 weeks of TTD.

Reduces legal costs

• Value-added fees – In admitted cases, lawyers will only make money on the amount they obtain for a client above the settlement offered by the employer.  This encourages settlements on fair cases, and discourages attorneysfrom taking bad cases.

• Reduces the use of “dueling doctors” that fuel lawsuits and increase costs.

Reduces medical costs for workers & increases workplace safety

• Employers will choose doctors for workers as part of their terms of employment.

• Employees will have the right to request an independent doctor. This provision will cut down on fraud.

• Encourages enrollment in certified workplace medical plans (CWMP’s) to allow more efficient and effective use of managed care medical services by employees.

• Ensures that heart-related, aging-related, and cumulative injuries are clearly proven workplace injuries.

• Reduces the medical fee schedule and states that diagnostic tests are good for six months.

• Contains a $1,000 tax exemption for any company in the state that uses the Safety Pays program.

• Provides tax incentives for employers who make it possible for employees to return to work quickly and safely.

 Increases marketplace competition

• Creates a true market for workers’ compensation insurance by moving to a use-and-file system that will allow the market to set workers’ compensation rates, encouraging more competition. Insurance companies will be able to enter the Oklahoma market without receiving prior approval from the state, a boost to competition that will lower insurance rates.

“We are proud of our membership efforts to bring this important bill forward,” said Mike Seney, Senior Vice President – Operations for The State Chamber.  “While we carefully watch to ensure that this bill is fully implemented, both in the spirit and letter of the law, we will be returning our focus next session to an unfinished job…lawsuit reform.”

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