2016 Opt Out Legislation: Is it as “Inevitable” as Some Have Hoped/Feared?

I read with great interest Bob Wilson’s post yesterday signaling that the Tennessee Opt Out “initiative” may be DOA this year.  Indeed, I’d been checking Bill Tracking Reports since the first of January and I had not seen any formal re-introduction of opt out legislation this year in either Tennessee or South Carolina. As indicated by Bob, the Tennessee Walker version of opt out seems to have stumbled out of the gate.

Last November, during the National Workers’ Compensation and Disability Conference held in Las Vegas, some—not nearly all—opt out proponents had bantered around the “i” word. You know it: “inevitable.” The talk was something like we sometimes see out of our nation’s capital. That is to say, some—again not nearly all—proponents were allowing that the opt out “alternative” was/is of obvious benefit; if some people disagree, it’s more a failure of the message than it is a failure of the merits.

Well, it appears that as more light is shined on the alleged merits of the employer-oriented legislation, some of that light also spills over and illumines a host of demerits that have been lying in the shadows. Kudos to those in Tennessee who understand that the workers’ compensation system is not an employee benefit system like a 401K or money purchase pension plan. Kudos to those in Tennessee, and perhaps even, South Carolina, who see opt out as a legislative tool to create two separate and quite unequal classes of employees. Kudos to those who ask that with all the talk of “alternatives,” why is it that only the employers get a choice?

Kudos to those who see workers’ compensation instead as a system that, as my mentor, Arthur Larson, once wrote, believes:

in the wisdom of providing, in the most efficient, most dignified, and most certain form, financial and medical benefits for the victims of work-connected injuries which an enlightened community would feel obliged to provide in any case in some less satisfactory form, and of allocating the burden of these payments to the most appropriate source of payment, the consumer of the product.

Larson’s Workers’ Compensation Law, Ch. 1, § 1.03[2].

The underlying and unstated goal of opt out legislation is to shift the burden and cost of work-related injuries (and diseases) from some employers’ bottom lines onto society as a whole. It’s a type of corporate welfare and should be understood as such. For several years now, some have thought it to be an inevitable movement within the American economy. The action within the Tennessee House Consumer Affairs Committee shows that may not at all be the case.  We’ll see.

I still suspect, however, that there are more opt out battles ahead.