Oklahoma Legislature Can’t Agree on Opt Out Fix

The Oklahoma legislature adjourned last Friday (May 27, 2016), without resolving a bill that would have amended several troublesome provisions of the state’s controversial Employee Injury Benefit Act (“opt out” law). Some in the legislature felt the amendments were necessary in order to respond to a February 26, 2016 decision by the state’s Workers’ Compensation Commission (Vasquez v. Dillard’s) that declared important parts of the opt out law unconstitutional (see my earlier post regarding Vasquez). The original bill—2015 Bill Text OK H.B. 2205—was first introduced in the Oklahoma House during the last legislative session. On March 4, 2016, the Oklahoma Senate passed the bill, with modifications. The House rejected those modifications and the bill is dead, at least for now.

H.B. 2205, As Modified, Would Have Addressed Key Vasquez Objections

In its latest iteration, the bill would have required all opt out plans to have the same statute of limitations and notice of injury provisions as in the state’s Administrative Workers’ Compensation Act (the traditional, non-opt out coverage that applies to the vast majority of Oklahoma employers). A separate provision of the bill would have provided that, regardless of whether or not such provisions were incorporated into an opt out plan, all opt out employers, and their covered employees, were subject to the provisions of the Administrative Workers’ Compensation Act related to:

• Compensable injury
• Course and Scope of Employment
• Fraud
• Discrimination or retaliation
• Liability other than immediate employer, and
• Failure to Appear for Scheduled Appointments

Under the existing opt out framework, the Oklahoma Commissioner of Insurance has approved benefit plans that utilize a definition of “injury” that is much more restrictive than that found in the state’s Administrative Workers’ Compensation Act. In spite of the fact that the original opt out law required opt out plans to utilize the same statute of limitation as was applicable for employers who had not opted out, the Commissioner approved numerous opt out plans that in essence had a 24-hour (in some cases even less) limitations period. The Commissioner also has approved plans that contain provisions that allow the employer to cease paying all benefits if the employee fails to appear for a scheduled medical appointment. H.B. 2205, in its current version, would have make the opt out and non-opt out schemes more alike. Critics say the two still would have been far from alike.

Plans Would Have Been Subject to Public Scrutiny

A number of opt out critics, including this author, have pointed to a lack of transparency on the part of opt out employers and their plan administrators. Successful amendments to the original opt out scheme reinforced the secrecy allowed opt out employers. Had House Bill 2205 been passed, at least some of that secrecy would have been reversed. The latest version of the bill contained a provision that would have specifically provided that all benefit plans had to be “open to the public.”

What Now?

Dillard’s, the employer in the Vasquez case, has appealed to the Supreme Court of Oklahoma. The Court will likely hear arguments in the case sometime this summer. House Bill 2205 would not have affected the Vasquez case in any event.