The Oklahoma Legislature has unanimously approved changes to the Employee Injury Benefit Act (aka, the “Oklahoma Option”).  The new law confirms that timeframes for filing injury benefit claims and seeking first medical treatment remain subject to the terms of the benefit plan.  Most Oklahoma Option benefit plans require immediate injury reporting and medical care, subject to “good cause” exceptions.  Among other advantages, this leads to faster medical care, better medical outcomes, and safer workplaces for co-workers.

If an employee’s claim for injury benefits is denied for any reason, the plan must provide and communicate a clear process for appeal.  Appeals inside the benefit plan are reviewed at a higher level under either Oklahoma law or the same federal law that applies to employer-sponsored group health and retirement plans.  Following that internal appeal, employees can decide to further appeal any claim denial within one year to the Oklahoma Workers’ Compensation Commission or federal district court.

The new law adjusts that external claim appeals process to be more in favor of injured workers.  Review at the Oklahoma Workers’ Compensation Commission will first be handled by an Administrative Law Judge.  If that judge upholds the claim denial, the employee can further appeal to all Commissioners at the Workers’ Compensation Commission, and even take the claim to the Oklahoma Supreme Court.  This ALJ process and changes to the standards of review and development of Commission records were made in direct response to concerns expressed in a 2013 decision by the Oklahoma Supreme Court.

Lastly, the new law confirms the confidentiality of private-employer financial information submitted to the Oklahoma Insurance Department when seeking approval as a qualified employer.  The Department uses that information to confirm the employer has the insurance coverage or other financial means to pay all injury benefits.

The full text of the approved bill can be found here. Governor Fallin signed SB 767 into law on Friday, June 4.

The workers’ compensation environment in Oklahoma is worthy of recognition this Labor Day.

Workers’ compensation has been around for 100 years in the United States and is designed to rehabilitate, pay for health care and cover a worker’s lost wages.

In 2010, when I started advocating for reform, I looked nationwide to find the best practice used in administering this type of insurance program. I didn’t have to look far — it was our neighbor to the east, Arkansas. Oklahoma employers had to pay $2.52 for what Arkansas was paying $1! Oklahoma businesses were paying 250 percent more for identical coverage. This created an unlevel playing field for Oklahoma businesses. Oklahoma workers sometimes suffered lower wages as a result.

Medical care in Oklahoma was less expensive than in Arkansas, but the savings didn’t make their way to employees. Savings were eaten up in Oklahoma’s adversarial, lawyer-based workers’ comp system. There was no moral, ethical or economic justification for Oklahoma’s lawyered-up system that burdened employers and employees alike.

After years of missteps and opposition from those who preferred the job-killing status quo, in 2013 the Legislature had had enough. Lawmakers replaced the court-based system with an Arkansas-style administrative system. Now, employer and employee have a more level playing field in this most important insurance program.

Read the complete story on NewsOK.com

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Governor Mary Fallin Makes Workers’ Comp Transition Team Appointment

Oklahoma Commerce Department Executive Director Jonna D. Kirschner will work on changing the court-based system to an administrative one.

OKLAHOMA CITY – Governor Mary Fallin announced today that Jonna D. Kirschner, executive director of the Oklahoma Commerce Department, will serve on a transition team to establish a new workers’ compensation system authorized by state legislation passed and signed into law earlier this year.

Kirschner was appointed by Fallin in November to the top Commerce Department position after serving as deputy director and general counsel for the agency since 2003.

She starts her new duties Sept. 19.

The governor named Vaughn Clark, the Commerce Department’s director of community development, to serve as interim executive director. Clark, of Oklahoma City, has been community development director since 2003 and has been with the agency since 1994.

Kirschner will join Troy Wilson Sr., who was previously appointed by the governor as chairman of the new workers’ compensation commission, on the transition team. They will work to implement changes in the workers’ compensation court system called for in Senate Bill 1062. The measure is intended to overhaul the workers’ compensation system, which has been called a detriment to business and industry to the state.

Wilson and Kirschner will develop rules by Nov. 1 for the new system, which is to be up and running by Feb. 1. Wilson will serve as a commission chairman for the new system and Kirschner will be one of the system’s administrative law judges.

“As the executive director of the Commerce Department, a business lawyer and civic leader, Jonna Kirschner understands how important it is for Oklahoma to have a business friendly environment,” said Fallin. “Her work will help to establish a system that treats injured workers fairly while reducing costs for businesses and helping to grow Oklahoma’s economy.”

Kirschner received her Juris Doctorate from Boston College Law School and Bachelor of Arts from Dartmouth College. She became a corporate attorney in 1987 in London, England, where she worked with international and American energy companies, as well as international corporate clients. In 1994, she returned to Oklahoma primarily focusing on corporate acquisitions and corporate healthcare practices, being responsible for all aspects of business including human resources, productivity, accounting, statutory compliance issues and insurance.

“This presents an opportunity to be part of a new team to help guide a state agency from the ground up,” Kirschner said. The governor said Kirschner and Wilson “will be tremendous assets to helping us set up one of our very most important entities. Getting worker’s compensation right is a big priority for my administration.”

Oklahoma, one of just two states with a workers’ compensation court system, has the sixth-highest workers’ compensation rates in the nation for employers, which business leaders say is a major deterrent to businesses operating in the state.

SB 1062, among other things, establishes a three-member commission to be appointed by the governor. Commissioners, who must be confirmed by the Senate, will hire the administrative law judges. A court of exiting claims would be created to handle claims filed before Feb. 1.

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Commissioner Doak Receives Double Digit Decrease for Oklahoma Workers Compensation Loss Costs

OKLAHOMA CITY – An annual filing most insurance carriers will use to develop rates for workers’ compensation insurance shows a dramatic decrease in loss costs, Oklahoma Insurance Commissioner John D. Doak announced today. The overall loss cost decrease of 14.6 percent takes effect Jan. 1.

“This is fantastic news for Oklahoma businesses,” said Doak. “Reducing workers compensation costs by enticing new companies to come to the state and allowing current businesses to expand operations can trigger a new wave of economic prosperity. These decreases over a period of time will help to make Oklahoma much more competitive.”

The National Council on Compensation Insurance Inc. (NCCI) is an advisory organization that studies workplace injuries, collects workers’ compensation data, analyzes industry trends and prepares rate recommendations. The NCCI credits most of the decrease to the passage of SB 1062, which makes substantial changes to Oklahoma’s workers’ compensation system. The 14.6 percent projected reductions in loss costs represent the part of a workers’ compensation insurance premium for indemnity and medical payments and associated claim adjustment expenses, not reflecting overhead and profit.

“I commend Gov. Mary Fallin, Speaker of the House T.W. Shannon and Senate Pro Tempore Brian Bingman for dedication to improving the state’s workers’ compensation system,” continued Doak. “With their outstanding leadership and belief in pro-growth policies, Oklahoma will continue to thrive.”

The overall average loss cost impact at an industry group level is as follows:

Industry Group           Impact

Manufacturing           -16.3%

Contracting                -16.2%

Office and Clerical     -13.4%

Goods and Services   -14.1%

Miscellaneous            -12.2%

TOTAL                      -14.6%

Other key observations from the report include lost-time claim frequency continuing to decline across the state, indemnity average cost per case increasing for latest policy year and loss adjustment expenses declining for a lower average than nationwide.

For the most up-to-date information regarding the Oklahoma workers compensation reform, please visit http://www.ok.gov/oid/workerscompreform.html.

About the Oklahoma Insurance Department

The Oklahoma Insurance Department, an agency of the State of Oklahoma, is responsible for the education and protection of the insurance-buying public and for oversight of the insurance industry in the state.

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May 6, 2013

Editor’s Note: Attached to this message is a fact sheet on SB 1062.

Governor Mary Fallin Signs into Law Historic Workers’ Comp Reform

Bill Reduces Costs to Business, Ensures Injured Workers Treated Fairly

OKLAHOMA CITY – Governor Mary Fallin today signed into law Senate Bill 1062, a bill that reforms the workers’ compensation system in Oklahoma. The bill, by Senate President Pro Tem Brian Bingman and House Speaker T.W. Shannon, seeks to reduce costs for businesses. It moves the state from a court-based workers’ compensation system to an administrative system, allowing for more timely processing of claims and reducing the adversarial nature of the process for both workers and employers.

“For decades, Oklahoma has had one of the most expensive and inefficient workers’ compensation systems in the country, a constant obstacle for business owners looking to expand operations or create more jobs,” Fallin said. “Senate Bill 1062 completely overhauls our flawed workers’ comp system, dramatically reducing the costs to businesses and freeing up private-sector resources that can be invested in jobs rather than lawsuits. Additionally, our reforms ensure injured workers are treated fairly and given the medical care needed to return to work. This is an important pro-growth policy that will help us attract jobs and build a stronger and more prosperous Oklahoma. My thanks go out to Pro Tem Bingman, Speaker Shannon and the entire Legislature for sending this bill to my desk.”

Bingman, R-Sapulpa, said, “Oklahoma’s runaway workers compensation court has been the number one roadblock to job growth for decades, and today, we’re finally putting the brakes on these costs. Replacing our broken workers’ compensation system is historic. The Administrative Workers’ Compensation Act sends a clear signal to job creators that Oklahoma is truly open for business. This bill is especially needed to help us control the year-to-year fluctuation of costs, and to help us compete for good manufacturing jobs while making sure injured workers are treated fairly. I want to thank the members of the state Senate for their tireless work on this important issue. Also, I want to thank the Governor and Speaker Shannon for working with me to pass a historic pro-growth initiative.”

Shannon, R-Lawton, said, “Oklahoma has finally found a modern solution to an old problem. For too long, workers and businesses have been subjected to an archaic and inefficient workers’ comp system. This monumental shift from an adversarial judicial system to an administrative system will lower costs for businesses and get injured workers the quick relief they need.”

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SB 1062 fact sheet

BY STATE REP. RICHARD MORRISSETTE | Published: May 4, 2013

Regarding “Democrats offer plenty of rhetoric, no solutions” (Our Views, April 28), in which I was described as one who engages in class warfare and the comments from my colleagues were skewed: Let me say that what we’re facing here is working-class warfare upon Oklahoma labor.

Recently passed Oklahoma workers’ compensation reforms came as a bit of a surprise to most, as 2011 reforms had just been formally enacted. But as Cesar Chavez of the United Farm Workers Union always said, “It’s not about grapes or lettuce. It’s always about people.” And I have a people-related theory as to the timing of Senate Bill 1062.

With the recent release of 2011 workplace safety data, a troubling trend in on-the-job injury and fatality has apparently sent a chill throughout Oklahoma business and industry whose leaders may see workers’ comp reform as a hedge against an inevitable call for potentially costly improvements to workplace safety.

Oklahoma doesn’t comply with OSHA, and recent labor statistics from the Bureau of Labor Statistics confirm that the question we need to be asking is “How safe are workers in Oklahoma?” and “How will workers’ comp reforms protect business and further affect the safety of workers?”

Read the complete story on NewsOK.com

Oklahoma is likely to become the second state in the nation to allow employers to opt out of its workers compensation system.

Oklahoma Gov. Mary Fallin said Tuesday that S.B. 1062 — the measure that the state House approved Wednesday on a 74-24 vote — is among bills she looks forward to signing.

The legislation now returns to the Senate for final approval before going to the governor, Senate President Pro Tempore Brian Bingman said in a statement about the legislation that he introduced.

Read more 

Commissioner Doak Says Workers’ Compensation Bill Will Spur Economic Growth

OKLAHOMA CITY – Oklahoma Insurance Commissioner John D. Doak applauds the leadership of Speaker of the House T.W. Shannon and Senate President Pro Tem Brian Bingman in the passage of State Bill 1062 in the House today. The bill is set to change the current court-based workers’ compensation system to an administrative system and give the option of developing an alternative benefit plan to qualified employers.

“Workers’ Compensation reform is a subject that I identified as critical and important to our state from the moment I was elected,” said Oklahoma Insurance Commissioner John D. Doak. “Oklahoma has one of the highest average costs of Workers Compensation benefits in the nation at a rate of $830 per employee. Because Arkansas and Texas are under $300 per employee, this has not only had an impact on our state economy, but also limits the growth of local businesses.”

SB 1062 would establish prompt responses to employees in the claims process and encourage employers to do the right thing in a more user-friendly, less adversarial environment.

The Oklahoma Insurance Department conducted a recent statewide tour providing opportunities to discuss current workers’ compensation concerns and the possibility of various future reform measures. High costs and fraud are listed as the biggest problems with Oklahoma’s workers’ compensation system, according to survey responses received during the public forums discussing workers’ compensation concerns.

“I appreciate that Rep. Richard Morrissette recognized on the floor during debate today the hard work that my department put into this bill, even though he disagreed with our position,” continued Doak. “Ultimately, I understand the burden Oklahoma businesses have felt with the increasing costs and I can also relate to the pain suffered by injured employees who are trapped by a benefit system unresponsive to their needs.”

Survey respondents also identified a key solution to workers’ compensation problems to be the implementation of an administrative system to replace the current court-based claim system. A majority of states have adopted a structure for workers’ compensation claim administration.

State Bill 1062 will go back to the Senate for vote as the next step after passing through the House today.

ABOUT THE OKLAHOMA INSURANCE DEPARTMENT
The Oklahoma Insurance Department, an agency of the State of Oklahoma, is responsible for the education and protection of the insurance-buying public and for oversight of the insurance industry in the state.

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OKLAHOMA CITY (April 24, 2013) – State Chamber President Fred Morgan comments on today’s House passage of Senate Bill 1062, workers’ compensation replacement legislation. The bill passed with a vote of 74-24 and now returns to the Senate for consideration of House amendments.

“This is the most important piece of reform legislation to our state’s workers’ compensation system in more than two decades. In fact, it is one of the most important pro-business bills passed in the history of our state,” said State Chamber President Fred Morgan. “Moving to an administrative system will help reduce out-of-control costs, while improving the process and experience within the system for the employer and employee alike. This legislation will exponentially improve our state’s ability to compete for jobs and investment.

“We are fortunate to have a Legislature that understands business and what it takes to grow our state’s economy. I applaud the legislative leadership for skillfully and expeditiously moving this historic bill through the Legislature. Gov. Mary Fallin has been a champion of workers’ compensation reform for decades, fighting for a system that reduces costs for business and treats injured workers fairly. Senate Bill 1062 is the reform Oklahoma has been waiting for, and we look forward to the Senate accepting House amendments and Gov. Fallin signing this legislation into law as soon as possible.”

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Contact: Jennifer Monies

jmonies@okstatechamber.com

Fallin, Legislative Leaders Announce Agreement on Tax Cuts, Workers’ Compensation Reform and Pay-As-You-Go Infrastructure Plan

OKLAHOMA CITY – Governor Mary Fallin, Senate Pro Tem Brian Bingman and House Speaker T.W. Shannon today announced agreement and impending action on key legislative items, including income tax cuts, workers’ compensation reform and a plan to address long-term infrastructure needs. Three bills were identified as having the support of both the governor and majorities in the House and Senate.

House Bill 2032 would cut the top income tax rate from 5.25 percent to 5.0 percent on January 1, 2015. It would cut the rate further, to 4.85 percent, on January 1, 2016. The second cut is contingent on total revenue growth in FY 2016 being equal to or greater than the FY 2016 fiscal impact of a 0.15 percent tax cut. The bill also provides for a total of $120 million to fund repairs to the Oklahoma State Capitol.

Senate Bill 1062 reforms the workers’ compensation system in Oklahoma. It reduces legal costs, medical costs, and excessive payouts to workers that have driven up costs for Oklahoma businesses and encouraged fraud. It moves Oklahoma from a court-based workers’ compensation system to an administrative system, reducing the adversarial nature of the system and reducing the time needed to process claims. It ensures that injured workers are treated fairly and compensated appropriately.

House Bill 1910 creates a Pay-As-You-Go Infrastructure Plan and forms the Long-Range Capital Planning Commission which will first address the repair of the state Capitol and later develop an 8-year plan to address the state’s other maintenance issues. The commission’s plan will create a system for maintenance to address the state’s needs without incurring unnecessary debt. It will also include recommendations on reallocation, reuse or liquidation of state properties.

Fallin said she looked forward to signing the measures into law, saying the announcement set the stage for a productive legislative session.

“My thanks go out to the Speaker and the Pro Tem for working together with my office on these important issues,” Fallin said. “Delivering a responsible, meaningful tax cut will boost our economy and help us to create more jobs and bring more businesses to Oklahoma. Likewise, overhauling our flawed workers’ comp system will reduce costs to employers and allow them to invest in jobs and growth rather than lawsuits. Finally, our long-term infrastructure improvement plan will ensure we are maintaining and improving state assets, rather than watching them deteriorate. Today’s announcement represents an exciting, important step forward for Oklahoma. I look forward to signing these three measures into law.”

Bingman said that workers’ compensation reform would address the state’s greatest obstacle to job growth.

“Today’s announcement shows our commitment to government that is smaller, simpler, and smarter,” said Bingman, R-Sapulpa. “Our broken workers’ compensation system is Oklahoma’s greatest obstacle to job growth, and I believe the time has finally come to put the brakes on our runaway costs. Moving to an administrative system will attract quality manufacturers back to Oklahoma, and together, our tax cut and workers’ compensation overhaul plans are an important step toward creating more certainty in Oklahoma’s business environment. Additionally, our long-range infrastructure plan shows a forward-thinking approach to good stewardship of taxpayer-owned assets. I am thankful for the leadership shown by Governor Fallin and Speaker Shannon as we have worked to craft agreements on issues of such importance to Oklahoma’s future.”

Shannon said the three bills would support Oklahoma growth and prosperity.

“Our offices have come together to ensure a better future for Oklahoma,” said Shannon, R-Lawton. “These three crucial measures prove that the conservative leadership of this state is committed to government efficiency, reducing the tax burden and becoming better stewards of our citizen-funded infrastructure. Through implementing monumental workers’ comp reform, cuts in the personal income tax, and a Pay-As-You-Go infrastructure plan, we are moving forward with responsible policies that will produce growth and prosperity for the people of our great state. As I have said many times before, we will not go down the same path of Washington, D.C., by continuing an endless cycle of taxing, spending and borrowing against the future of our children.”

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By Nolan Clay | Published: April 15, 2013   © Copyright 2013, The Oklahoman

A secretive group is spending thousands of dollars on political ads calling for the defeat of legislation that would dramatically change the workers’ compensation system in Oklahoma, records show.

The group, Oklahoma Works, does not have to disclose its financial backers because of a loophole in the law.

“If they are engaged only in issue advocacy, then there’s no requirement that they register or report with us,” said Lee Slater, the new executive director of the Oklahoma Ethics Commission.

The Oklahoman was able to identify one financial backer of the group as Brandon Burton, an Oklahoma City attorney who represents injured workers at the comp court and is paid from their awards.

Read more…

Gov. Mary Fallin and Republican legislative leaders say they are committed to reducing the personal income tax and overhauling the workers’ compensation system.

By Michael McNutt | Published: April 15, 2013

Last-minute twists and turns have strained feelings, but Republican legislative leaders and the GOP governor say they are on track to reduce Oklahoma’s top personal income tax rate and overhaul the workers’ compensation system.

All say they want to avoid what happened last year: Proposals to reduce the personal income tax and to change a part of the workers’ compensation system, both high priorities then as they are now, failed to advance.

The workers’ compensation measure, contained in Senate Bill 1062 by Senate President Pro Tem Brian Bingman, R-Sapulpa, and House Bill 2032, which contained an income tax cut proposal by Gov. Mary Fallin and House Speaker T.W. Shannon, R-Lawton, made it through last week’s latest legislative deadline.

Read more…

By Michael McNutt

A revised bill that would significantly change how Oklahoma handles workers hurt on the job won easy passage Tuesday by a House committee despite an hourlong attack by Democrats on the panel.

Rep. Richard Morrissette, D-Oklahoma, called Senate Bill 1062 morally reprehensible and disgusting. But Rep. Leslie Osborn, R-Mustang, chairman of the House Judiciary Committee, said if it would become law, the bill would “be the best thing to happen to Oklahoma in years.”

The committee voted 11-4 along party lines to pass SB 1062. It now goes to the House Calendar Committee, which will decide whether it gets a hearing in the House.

GOP leaders in the Republican-controlled Legislature and Republican Gov. Mary Fallin have said changing the workers’ compensation system is a key priority for them to accomplish before the session ends late next month.

Read more…

OKLAHOMA CITY (April 9, 2013) – “This is the most important piece of reform legislation to our state’s workers’ compensation system in more than two decades. Moving to an administrative system will help reduce out-of-control costs, while improving the process and experience within the system for the employer and employee alike,” said State Chamber President Fred Morgan.

“Tens of thousands of businesses across Oklahoma are desperate for this legislation now. Negotiations are ongoing to ensure the bill passed by the House Judiciary Committee is improved upon and I am confident that lawmakers will answer the call of businesses and all Oklahomans who know our costly system is broken and hurting our state’s ability to compete economically. We are confident a meaningful reform bill will pass the House that is able to head to Gov. Mary Fallin’s desk for signature as soon as possible. We cannot afford to wait.”

The bill passed the House Judiciary Committee with a vote of 11-4 and now goes to the full Senate for further consideration.

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Contact: Jennifer Monies
jmonies@okstatechamber.com
405-235-3669

BY RANDY KREHBIEL World Staff Writer

Friday, April 05, 2013

OKLAHOMA CITY – A House of Representatives rewrite of the Senate’s workers compensation bill makes a lot of changes but leaves in place the basic elements sought by state business leaders.

The House Judiciary Committee’s substitute to Senate Bill 1062 moves the state closer to junking its workers compensation courts in favor of an administrative system and to allowing individual employers to set up their own workers comp plans along the same lines as health insurance benefits.

But the committee substitute also restores some benefits to injured workers and their survivors, provides for a board of appeals and reduces the governor’s control of the three-member commission that would oversee the new system.

Rep. Fred Jordan, R-Jenks, the House Majority Leader and one of the Judiciary Committee members who produced the substitute measure, said he and his colleagues had several concerns about the Senate version.

Read more…