Tennessee Tries New Approach To Workers’ Comp
Tennessee has moved to join Oklahoma and Texas in creating another avenue for employers to avoid the traditional workers' compensation insurance system. Should the bill before the legislature pass, it would create an alternate system for injured workers in addition to the traditional state-run workers' comp benefits system.
The new bill, which mirrors a recent one passed in Oklahoma, would allow private employers to set up their own injury benefits plans. These plans would still be subject to review by state officials, and would be required to pass certain financial security tests and minimum benefit reviews. The goal of this scrutiny is to ensure that workers continue to be protected even if their employer opts out of the traditional workers' comp system.
Sponsors of the bill admit that their primary motivation is not the protection of vulnerable workers, but instead the financial benefit of their employers. The hope is that by allowing alternate means of insuring against employee injuries, employers can dramatically cut their workers' comp costs. Currently, public employers in Tennessee are allowed to set up their own benefit plans, something that has so far been unavailable to those in the private sector.
The plan amounts to a workers' comp opt-out, something that Oklahoma and Tennessee based on a Texas approach that dates back nearly a century. In Texas, employers who choose not to participate in the state run system are not required to create their own benefit plan. Those who choose to unsubscribe, lose the legal protections afforded by participation in the workers' comp system, meaning employees can sue privately for damages suffered on the job.
The same approach will be employed in Tennessee, should the measure pass. So far, employers appear willing to take their chance. In Texas, nearly a third of all employers unsubscribe from the system and use insurance and other means to protect against liability. Though employers may see real financial benefits from not participating, the worry is that injured workers may be left high and dry if an employer who opts out is not sufficiently protected in a privately arranged benefits plan, leaving the worker with nowhere to turn.
The Tennessee plan, as currently envisioned, would only contain two exceptions: those employers in the coal mining industry and those in construction. The rationale is that these two industries represent special cases where workers suffer especially high rates of serious injuries and keeping them under the state system helps ensure workers are protected in the event of an accident.
If you or someone you know has been injured in a workplace accident and you would like to discuss your case with an attorney, please contact one of our experienced Kansas workers' compensation lawyers at the Warner Law Offices today. Our attorneys are ready and willing to answer whatever questions you might have and can be reached at (316) 269-2500.
Source: "Workers comp opt-out bill introduced in Tennessee," by Stephanie Goldberg, published at BusinessInsurance.com.