Earlier this year, Oklahoma passed SB 878, which is designed to overhaul Oklahoma’s worker’s compensation system. The legislation marks the first substantive changes to the system in Oklahoma in 34 years. The bill takes effect next month.
Governor Fallin spearheaded the movement to change the way Oklahoma deals with worker’s compensation by orchestrating a Worker’s Compensation Study Group to provide guidance on how to reduce Oklahoma’s workers compensation rates to make the state more competitive for job creation. The group included members of the legislature and business professionals from various backgrounds. The recommendations from the group were laid out in SB 878 and the resolution was widely supported by both Democrats and Republicans, unanimously passing through the Senate 48-0, and then easily passing the House of Representatives 88-8.
The goal of this reform was to make Oklahoma more competitive in attracting new businesses to the state by lowering the costs of worker’s compensation insurance. This goal is obtained by raising the requirements for filing a claim, adopting stronger medical standards to govern care, and reducing the likelihood of frivolous disability claims.
The bill is over 200 pages long, but a few major changes are worth noting. For starters, the bill shortens the time period that workers can file a worker’s compensation claim from 2 years to 90 days. This is a drastic change and is designed to discourage frivolous or retaliatory claims against employers for injuries that occurred years ago. Additionally, the employee now must show by a preponderance of the evidence that any “compensable injury” was in fact caused by the employment-there is no longer a presumption that the mere occurrence of an unexpected or unforeseen injury was in fact caused by the employment. The employee must also demonstrate that a work-related activity was the “major cause” of such injury. Previously, “any competent evidence” linking the workplace activity to the injury was sufficient for an employee to qualify for worker’s compensation coverage.
The bill further protects employers by limiting who qualifies as a “Qualified Independent Medical Examiner” or “Qualified ME.” Only a licensed medical doctor or doctor of Osteopathy who is qualified to perform the treatment needed may serve as a Qualified ME. Previously, individuals who were not medical doctors, such as Chiropractors, could give an opinion regarding the medical treatment required by an employee, even where the medical professional was not qualified to perform the treatment she recommended. This encouraged claimants to “doctor-shop” in order to find a doctor who would support the largest possible claim for the employee.
SB 878 also eliminates death benefits for spouses of workers killed on the job once the spouse remarries. This provision is designed to lower the overall amounts paid out by insurance companies, which in turn would help lower premiums. The legislature also believes that if worker’s compensation payouts are lowered, it would encourage increased competition among insurance companies in Oklahoma, which would also drive down insurance costs.
For a Total Temporary Disability (“TTD”), wages are still set at 70% of the worker’s average weekly wages (not to exceed the state’s average weekly wage), but the employee can collect that amount for no more than 156 weeks; previously it was 300 weeks. Moreover, an employee can no longer draw TDD if she is receiving unemployment or short term disability benefits.
The goal of SB 878 is to lower the insurance premiums businesses must pay for worker’s compensation while still providing adequate benefits to those who are injured on the job. The bill received overwhelming support from both of Oklahoma’s political parties, and will hopefully achieve its desired goal of reducing the cost of doing business in Oklahoma in order to encourage new business in the state.