In 2014, the legislature approved SB 1062 to negate expensive litigation and better protect working Oklahomans by transforming the state’s workers’ compensation system from a judicial system to an administrative one. Since that law went into effect July 1, 2014, we’ve seen workers compensation “loss costs” decrease significantly and injured employees get medical intervention sooner. Both changes continue to help in attracting new companies to Oklahoma as well as being used as an attractive retention tool for the businesses already here. Many of us in the legislature remain committed to a successful transformation despite the recent State Supreme Court ruling overturning the opt-out/ self insurance provision of that legislation.
To refresh your memory, SB 1062 authored by Sen. Anthony Sykes created an administrative workers compensation system based on the highly successful Arkansas model. Sen. Sykes and I were able to travel to Arkansas to learn about their model prior to the bill’s introduction in 2013 and were encouraged by the Arkansas systems’ benefit to both workers and employers.
Oklahoma was one of the only states left in the nation using a judicial workers’ comp system in 2013. At the time, Arkansas had the third lowest workers compensation premium rates in the nation and our system was ranked as one of the most expensive systems for employers in the country. The Arkansas model ensured injured workers were protected and awards were about their restitution rather than awards drained by legal fees.
After SB 1062 went into effect, the Oklahoma Workers’ Compensation Commission and the Oklahoma Workers’ Compensation Court of Existing Claims began operating as independent agencies. In the last two years, we have gotten away from the old, ineffective court-based workers’ comp system and moved to the more cost-effective administrative system. The old judicial system has been slowly phased out as cases were wrapped up.
I’m extremely disappointed in the State Supreme Court that is once again legislating from the bench. The bench has slowly been trying to tear this historic Act apart provision by provision. This week, they ruled unconstitutional the provision that allowed employers to opt out of traditional workers comp insurance if they provided a separate plan with benefits. This component of the Oklahoma Administrative Workers Compensation Act was not like the Arkansas system; therefore, with it being removed from our states list of options, our system is now more like Arkansas than before.
This Act was one of the most pro-business pieces of legislation in our state’s history. Business owners pleaded with the legislature for years to get away from the old workers’ comp system because it was the biggest inhibitor to them growing their businesses.
Regardless what opponents say, the new administrative system is working. The National Council on Compensation Insurance (NCCI) filed its annual overall loss cost that most insurance carriers will use to develop rates for workers’ comp insurance. The overall loss cost has decreased 10.2 percent, and the NCCI attributes that decrease to all of the workers comp reforms made in recent years as well as market trend and experience. Since 2013, the total impact of NCCI filings is a 44 percent decrease. This is incredible news for Oklahoma business owners as the less they spend on workers comp insurance, the more than can put towards ensuring injured employees are made whole as well as putting dollars towards job creation versus what used to be excessive litigation.
To contact me at the Capitol, please write to Senator Josh Brecheen, State Capitol, 2300 N. Lincoln Blvd. Room 413, Oklahoma City, OK, 73105, email me at [email protected], or call (405) 521-5586.
Submitted by State Sen. Josh Brecheen.