Oklahoma Supreme Court ends the state's workers' comp alternative

Dive Brief:

Oklahoma employers have lost their chance to "opt-out" of the state's original workers' compensation law, as the state's highest court ruled 7-2 that the alternative gives employers the authority to single out injured workers for inequitable treatment and is therefore unconstitutional, according to the Associated Press.
According to the Court's majority opinion, the controversial provision "creates impermissible, unequal, disparate treatment" of injured workers and "does not guarantee members of the subject class, all employees, the same rights when a work related injury occurs," in violation of the Oklahoma Constitution.
So far, Texas and Oklahoma were the only two states to offer "opt out" provisions in their workers' compensation systems. The idea is employers can bypass a state's workers' compensation system and create their own plan. But critics say employers that do that are prone to make it more difficult for an injured worker to recover for a work-related injury than someone covered by the state's plan, according to the ruling.

Dive Insight:

The Oklahoma court's decision comes on the heels of an in-depth investigation by National Public Radio and Pro Publica, which reported that in case after case, injured workers were not given the same level of protection under the "opt out" provision than they would get with the traditional workers' comp laws.

With workers comp costs continually rising, many employers, including large ones like Wal-Mart, Lowe's and others, have championed these alternative plans, along with a Texas lawyer named Bill Minnick, who designs opt-out alternatives. Some studies have shown that the opt-out plans do save money, but the court in Oklahoma essentially said "at what cost?"

According to Pro Publica and NPR, bills and draft proposals have surfaced in Tennessee, South Carolina, Georgia, Mississippi, West Virginia, Wisconsin and Illinois. With this legal setback, the movement could cool off a bit, but proponents say they will continue to fight to give employers a less costly workers' comp alternative.