Oklahoma Option

On May 6, 2013, Oklahoma Governor Mary Fallin signed Senate Bill 1062 into law.  This new law, Oklahoma Title 85A, which went into effect on February 1, 2014, is historic in multiple ways.  There are three main components of the Title 85A:

  • Sections 1-125 change the nature of Oklahoma’s workers’ compensation (WC) system from a judicial structure (one that expected injured employees to take their employers to court) to an administrative one (in which the vast majority of claims flow through bureaucratic channels);
  • Sections 200-213 introduce a new “Oklahoma option” as an alternative to WC; and
  • Sections 300-328 introduce an alternative dispute resolution process for WC.

(For more details on these changes, see “Gone to Texas: Oklahoma’s Workers’ Compensation System is a Boon to The Lone Star State.”)

 

While the magnitude of switching the conventional WC system from judicial to administrative cannot be overstated, our focus here is on the novel alternative to WC that all employers in Oklahoma now have.  Section 200 of Title 85 names this alternative “The Oklahoma Employee Injury Benefit Act,” but the most popular shortened name is the “Oklahoma option” (OKO). 

 

Is the Oklahoma Option like Texas Nonsubscription?

The short answer is, “Not really.”  Of course, the mere fact that Oklahoma and Texas are effectively the only two states with alternatives to WC puts these rivals in close company.  Still, the two alternatives are distinctively branded.

 

What is the Oklahoma Option?

The OKO is a small and closely monitored experiment to determine whether injured employees fare better under the general care of a statewide occupational injury system or the specific care of an employer who relies upon more efficient alternatives. Opponents of the OKO characterize employers as untrustworthy skinflints and harp on a false narrative of eternal strife between labor and management—a narrative that plays right into Hollywood story lines, partisan media reports and social media message boards. By contrast, proponents of the OKO use painstakingly collected data to demonstrate that most of the abuse suffered by injured workers within Oklahoma's WC system can be traced not to employers, but to stakeholders from the legal, medical and insurance communities. Although workers and their bosses occasionally have differences of opinion relating to the delivery of important benefits, they are always in perfect agreement about the importance of employees being healthy and working productively. This common ground can and should serve as the foundation of a mutually beneficial relationship between the employers who provide benefits and the injured workers who deserve them. The OKO enables employers to steward their employees through a system of care designed to produce superior outcomes while guaranteeing those workers access to the traditional WC system as a fail-safe.

From a content perspective, only about 10% (approximately 6,900 words of the total 69,000) of this overhauling law speaks to the innovative and unique OKO.  Having reviewed that limited content in detail, we can only characterize it as “explicitly vague.”  The drafters of the law intended to incent a less-regulated free market to succeed where the legacy of WC failed.  One opaquely clear example of this laissez-faire vagueness is found in Section 202.D., wherein the law clears the way for the development of ERISA plans (the documents that lay out the specifics of an employer’s workplace injury remedies):

Except as otherwise expressly provided in this act, neither

the Workers' Compensation Commission, the courts of this state, or

any state administrative agencies shall promulgate rules or any

procedures related to design, documentation, implementation,

administration or funding of a qualified employer's benefit plan.

Esoteric arguments regarding state versus federal purview aside, the drafters of the OKO went out of their way to restrain bureaucratic interference.  We have plenty of latitude to create the best solution for workplace injuries on the planet right here in Oklahoma.

 

The Apprised Sooner State – What’s Next?

To summarize the OKO in less than 35 words, it 1) requires employee benefits to be as good as those in WC; 2) provides the same exclusive remedy protections to employers as WC; and 3) leaves it to the free market to provide valuable details.

Workers Compensation Options is leading the charge into this emerging market.  Please contact us for a free consultation to learn how the OK option might affect your business.