Workers' Comp Opt-Out Policies Are Bad for Employees

Workers' Comp Opt-Out Policies Are Bad for Employees

Posted By Douglas F. Kaleita, P.C. || 13-Apr-2016

Every state has its own set of rules and regulations regarding workers’ compensation. While many states have slight variations, most workers’ compensation plans require employers to have a policy that covers medical expenses and a portion of lost wages – usually 2/3 - in the event that an employee should suffer a work-related injury or illness. In recent years, however, some states have implemented an “opt-out” arrangement in which employers can choose to operate without a workers’ compensation policy in exchange for an alternative benefits plan.

Texas and, up until recently, Oklahoma, have allowed employers to come up with their own workplace injury plans. While this choice in theory appears to give employers more choices and freedom, these policies have ended up creating massive problems for injured employees. These alternative plans have been known to cover a much smaller range of injuries and impose unreasonable restrictions, such as shorter compensation durations and minimal lists of approved doctors. According to an investigation by NPR and ProPublica, many of these plans outright violate federal law but are left unchallenged due to their unregulated nature.

For example, U.S. Foods has written a provision into their program that exempts all diseases or illnesses “regardless of how contracted,” thereby allowing them to avoid liability for work-related hazards such as toxic chemical exposure or heatstroke. In another case, Costco offers its employees a maximum of $600 for hearing aids – despite the fact that the least expensive model of hearing aids sold at Costco is priced at more than $900.

While employers who have opted out of workers’ compensation may possibly be sued by an injured worker for civil damages in some instances, many uninsured employers have their employees waive their right to sue in exchange for a promise to cover any medical expenses they should incur in the event of a workplace injury. Employees often reluctantly take this deal, as they would otherwise be unable to afford their medical treatment while waiting to pursue legal action.

Are “Opt-Out” Programs Legal?

Considerable controversy has arisen over the lawfulness of opt-out programs. The United States Department of Labor is currently examining whether or not these plans violate federal law and, if so, whether possibly they should be outlawed. The Oklahoma’s Workers’ Compensation Commission recently declared alternative compensation programs unconstitutional, citing a case where an injured Dillard’s department store employee was denied benefits supposedly due to a “pre-existing condition” when the employee suffered an injury while lifting boxes of shoes. According to the commission, alternative plans have given employers the power in essence to act as a legislator and impose unlimited restrictions on which injuries will be eligible for compensation.

Powerful Workers’ Compensation Advocacy in Atlanta

If you are in need of strong legal advocacy to help you with a workers’ compensation issue of your own, the knowledgeable Atlanta attorney at Douglas F. Kaleita, P.C. can represent your interests and fight to secure a favorable outcome on your behalf. With more than 25 years of proven legal experience, we can maximize your chances of securing the benefits you deserve and ensure your rights are protected.

If we do not win, you do not pay – call (888) 665-7699 or schedule a free consultation today.

Categories: Workers' Compensation