More Scrutiny for Oklahoma’s Workers’ Compensation System

Three years after passage of sweeping legislation that revamped Oklahoma’s workers’ compensation system, courts are scrapping significant parts of the law in decisions that say the regulations violate the state constitution and do not provide adequate protection to workers.

The new regulations were touted by the Republican-controlled Oklahoma Legislature as a way to reduce the cost of workers’ compensation insurance for employers and improve health outcomes for injured workers by moving the workers’ compensation system from an adversarial court-based system to an administrative one.

But since the new law went into effect on Feb. 1, 2014, 38 provisions have been found unconstitutional, invalid or inoperable. And while dozens more challenges remain pending before state trial and appeals courts, including the Oklahoma Supreme Court, a new research report on the cost and efficacy of workers’ compensation systems in all 50 states and Washington, D.C., says that while the cost of workers’ compensation insurance in Oklahoma has declined since the new law went into effect, the cost is still high compared to other states and the level of benefits to injured workers has plummeted.

The report by the National Academy of Social Insurance, a nonprofit, nonpartisan organization made up of the nation’s leading experts on social insurance, states that between 2010 and 2014, total workers’ compensation benefits paid per $100 of covered wages decreased by 52 cents. But employer costs per $100 of covered wages decreased by just 21 cents.

Total workers’ compensation benefits paid between 2012 and 2014 declined more than 22 percent, more than any other state, according to the report. Between 2010 and 2014, Oklahoma ranked 48th in workers comp costs per $100 of covered wages, ahead of only Ohio, West Virginia and Montana.

“We have the lowest benefits in the nation,” said workers’ compensation attorney Bob Burke of Oklahoma City. Burke, who has filed constitutional challenges to portions of the new law, including one that led to a decision by the Oklahoma Supreme Court last month striking down the statute’s “opt out” provision that gave employers the right to create their own system for compensating injured workers. The court said that was an unconstitutional special law that gave employers the authority to single out injured workers for inequitable treatment.

Burke said Oklahoma’s workers’ compensation law is “filled with inconsistencies” and is “difficult to interpret.”

“It’s just terrible,” he said. “Our Legislature is ignoring the constitution when they write a lot of laws these days. They ignored the constitution when they put together this workers compensation package.”

The law’s provisions have affected injured workers, including Stan Spence of Disney, who was an operator at a chemical plant in Pryor on May 31, 2015, when a carbon dioxide compressor blew up and severely injured his face. He lost partial sight in his left eye and recently underwent a third surgery to reconstruct his nose.

Before the injury Spence earned about $1,200 a week. But his benefits under the new law’s temporary total disability provision are no more than $571 a week.

“I can’t even pay all of my bills,” Spence said. “My house is almost in foreclosure. My wife’s credit is completely ruined.”

“I’ve still got a couple of problems in my face that need to be fixed. And I’ve only got six more months to be on workers comp,” he said. Another major surgery will require at least that long to recover from, he said.

An oil field worker, Ray Graham of Dover, suffered a hernia in February while lifting tires and wheels off a floor and has twice had surgery to repair it.

“They paid me for six weeks,” Graham said. ,I’ve got no money coming in. I was having to borrow money to get by.”

“My benefits should have never been cut off. But under Oklahoma law, it says six weeks for hernia surgery – that’s all,” he said. “I think it was negligent all the way around.”

Supporters of the law say that in spite of the problems, most of the statute is still in place and working.

Gov. Mary Fallin, who signed the law into effect, said that the National Council on Compensation Insurance last month filed an overall loss cost level decrease of 10.2 percent for next year.

“Over the past three years, these annual filings have totaled a reduction of 47.4 percent,” Fallin said in a statement. “We have seen the rate of claims fall by two-thirds, employees returning to work quicker and costs to employers reduced dramatically.”

“Rates have gone down every year since the workers comp bill was enacted,” said Rep. Jon Echols, R-Oklahoma City. But some provisions of the state’s workers’ compensation law may need to be changed, Echols said.

“When costs come down, we need to look at increasing benefits,” he said. “We were charging employers too much and our employees were not getting well. That’s what we need to fight.”