Workers’ compensation typically pays hospital and medical expenses that are necessary to diagnose and treat injuries caused by a workplace accident or other work-related activity. If an employee is unable to work, temporary or permanent payments for total or partial disability can be paid at two-thirds of a worker’s salary, tax free. If someone is killed on the job, a dependent family member might be entitled to death benefits through workers’ compensation as well.
With the exception of Texas and Oklahoma, every state requires employers to carry workers’ compensation insurance to provide medical care and lost wages for employees that are hurt on the job. In exchange for these guaranteed benefits, employees usually do not have the right to sue the employer in court for damages for those injuries.
Recently, a group founded by Walmart and several of the biggest employers in America have rallied to pass laws which will allow businesses nationwide to opt out of providing workers compensation. Proponents say that allowing companies to adopt alternative plans to workers comp, such as those already in place in Texas and Oklahoma, will save companies money by removing bureaucracy and providing better medical care.
However, a study brought forth by National Public Radio last month, found that employers’ opt-out plans are not as favorable to employees when compared to workers compensation benefits. After scrutinizing states that have allowed companies to opt-out, the data suggests that injured workers receive lower work injury benefits, more restrictions and little independent oversight.
Of the two states allowed to opt-out, Texas has allowed companies to have no insurance, sometimes forcing injured workers to go to court or arbitration to obtain benefits. The Texas company programs that have been put in place, typically cut off medical treatment earlier, don’t compensate workers for most permanent disabilities and cap payouts for deaths and catastrophic injuries. In Oklahoma, companies that opt out must provide the same level of benefits as workers’ comp, but unlike workers’ comp, the benefits are subject to income and payroll taxes. The Oklahoma companies also retain their immunity to lawsuits under opt-out alternative plans.
In response to the study, a national association of state lawmakers has announced that it will investigate the burgeoning effort to let companies opt out of workers’ compensation insurance allowing them to write their own plans for how they’ll care for injured workers. A show of support from the national association would make opt-out bills much easier to pass.
If you have been injured at work, contact the Davenport Iowa Law Offices of McDonald, Woodward & Carlson for help to get your needed workers’ compensation benefits paid.