According to a report by national workers’ comp guru Bob Wilson workers’ comp “opt-out” legislation is dead in Tennessee for this legislative session. The loss is a big blow to opt-out advocates who had long made it known that Tennessee was ground zero for their efforts. This is the second time workers’ comp “opt-out” advocates have fallen short in Tennessee.

Opt-Out is a an effort to replace state workers’ compensation systems with private, largely unregulated disability and health plans. Large employers are allowed to “opt-out” of otherwise compulsory workers’ comp if they show they will provide alternative medical and wage replacement benefits. The movement is underwritten by a number of very large employers, including Walmart. Currently only Oklahoma and Texas have opt-out systems.

NPR and Propublica recently obtained and evaluated more than 120 opt-out plans from Oklahom and Texas. Their analysis revealed among other things:

We found widespread differences in benefits among employers, and restrictions and requirements that make it easier for employees to be denied coverage. Among the details in some employer plans:

  • Brookdale Senior Living, the nation’s largest chain of assisted living facilities, does not cover most bacterial infections.
  • Costco pays up to $600 for external hearing aids, while the cheapest model for sale at Costco costs $900.
  • U.S. Foods, the nation’s second-largest food distributor, excludes any sickness or disease “regardless of how contracted,” potentially allowing the company to dodge work-related conditions such as heatstroke, chemical exposures or cancer.
  • Managers at Taco Bell can accompany injured workers to doctor’s appointments.
  • Sears and many other companies can deny all benefits if workers don’t report injuries by the end of their shifts.

The analysis also found that many plans in Texas cover medical care for only about two years, whereas workers’ comp pays as long as necessary. Plans exclude payments for things like wheelchair vans and chiropractors or for injuries caused by exposure to silica dust, mold or asbestos. Appeals are often controlled by employers.

“What is being allowed is the employer to have absolute and complete control over every aspect of the system,” says Rick Levy, an attorney for the Texas AFL-CIO. “No negotiation. No compromise. No standards. No due process.”

Most of the opt-out plans we reviewed in Texas — officially known there as “non-subscription” plans — strictly limit payments for catastrophic injuries and deaths on the job. That’s what Meloy encountered when her husband died.

Bob Wilson, who reported the workers’ comp “Op-Out” failure in Tennessee, is the President and CEO of and a frequent speaker on workers’ compensation issues nationally. Bob “brings a strong employer and corporate voice to the workers’ compensation arena.”  In his article he notes that “Opt Out, as it is being implemented and proposed, is a bad idea that just got what it deserved. Congratulations to the citizens of Tennessee. Opt Out’s loss is a big win for them.”

At its heart workers’ comp “opt-out” is an effort to shift the cost of injured workers from employers, who benefit from the injured worker’s labor, to government programs and the public at large. This will become apparent as the “opt-out” experiments in Texas and Oklahoma play out.

Kevin Bunn is a Board Certified Expert in NC Workers’ Compensation Law. Please call or email for your free consultation with NC Workers’ Comp Attorney Kevin Bunn.

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