Okla. House Passes Comprehensive Comp Reform

March 4, 2005

The Oklahoma House of Representatives on Thursday passed comprehensive workers’ compensation reforms which will result in economic development opportunities for the state, according to the American Insurance Association (AIA).

“This legislation is a major step towards meaningful reform and a positive solution for keeping jobs in Oklahoma and for attracting new business to the state,” said John Marlow, AIA assistant vice president, Southwest Region. “Working Oklahomans are not just losing job opportunities, but are being denied the appropriate compensation for their injuries by the current system that rewards lawyers and punishes both employers and employees.”

House Bill 2046 addressed four major reform areas:

1) Increased benefits for workers

• Helps injured workers get the money and fast medical treatment they deserve.
• Increases death and burial benefits.
– Death: Increased from $20,000 for a spouse to $100,000 and from $5,000 for surviving children to $25,000 for a surviving child.
– Burial: Increased from $5,000 to $10,000.

• Increases benefits for disfigurement from $20,000 to $50,000.
• Increases “take home” benefits for injured workers by avoiding attorneys’ fees through early resolution.

2) Reduced legal costs

• Establishes an ombudsman process and encourages mediation for resolving claims early, before legal action is filed.
• Attorneys are paid fees only on the amount they obtain for a client above the settlement offered by the employer (value-added fees).
• No more “dueling doctors” that fuel lawsuits and increase costs.

3) Reduced medical costs for workers & increased workplace safety

• Provides employer choice of physician.

– Employers offer three physicians from employer plan.
– Employee chooses one physician from network.
– Court defers to the treating physician.

• Encourages enrollment in certified workplace medical plans.
• Ensures that heart-related, aging-related, and cumulative injuries are clearly proven workplace injuries.
• Contains a $1,000 tax exemption for any company in the state that uses the Safety Pays program.

4) Increased marketplace competition

• Helps create a more competitive market for workers’ comp insurance by moving to a use-and-file system for rate approval that will allow the market to set workers’ comp rates.
• Provides for state health department to conduct site visits to review certified workplace medical plans.
• Helps struggling small businesses who will no longer be crippled by high insurance costs.
• Transforms CompSource into a private company.

“These measures should dramatically lower the outrageous cost of workers’ compensation in Oklahoma without lowering the benefits to injured workers or affecting reimbursement to treating physicians,” said Marlow. “We are ready for a fight in the Senate but we are confident we can bring real reforms to this antiquated system that will benefit everyone.”

HB 2046, sponsored by Speaker of the House Todd Hiett (R) and House Judiciary Chairman Fred Morgan (R), passed the Oklahoma House by a bipartisan vote of 59-37.

The bill has been referred to the Senate for consideration.

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