Opt-Out Model: Arkansas May Follow Lone Star State


By Angela Underwood

Little Rock, AR (WorkersCompensation.com) – Opt-in or opt-out of workers’ compensation is the question Sen. David Sanders (R-Little Rock) is proposing.

If passed, SB 653 would establish an elective alternative structure to both finance and administer benefits for workers’ compensation claimants separate than what exists now.

What exists now is diluted, according to Esquire Bob Buckalew, out of Little Rock. “The workers’ compensation in Arkansas has been so diluted, I don’t know how you can dilute it anymore,” said the attorney, who has practiced for 38 years.

The notion of the bill is completely unacceptable, according to Fred Bosse, southwest vice president of American Insurance Association, based out of Washington.

“SB 653 appears to represent a last-minute approach to resurrect an alternative workers’ compensation system that cannot deliver on its promises,” Bosse said in a Business Insurance report, adding if enacted, “the bill would create two separate and unequal classes of injured workers.”

But Texas insurance does deliver, according to Ben Gonzalez, spokesperson for the Department of Insurance. 

“First, I want to provide some background on the Texas workers’ compensation model. It’s not an opt-out model. Since the earliest days of workers’ compensation, Texas has made workers’ compensation optional for most employers,” Gonzalez said in an email to WorkersCompensation.com.

“Employers that “opt-in” by providing workers’ compensation coverage must follow state rules and laws and are regulated by our Division of Workers’ Compensation. State law shields employers from damages claims based on general negligence if they provide workers’ compensation. Texas law does not give that same protection to employers that don’t provide coverage,” Gonzalez said.

According to the Texas Policy Foundation, the opt-out model is a success, reporting the positives in the Lone Star State Model for Helping Injured Workers. Bosse disagrees that the Texas workers’ compensation system is an opt-out system.

“That is simply not true. Texas has an opt-in model, where employers have the option to opt into the system. The strength and stability of the Texas workers’ compensation marketplace is due to the reforms that were enacted in 2005,” he said in a press release.

Gonzalez said “the Texas system is a model for the nation because of significant improvements we’ve made in our workers’ compensation system.”

“Workers’ Compensation Commissioner Ryan Brannan emphasizes a model of continuous improvement and constant focus to be better. We’ve made changes that have reduced cost, helped the system operate more effectively, and protected injured employees,” he said, adding injury rates in Texas are the lowest they’ve been in 25 years and below the national average. 

With a steadily rising return-to-work rate, below national average medical costs and decline in workers’ compensation, Gonzalez said the system in place is strong. Rating at 49 out of 51 states in the 2016 Oregon Workers’ Compensation Premium Rate Ranking Summary, Buckalew said if anything should be discussed it should be scheduled wage loss and disability benefits.  

In a press release, Bosse said the Texas system and additional opt-out are models of a non-mandatory workers’ compensation system, raising policy questions on several issues including “uniform protection of workers and the employers,” as well as a work-related injury that is unvarying “regardless of employer; no cost shifting to other benefit programs or to public benefit programs.” 

Again, Buckalew said the “diluted workers’ compensation” is secondary to the public’s concern with education, public safety and roads. “Either you have a workers’ compensation that works and you do away with it and employers are free reign for suit, because you can’t have it both ways,” he said. “You either have a system that protects injured employees or you don’t. If you take away benefits you are further diluting it. People should not have to go through a hassle when they are hurt on the job.”

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