Governor Mary Fallin signs historic Workers’ Comp Reform

Governor Mary Fallin

Governor Mary Fallin today signed into law Senate Bill 1062, a bill that reforms the workers’ compensation system in Oklahoma.  The bill, by Senate President Pro Tem Brian Bingman and House Speaker T.W. Shannon, seeks to reduce costs for businesses. It moves the state from a court-based workers’ compensation system to an administrative system, allowing for more timely processing of claims and reducing the adversarial nature of the process for both workers and employers.

“For decades, Oklahoma has had one of the most expensive and inefficient workers’ compensation systems in the country, a constant obstacle for business owners looking to expand operations or create more jobs,” Fallin said.  “Senate Bill 1062 completely overhauls our flawed workers’ comp system, dramatically reducing the costs to businesses and freeing up private-sector resources that can be invested in jobs rather than lawsuits. Additionally, our reforms ensure injured workers are treated fairly and given the medical care needed to return to work.  This is an important pro-growth policy that will help us attract jobs and build a stronger and more prosperous Oklahoma.  My thanks go out to Pro Tem Bingman, Speaker Shannon and the entire Legislature for sending this bill to my desk.” Bingman, R-Sapulpa, said, “Oklahoma’s runaway workers compensation court has been the number one roadblock to job growth for decades, and today, we’re finally putting the brakes on these costs. Replacing our broken workers’ compensation system is historic.  The Administrative Workers’ Compensation Act sends a clear signal to job creators that Oklahoma is truly open for business.  This bill is especially needed to help us control the year-to-year fluctuation of costs, and to help us compete for good manufacturing jobs while making sure injured workers are treated fairly.  I want to thank the members of the state Senate for their tireless work on this important issue.  Also, I want to thank the Governor and Speaker Shannon for working with me to pass a historic pro-growth initiative.”

Shannon, R-Lawton, said, “Oklahoma has finally found a modern solution to an old problem. For too long, workers and businesses have been subjected to an archaic and inefficient workers’ comp system. This monumental shift from an adversarial judicial system to an administrative system will lower costs for businesses and get injured workers the quick relief they need.”

Senate Bill 1062, Workers’ Compensation Reform

Changes Oklahoma’s workers’ compensation system from judicial to administrative

• 3 Commissioners appointed by the Governor

• One commissioner selected from a slate of 3 submitted by the Speaker

• All commissioners confirmed by the Senate

• Commissioners may be reappointed upon expiration of term

• Administrative Law Judges hired by the commissioners

• Court of Existing Claims created to handle current cases

Official Disability Guidelines (ODG) becomes the primary standard of reference for medical treatment

Temporary Total Disability (TTD)

• 70 percent of the employee’s average weekly wage up to 70 percent of state’s average weekly wage for 104 weeks

• No TTD payment for first 3 days

• Additional 52 weeks of TTD may be claimed upon showing of medical necessity by clear and convincing evidence

Temporary Partial Disability

• 70 percent of the difference between the injured employee’s average weekly wage before the injury and the weekly wage for performing alternative work, only if that wage is less than the TTD rate

• Payment for up to 52 weeks

Permanent Partial Disability (PPD)

• Awards may not exceed a disability rating of 100 percent to any body part or body as a whole

• Compensated at 70 percent of the average weekly wage, not to exceed $323/week or 350 weeks

• Awards held in reserve based on whether an employee can return to his or her pre-injury job or an equivalent

• If an employee returns to his or her job, but is dismissed for any reason other than misconduct, the balance of the PPD award is remitted in lump sum

•  If employee refuses an offer to return to his or her pre-injury job or an equivalent, the PPD award is deferred and reduced by 70% of their average weekly wage for each week they refuse to return

• Awards of PPD and PTD are reduced by the amount of pre-existing disability

Benefits for amputations and spousal death are returned to current law A closed drug formulary with an appeals process is created Employee allowed a one-time change of treating physician upon permission by the Commission. The replacement physician is selected from a list of three doctors provided by the employer Employees must notify employers of an injury (not occupational disease) within 30 working days of the injury’s occurrence Attorney fees

• 10 percent on TTD claims

• 20 percent for all other claims

• 10 percent on vocational rehab services

Oklahoma Option

• Employers must include the same level of benefits as provided in the comp law

• Employees may appeal rulings to the Commission

Arbitration

• Allows employers to set up an arbitration process for disputed claims

• Employees may appeal rulings to the Commission

Effective date of Feb. 1, 2014 (some sections go into effect 90 days after sine die)