Efforts to support alternatives to state-run workers’ compensation programs have taken root in Tennessee and Oklahoma, and a new report from progressive news site
Mother Jones suggests that as many as two dozen major American corporations are working to bring that option to all 50 states.
Those corporations, which include Walmart, Nordstrom, Safeway and Lowe's, are financially supporting a lobbying group called the Association for Responsible Alternatives to Workers’ Compensation (ARAWC).
Mother Jones considers the efforts of ARAWC an attempt to gut workers’ compensation and “make it harder for workers hurt on the job to access lost wages and medical care.” However, the association itself says it is simply interested in establishing more free market alternatives to state-run workers’ compensation plans.
Under such laws, corporations would still be required to purchase workers’ comp insurance, but they would be free to craft their own policies or form nonsubscriber systems, such as the one in place in Texas.
Those against such action contend that ARAWC-supported legislation leads to outcomes unfavorable to the worker. In Texas, for example, Walmart has written a workers’ comp plan that allows the company to select the physician an employee sees as well as the arbitration company that hears disputes. The plan also does not cover asbestos exposure.
A portion of the policy also excludes coverage for asbestos exposure and coverage for employees who are injured during “participation” in an assault, unless that assault resulted from defending Walmart against theft or destruction of property. The Texas ALF-CIO contends that such language would not entitle an employee to workers’ comp benefits if he or she defended himself from attack.
Such systems “create a race to the bottom,” says Oklahoma workers’ comp advocate Michael Clingman, in which businesses attempt to save money by writing workers’ comp plans with narrow benefits and forcing competitors to do the same in an effort to remain competitive.
ARAWC is currently supporting the Tennessee Option, legislation that would give private employers the option of setting up their own injury benefit plans “subject to minimum benefit mandates, financial security review and other employee projections.”
Richard Evans, executive director for ARAWC, told
Insurance Business America the organization chose Tennessee due to the favorable political environment and relatively high workers’ comp costs.
Evan contends such plans in fact enhance benefits for employees.
“Tennessee is going to set up their guidelines, but we feel the legislation is going to give them the flexibility to have policies that require reporting of injuries in a timely fashion,” he said “[And] then medical management control…we want the employer to have the ability to send the employee to the best possible doctors.
“If you ask employers why they get good outcomes, it’s because they get their employees to the best doctors quickly, get their treatment so that it’s not delayed, and then get them back to work in a much faster fashion.”
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