Labor Secretary Calls Workers’ Comp Opt-Out Plans A “Pathway To Poverty”
The United States Department of Labor Secretary jumped into the national opt-out debate this week in a big way. In an interview with National Public Radio, Labor Secretary Thomas Perez argued that non-subscription programs undermine the grand bargain that forms the basis for workers’ compensation programs in the United States. Secretary Perez said that the Labor Department is commissioning a report about the opt-out trend and cutbacks in workers’ comp benefits “to document the precise nature of this problem across the country.”
Perez says the probe focuses on a practice by thousands of employers in Texas and Oklahoma to opt out of conventional state workers’ compensation in favor of benefits plans that provide lower and fewer payments, make it more difficult to qualify for benefits, control access to doctors and limit independent appeals of benefits decisions.
“What opt-out programs really are all about is enabling employers to reduce benefits,” Perez says. Opt-out programs “create really a pathway to poverty for people who get injured on the job.”
Texas and Oklahoma currently allow employers to choose whether to participate in their state-sponsored workers’ compensation programs. Oklahoma has an “opt-out” program; Texas has an “opt-in” program. Legislators in Tennessee and South Carolina have proposed legislation in the past two years to develop similar programs in those jurisdictions, although neither state’s efforts has yet succeeded in passing such a law.
FOLIO
