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TXANS Association of Responsible Nonsubscribers

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TXANS's News/Press Releases

09/19/2013

LAWSUIT CHALLENGES NEW OKLAHOMA WORKERS COMP AND OPT OUT LAW

Two legislators and a state firefighter's association have filed a lawsuit challenging Senate Bill 1062, the new Oklahoma workers' compensation law passed earlier this year. Senate Bill 1062 replaces the existing court-based workers' compensation system with an administrative scheme and introduces a workers' compensation option for certain employers.

The "option" passed in Oklahoma is similar to the Texas nonsubscriber option but with notable differences. For example, in Oklahoma employers must provide the same form of benefits as they would if they purchased workers' compensation and in exchange, the employer's benefit plan becomes the employee's exclusive remedy. While Texas nonsubscribers can and do take steps to mitigate tort exposure, exclusive remedy is not available in Texas for those employers that operate outside the state's traditional workers' compensation system.

When asked about the suit, Governor Mary Fallin stated "I'm disappointed with the legal challenge filed today to Senate Bill 1062, just two weeks after an independent evaluation shows the measure will result in a nearly 13 percent reduction in overall workers' compensation premium levels next year." In contrast, Senator Harry Coates (R-Seminole) commented "As a longtime businessman, I recognize that it's necessary to have workers compensation rates as low as possible. In fact, I believe we need a workers compensation administrative system, just not the unconstitutional and unworkable system created by Senate Bill 1062."

One of the primary arguments in support of the Oklahoma challenge is that the law violates a state constitutional requirement that a bill address a single subject. Those challenging the law contend that provisions concerning the "opt out" and workers' compensation are two separate matters and therefore violate the state's single subject rule.

Not withstanding any delay, most of the workers' compensation changes as well as the "opt out" option are set to become effective on February 1, 2014. However, just days ago, the Oklahoma Legislature convened in special session to address lawsuit reform after the state's Supreme Court ruled the law unconstitutional because of the single subject rule.

Oral arguments on the constitutional challenge are set for Oct. 16, 2013.

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