In 2014 Oklahoma enacted a radical change to its workers’ compensation statute, and on September 13, 2016, the Oklahoma Supreme Court held that it violates the state constitution. The case is Dillard’s, Inc. v. Vasquez, 2016 OK 89. Some version of the Oklahoma legislative plan might be considered by the Wisconsin Legislature. This article explores the structure of what the Oklahoma Supreme Court majority opinion termed the “Opt Out Act.”
Oklahoma enacted a dual workers’ compensation scheme on February 1, 2014. In doing so, the legislature repackaged its long-standing traditional workers’ compensation program to become known as the “Administrative Workers’ Compensation Act” (AWCA) and created the “Oklahoma Employee Injury Benefit Act” (referred to in the majority opinion as the “Opt Out Act” and in the main concurring opinion as the “OEIBA”). Whereas the AWAC is a traditional statutory workers’ compensation act, the Opt Out Act is an employee welfare benefit plan operated under the Employee Retirement Income Security Act of 1974 (ERISA). Under the new law Oklahoma employers were required to select one or the other. Opting out of workers’ compensation entirely was not allowed.
Generally speaking, self-funded employee welfare benefit plans under ERISA are devised so as to vest the plan sponsor with maximum discretion to establish what benefits may be eligible for award. Claims administrators are sometimes appointed to review claims submitted by the beneficiary, here, the injured worker, although in some cases the employer is the claims administrator. The “hearing” is typically a paper review, not a contested case with adverse testimony. Likewise, appeals are usually a paper review. Decisions of the appeal adjudicator are final and...
