Oklahoma Opt Outs and ERISA

Oklahoma Opt Outs and ERISA

Proponents of the recently passed Oklahoma workers’ compensation reforms proclaim that the opt out provisions provide an alternative to the newly formed administrative system for processing injured worker claims and do not require that alternative benefit plans be subject to ERISA or other federal laws. While it is true that, unlike the 2012 proposed legislation for opt outs, there is no ERISA oversight requirement specified in the 2013 legislation, it is expected that many private employers who opt out will utilize the ERISA structure. This intertwining of federal law and state law will no doubt lead to incongruous situations.
The enrolled version of Oklahoma S.B. 1062 contains provisions under the so-called “Oklahoma Employee Injury Benefit Act” (Secs. 107-120 of the Act) that enable both private and public employers to opt out of the state workers’ compensation system by creating their own written benefit plan. Such plan must essentially provide benefits that are equal to or greater than that under the state workers’ compensation system, as well as provide other specified features offered under the state system. Other notable features of the Oklahoma Employee Injury Benefit Act include:
--The Oklahoma Insurance Commissioner will regulate notification procedures, data collection, reporting, bonds, etc. related to qualified employers who can opt out of the workers’ comp system as well as procedures related to self-insured qualified employers.
--A qualified employer or its insurer must comply with any applicable federal law regarding the administration of the benefit plan and claims for benefits under such plan.
--If a claim is denied under the benefit plan, the claimant can seek redress from an “appeals committee” as part of the plan, and then if still unsatisfied, file an appeal with the Workers’ Compensation Commission sitting en banc.
--The Commission en banc shall act as a court of competent jurisdiction under 29 U.S.C. § 1132(e)(1) (ERISA civil enforcement regarding benefits due under a plan, rights under a plan, and rights to future benefits under a plan).
--The claimant can appeal the Commission’s decision to the Oklahoma Supreme Court.
--Qualified employers and their employees have exclusive remedy protection relating to negligence and other causes of action, but not intentional torts.
--All intentional tort or other employers’ liability claims may proceed through the appropriate state courts, mediation, arbitration, or other form of alternative dispute resolution or settlement process available by law.
Governor Fallin is expected to sign S.B. 1062.
Has S.B. 1062 effectively protected state rights this time? We know from experience that there is often a dichotomy between the advertised impact of reforms and the actual implementation of those reforms by the legal system. Clearly, S.B. 1062 is not the last word.

Recommended Reading
Professors: Major flaws in Oklahoma workers’ comp bill, by John F. Burton and Emily A. Spieler (The Oklahoman, May 3, 2013).
Attorney: Work comp opt-out provision a slippery slope for taxpayers, by Bob Burke (The Oklahoman, April 14, 2013).
Legislator: Savings in workers’ comp bill come at expense of injured workers, by State Rep. Richard Morrissette (The Oklahoman, May 4, 2013).
Work Comp Analysis Group on LinkedIn: "Oklahoma Workers' Comp Reform Bill With Opt Passes House" (LinkedIn registration required).
LexisNexis and ALM Publications
Employee Benefits Guide (Publisher: LexisNexis). Provides detailed analysis by experts on ERISA, COBRA and other laws, and fiduciary responsibility under ERISA.
ERISA: Principles of Employee Benefit Law, by Peter J. Wiedenbeck. (Publisher: LexisNexis). Analyzes key cases, features, and the structure and internal relationships of employee benefit law.
Employee Benefits Law: ERISA and Beyond (Publisher: ALM). Takes you step-by-step to help ensure that your plans are properly structured, qualified and implemented.
Mealey’s Litigation Report: ERISA (Publisher: LexisNexis). Follows the litigation surrounding the enforcement of provisions of ERISA.