The Debate over Privatizing Workers’ Compensation

For well over a century, state and federal workers’ compensation laws, have provided employees and employers with a mutually beneficial means of resolving disputes following injury or death caused due to workplace-related accidents. It ensures that medical expenses and lost wages for workplace injuries are covered, and provides compensation for permanent injuries, while allowing employers to avoid admitting fault, eliminating the need for the claimant to prove fault, and limiting the recovery of awards for pain and suffering and punitive damages. In short, each side gives up some rights, but gains others. While reformative measures have led to both limitations and expansions on workers’ comp laws, a new plan seeks to completely reinvent the system by allowing employers to ‘opt-out,’ the result of which would essentially permit employers to create their own contractually-based rules and regulations for handling claims.

Currently, only two states—Texas and Oklahoma—have privatized workers’ compensation, but campaigning efforts, backed by some of the nation’s largest and most influential corporations, are pushing for similar opt-out laws in several other states across the nation.

Certainly, we understand taxpayer concern over the proliferation of fraud within the system. At the same time, though, we have several practical concerns over whether privatizing a century-old system is the best approach to resolving these issues. For those that have never been injured or lost a love one in a workplace incident, it may be difficult to consider the issue from the perspective of an aggrieved claimant, as opposed to simply a taxpaying citizen. However, this consideration is a necessary one, given the potentially devastating impact that such extreme reformative measures could have upon injured workers.

Imagine being injured in a workplace incident…

Wouldn’t you want freedom in selecting your doctor? Would it alarm you to discover that certain injuries are altogether excluded, and others have strict limitations as to payout amounts? What if you required lifelong care, but your treatment period was limited to mere months or years? What if you suffered a catastrophic or permanent injury for which no compensation was available? What if you relied on your spouse’s income for support, and following their workplace fatality, were denied or limited death benefits? Under opt-out plans, workers could lose many of the rights, options, and benefits they would have been provided under traditional worker’s compensation laws.

Now, let’s get more specific, using an example provided by Probublica and NPR, in an article discussing opt-out plans currently in place in Texas, and an accident involving the loss of a finger…

If you worked at Walmart, you’d get $25K for finger loss, and $15K if you worked at Costco. This is because Walmart limits compensation for dismemberment to $250,000, and Costo $150,000, and both corporations consider accidents involving the loss of a finger (or toe) to be only 10% compensable.

Are all fingers and toes really that equal? Compare the loss of pinky toe that doesn’t affect ability to walk versus loss of big toe that does, or vice versa. Consider the loss of pinky finger on non-dominant hand, versus loss of thumb or index finger on dominant hand. Is the loss of a finger or toe really this quantifiable? We think not.

And, if you lost an entire foot or hand—you guessed it, just multiply the 10% value placed upon each digit by five, for a total of 50% compensable loss.

In fact, under either company’s schedule of losses, entitlement to 100% of maximum benefits requires loss of both hands, both feet, a combination of 1 foot or 1 hand; OR a foot or hand with loss of sight; OR your speech or hearing. Yet, the examples discussed herein are just a handful of the ways in which current opt-out plans work to limit and restrict benefits for injured workers. Just imagine how restrictive opt-plans could potentially be in the future, under a privatized system that lacks sufficient regulation by state and federal government.

As workers’ compensation lawyers, we take issue with the combined impact that campaign and/or lobbying contributions of large corporations, along with their biased investigative “research” studies, often have upon lawmakers. Equally concerning is the potential impact on public perception when the only data they are provided with comes from the proponents of opt-out plans that seek to privatize workers’ compensation. While we are not ignoring that there are flaws in current workers’ compensation laws, we do not feel that replacing the system altogether, and allowing for privatization, rather than making reforms within the current system, would best serve the interests of our nation’s injured workers.

If you or a loved one have a question, concern, or dispute regarding a workplace-related incident, we urge you to contact the Chicago Workers’ Compensation Lawyers of Zneimer & Zneimer P.C. to discuss your rights and options.