When a worker is injured on the job, the employer's insurance is expected to pay for damages related to the injury. Workers' comp insurance systems are created by the state, and employers are usually required to pay into these state-run benefit plans.
Texas used to be the only state that allowed employers to “opt-out” of the state-run plans, a law that dates back to the creation of workers' comp in Texas. In 2013, Oklahoma became the second state to allow employers to opt-out of the mandatory workers' comp plans. Some politicians in Tennessee hope it will become the third state.
Companies that opt out of state-run insurance plans find cheaper options in the private sector. Politicians in Texas, Oklahoma, and Tennessee that are in favor of the opt-out plan hope that it will attract businesses to the state by keeping prices down. Opponents argue that these laws prevent injured workers from getting adequate compensation for their injuries.
About 1.5 million workers in Texas and Oklahoma receive benefits from private insurance plans after their companies opted-out. But multiple independent studies have found that coverage from these private plans varies widely and often comes with many restrictions.
A study by NPR found that one companies will not cover bacterial infections, another pays $600 for hearing aids though the cheapest available pair costs $900, and one legally allows managers at the company to attend the doctor appointments of injured workers. Many companies have clauses that allow them to deny benefits to an injured worker if the worker fails to report the injury by the end of the shift.
These private plans, sometimes called “non-subscription plans”, also have strict limitations on the amount of money paid for severe injuries and deaths. A study by Pro Publica details the amount of money paid by companies with non-subscription plans for catastrophic injuries to different body parts. In Texas, a catastrophic foot injury can result in damages between $25,000 and $1 million depending on the private insurance used by the company. Many plans do not specify amounts, allowing further variances in damage payments.
In Tennessee, the charge for these non-subscription plans is headed by two lawmakers, Sen. Mark Green and Rep. Jeremy Durham. Both failed to get the bill passed in their own chambers in 2015, but hope to get the bill approved this year.
The bill may face further setbacks in the state after recent news of a scandal broke about Rep. Durham; three women have accused Durham of sexual harassment via text message. A recent hearing on the insurance bill was canceled after news of the scandal broke.
Government controlled workers' comp insurance has been around for over 100 years and has faced few changes. Some health care groups argue that the plans do not do enough for injured workers, but few argue that the plans are too generous and need the kind of restrictions offered by opt-out plans.
Though Tennessee's bill is on hold, some lawmakers in South Carolina have recently taken interest in opt out workers' comp. A tide of states passing similar bills could have an effect on the success of Tennessee's bill, voters will have to wait and see.