Increasing Employee Choice Could Lower OK Worker Comp Costs
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Among the 10 highest among the 50 states
Oklahoma City, OK (CompNewsNetwork) - Giving employees the opportunity to choose a traditional health insurance policy with a supplement instead of a workers compensation policy could increase benefits while saving money, state lawmakers were told today.
Randy Kyler, owner of Sooner Construction in Ponca City, told members of the House Economic Development and Financial Services Committee that he pays a workers’ compensation rate of 18 percent to 19 percent, or about $570 to $600 per month to cover only one carpenter earning $18 per hour.
That $600 bill does not include the separate cost of a health insurance policy for the same employee.
In comparison, under his company’s health insurance plan, it costs just $636 per month to cover a family of four. That health insurance policy can be augmented with a wage supplement package to cover lost wages due to injury, for a total cost of $750 to $800 per month.
Kyler told lawmakers it would make more sense to allow workers to choose coverage through the health policy and supplemental instead of workers compensation.
"I think we ought to give our employees an option," Kyler said. "If I’m married with two kids and I can get health insurance coverage for all four of us, plus coverage for hospitalization if I am injured, and it won’t cost me a dime, why would I not choose that over a workers’ comp policy? This is a simple plan that could actually increase the benefits to workers while cutting costs for employers by a significant margin."
He noted other states have implemented similar plans.
On the other hand, Oklahoma’s current workers comp system is not working, Kyler said. He noted Oklahoma’s workers comp rates are typically among the 10 highest among the 50 states, while providing some of the lowest benefits for injured workers and involving the most litigation.
Kyler said a friend with a trucking business employing 150 drivers in both Kansas and Oklahoma pays far more to cover his Oklahoma drivers.
"Buying insurance from the same company for both sets of drivers, he pays $13.89 per $100 wages in Oklahoma, while paying just $8.36 per $100 for his Kansas drivers – 5.5 percent cheaper," Kyler said. "If you’re employing 150 to 200 people, you’re talking about spending a lot more money each year in Oklahoma. It makes it real easy for companies to decide they’re going to go to Kansas – not Oklahoma – to open a business."
State Rep. Eddie Fields, who requested the legislative study, said Kyler’s proposal deserves consideration.
"This plan could simplify insurance coverage and eliminate administrative duplication while expanding benefits at a lower cost," said Fields, R-Wynona. "I think the proposal needs to be explored, potentially through a pilot program that would allow us to gather concrete data on employee health benefits, worker productivity, and cost savings."
Fields said he plans to file legislation on the issue that will be considered in next year’s legislative session.
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