OKLAHOMA CITY – State Labor Commissioner Leslie Osborn said her agency’s Occupational Safety and Health Administration training fund has “shrunk” because of dramatic changes to Oklahoma’s workers’ compensation system.
With enactment of Senate Bill 1062 in 2013 by the Republican-controlled state Legislature, workers’ comp in Oklahoma switched from a court based system (renamed the Court of Existing Claims) to an administrative system (the Workers’ Compensation Commission). The two systems have been operating side-by-side since February 1, 2014, but the court-based system is to be disbanded on July 1, 2022.
WCC Chairman Mark Liotta said the change has had a dramatic and positive effect. According to the Republican former legislator from Tulsa:
• Filing of injury dispute cases has been slashed by more than 50% since 2013, and that rate has been maintained every year since. The WCC “has never reached more than 8,000 claims per year,” Liotta said, while the court-based system averaged almost 16,000 claims per year in 2001-2012.
• The average adjudication time for a disputed injury case has declined by more than 50% since 2013.
• The disposition of cases which avoid expensive trials is now five times the number which require trial or appeal, and cases going to mediation have increased threefold, climbing to 1,742 in 2019.
• The filing of appeals to WCC administrative law judge rulings has fallen more than 90% from the average filings of the old court, and have maintained that rate every year of the WCC. Appeals plunged from 1,207 in 2004 to 119 in 2019.
• Full-time equivalent employees required to provide an increase in services since 2013 has declined 36%: from 72 Court employees to 46 Commission employees. “And we staff two regulatory divisions, which the Court did not,” Liotta added.
• The insurance underwriters’ estimate of injury loss costs for Oklahoma businesses has dropped by more than 60%.
• The average cost of premiums for Oklahoma businesses, governments and schools is down by one-third (more than $300 million annually): from $961.5 million in 2013 to $642.2 million in 2019.
• In what was previously a stagnant insurance market, 59 insurers have returned to the Oklahoma workers’ compensation market over the last six years, the bulk of them in the last three years.
The costs of workers’ comp in Oklahoma have declined in the last seven years even after some sections of the reform legislation were overturned by the state Supreme Court.
“Several sections of the law were overreaches,” Liotta said.
“Some of the provisions were unreasonable, unworkable and unconstitutional. And some provisions were modified with follow on legislation. But we have reached a level of equilibrium and the workers’ comp law is working.”
From 2012 to 2016, Oklahoma went from being ranked worst in the nation in growing workers’ compensation costs, to first in the nation in reducing those same costs, in the “Oregon Study,” a biannual, objective, nationwide evaluation, Liotta pointed out. In 2018 the Oregon Study again ranked Oklahoma ranked first in the nation for reducing workers’ compensation costs, he noted.
The Oklahoma Insurance Department approved a 9.6% decrease in workers’ compensation insurance loss costs for 2021. The new loss costs went into effect for new and renewing policies effective January 1.
This marks the 10th consecutive year that average workers’ compensation loss costs have decreased, State Insurance Commissioner Glen Mulready said. Loss costs have declined 54% since 2011, he said. Loss costs are the average cost of lost wages and medical payments of workers injured during their employment.
“The biggest driver in bringing down the loss costs portion of premiums is what is actually paid out in claims and the reduction in the number of claims being filed,” Mulready said.