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Insurance Department Rolls Out the Oklahoma Option

Insurance Department Rolls Out the Oklahoma Option

Ever since the Oklahoma Legislature enacted sweeping reforms to the state workers compensation system in the spring of 2013, the Oklahoma Insurance Department (OID) has been busy drafting the regulations and procedures that will carry out the new laws. In November, the OID unveiled a draft of the new rules, opening them up for public comments and a hearing in December.

The new rules focus on what the OID calls the Oklahoma Option — a new provision that allows employers to opt out of the state workers comp system and establish their own program for compensating employees injured on the job. According to the new rules:

  • An employer can be deemed a “qualified employer” by submitting an electronic form to the OID, along with a $1,500 fee and proof that the employer has the capability of providing coverage to its workers.
  • The employer must submit a written benefit plan and a statement explaining how employees will be notified of the change.
  • The employer may self-fund its compensation plan or may buy coverage from an insurance carrier. Those that choose to self-fund must provide the state with security, such as a letter of credit or a surety bond in an amount equal to the average of claims incurred by the employer.
  • The qualified employer designation is good for an initial one-year term. Employers wishing to extend the term must reapply no less than 30 days before the expiration of the initial term.
  • If the OID finds that a qualified employer is not in compliance with the requirements of the law at any time, it may disqualify the employer.

Workers should be aware that an employer that elects to become a qualified employer is required to meet strict standards for notifying employees that the employer has opted out of the state workers comp program. Written notice must be given to current and future employees and must be posted in conspicuous locations throughout the workplace. Even so, workers who are injured on the job will likely need the help of a knowledgeable Oklahoma workers comp attorney to understand the benefits they are entitled to.

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