by Jennifer M. Smith, Esq.

Recently, Oklahoma’s Governor signed into law a program that will allow employers to establish alternative plans to the state’s workers’ compensation system as long as the plans provide benefits equal or greater to the state’s workers’ compensation benefits. If the plans fail to do so, injured employees would be able to seek recourse from a new Oklahoma Workers’ Compensation Commission that the law also establishes.

According to recent articles in both Property Casualty 360 and Business Insurance, advocates of the law project that these alternative programs will reduce workers’ compensation costs by $125 million, or 12.5%, annually. The projected savings will come in large part from reduced administration costs from increased efficiency as the programs will be centered on an administrative dispute resolution system versus a court based system. In addition, the programs should promote increased communication between employers and injured employees and increased efficiency in the referral process.

With this law, Oklahoma joins Texas as the only other state that allows for an alternative program to a state run workers’ compensation program. Tennessee considered such a program last year, but ultimately rejected it. As workers’ compensation costs rise, other states will undoubtedly look closely at how the alternative program fares in Oklahoma.