NPR Explores Disparities in Workers’ Compensation Options
A recent episode of NPR’s Morning Edition highlighted disparities in access to workers’ compensation for work-related injuries. Due to state employer opt out provisions in workers’ compensation laws, 1.5 million workers in Texas and Oklahoma lack workers’ compensation coverage if they become injured or significantly disabled while on the job. Although state employers who opt out still must provide workplace injury plans that comply with workplace benefits protections in the Employee Retirement Income Security Act (ERISA), in practice these alternative plans may not sufficiently protect employees who become disabled.
Under Federal ERISA law, employees who seek to enforce their rights under these alternative workplace injury plans must prove that their employer’s administration of the plans is “arbitrary and capricious.” Courts only reject benefits decisions if the decision is “unreasonable” or contrary to the terms of the plan. In practice, this means that employees rarely prevail in Federal court. Employees whose ERISA claims are rejected must pay the legal expenses of their employers. If the employee was able to sue under a state workers’ compensation plan, the employee would receive an independent review of the case in state court and can receive pain and suffering damages they cannot receive in Federal court. State-regulated plans also typically lack the required arbitration and required settlement clauses of employer-regulated workers’ compensation plans.