“Ugh,” “argh,” or a moan. That’s what I typically hear from injured workers when they describe their experience maneuvering the workers’ compensation (WC) system. The trouble runs the gamut from insurers refusing to authorize treatment by specialists (e.g., an orthopedist,) to insisting they return to work despite their own physicians’ opinions that doing so will cause more harm, to only being paid a portion of their lost wages.

Well, if workers have it bad under WC, an alternative system looks even worse. ProPublica’s Michael Grabell and National Public Radio’s Howard Berkes report on programs in Texas and Oklahoma where employers can opt-out of having WC insurance. “Inside Corporate America’s Campaign to Ditch Workers’ Comp” focuses on PartnerSource, a Dallas-based consulting firm that helps companies set up “injury-benefit programs.”

PartnerSource’s website explains opt-out this way:

“The general premise is that an employer can and typically will take better care of injured workers, at a lower cost, in a free-market system than in a hyper-regulated, government-centric program.”

[In my view, WC insurance is “government-centric” in the sense that state legislatures and state insurance commissioners set minimum standards and provide some degree of oversight.]

Grabell and Berkes obtained copies of the injury-benefit plans from about 120 companies that have opted out of the WC systems in Texas and Oklahoma. The firms include: Nordstrom, McDonald’s, Tyson, US Foods, Home Depot, Lowe’s, Hobby Lobby, Russell Stover Candies, ResCare, and Walmart. The reporters compared the terms of the injury-benefit plans to WC coverage and found the plans:

“almost universally have lower benefits, more restrictions and virtually no independent oversight.”

In Texas, the plans written by PartnerSource:

“…allow for a hodgepodge of provisions that are far different from workers’ comp. They’re why McDonald’s doesn’t cover carpal tunnel syndrome and why Brookdale Senior Living, the nation’s largest chain of assisted living facilities, doesn’t cover most bacterial infections.”

Grabell and Berkes explain:

“Unlike traditional workers’ comp, which guarantees lifetime medical care, [PartnerSource’s] Texas plans cut off treatment after about two years. They don’t pay compensation for most permanent disabilities and strictly limit payouts for deaths and catastrophic injuries.

“The list of what the plans don’t cover runs for pages. They typically won’t pay for wheelchair vans, exposure to asbestos, silica dust or mold, assaults unless the employee is defending “an employer’s business or property,” chiropractors or any more than 75 home health care visits. Costco won’t cover external hearing aids costing more than $600. The cheapest external hearing aid Costco sells? $900.”

PartnerSource’s founder, Dallas-based attorney Bill Minick, says the plans are not about reducing benefits, but providing a program that is better than workers’ comp. He told the reporters:

“We’re talking about reengineering one of the pillars of social justice that has not seen significant innovation in 100 years.”

Grabell and Berkes explain how such “innovations” affect workers’ lives. For example, under Texas WC rules, employees have 30 days to report an injury. Under many opt-out plans, workers are required to report an injury by the end of their shift or within 24 hours. What happens if you don’t realize right away that you are injured? Grabell and Berkes write:

“Rebecca Amador, a nursing assistant, was helping a patient transfer to a wheelchair… ‘I felt like a pinch in my back and I thought well, it’s been a long day, I’m tired.  So I paid no mind to it. I figured it would go away.’  …By the next morning, she remembers being in so much pain she could hardly breathe.

“As soon as she got to work, Amador told her supervisor, who sent her to the hospital.  …Her employer, Fundamental Long Term Care [with its opt-out system,] rejected her claim, saying she had failed to report it by the end of her shift.

“The company’s decision left Amador in a Catch-22. Even though her injury happened at work, the company’s Texas plan wouldn’t cover it. But because it was work-related, neither would her health insurance or short-term disability plan.”

Grabell and Berkes describe how Amador’s life changed following the injury, from being off-work and relying on her son’s and daughter’s income, to applying for disability payments under Social Security.

‘’I would probably still be working there’ if Fundamental had workers’ comp,” she told the reporters. ‘Maybe I could have gotten better, maybe I could have gotten my therapy done, and I wouldn’t be in the situation I’m in.’”

An official with the Property Casualty Insurers Association of America told the reporters that some of these “injury-benefit plans” are explicitly designed to shift responsibility (and costs) to publicly-funded programs such as Social Security and Medicaid.

The Texas Department of Insurance indicates that 44 percent of current employers have opted-out of the WC system. (The opt-out allowance was part of the WC law adopted in Texas in 1913.) PartnerSource’s Minick help write the opt-out provisions which were adopted by the Oklahoma legislature and took affect in 2014.

“PartnerSource writes about 50 percent of the opt-out plans in Texas and nearly 90 percent in Oklahoma.”

Lawmakers in Tennessee are considering a bill to give that state’s employers a WC opt-out, as are lawmakers in South Carolina. The bills are being pitched by the Association for Responsible Alternatives to Workers’ Compensation. PartnerSource’s Bill Minick is the organization’s secretary.

Grabell and Berkes’ investigation is a continuation of their series “Insult to Injury” about the state of the US workers’ compensation system.