March 24, 2018

WorkCompRecap: Opt-Out Outlook!

Today’s issue of WorkCompRecap features NCCI’s recent release of a new update on alternative workers compensation mechanisms, or “opting-out” of workers’ compensation, which appeared to be gaining traction and generated debate at workers’ comp stakeholder meetings across the country, but now seems to be mentioned sparingly.

In the update NCCI covers the distinction that Texas has as more Opt-in than Opt-out, and then covers states who recently flirted with opt-out legislation, including Oklahoma, Tennessee, South Carolina, Florida and Arkansas. The report also looks at the future for Opt-out, and while the current state outlook is that opt-out will stay quiet, it remains to be seen whether the topic will become a state legislative issue in 2018. NCCI did however note that one factor that may impact state-based interest in opt-out is the continued decrease in frequency and the recent declines in loss costs/rates across the states. As the cost of workers’ comp is reduced, it begins to balance against the risk associated with opting out.

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