Is Tennessee Opting Out of Opt Out? It appears the answer, for this year, is yes. Tennessee legislators have been considering a bill that would let employers “opt out” of the workers' compensation system in favor of alternate privately managed plans. On March 25th the House Consumer and Human Resources Subcommittee voted to defer the bill, HB 0997, until the 2016 legislative session.
The companion bill in the State Senate, SB 721, appears to be moving forward, being referred to the Senate Finance, Ways, and Means Committee with a recommendation for passage “with amendments”. Still, without a corresponding House Bill, the effort appears to be on hold, and is an unexpected setback for promoters of the effort.
Lawmakers have been harshly criticized by the workers' compensation community (including yours truly) for the draconian measures contained within this bill. The Opt Out legislation that had been proposed initially would have capped employer's medical liability for workplace accidents at $300,000. That was amended to the higher, yet still in my opinion, unacceptable cap of $500,000.
There was no word on whether employers behind this effort were willing to accept uncapped liability for negligence claims in exchange for that cap. They must've forgotten to include that in the proposed legislation. I am sure it was an oversight.
So, the effort to extend Opt Out to yet another state appears to have temporarily failed. Legislators had been inundated with industry experts opposing the measure, which no doubt influenced this action. Also, a negative vote result by the Tennessee Labor Management Advisory Panel likely influenced this decision. The panel voted unanimously against recommending the bill. Proponents initially believed that vote was meaningless, and assuredly vowed success.
Now they have to regroup and try again next year. Maybe they shouldn't be so greedy. If they come up with a private plan that still honors the spirit of the Grand Bargain, they'll have a better shot at success.