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Workers' comp opt-out plans troubling

New Jersey workers might want to be aware of a troubling trend in both Texas and Oklahoma. In those two states, businesses lobbied for legislation to allow them to opt out of the workers' compensation system, instead providing their own alternative injury benefits plans.

While companies tout these plans as cost-effective, the reality is that workers receive far less in benefits when they are injured while working on the job. Many of these plans specifically deny benefits if workers do not formally report their injury by the end of their shift or within 24 hours. Still others provide for mandatory settlements with the threat of no further payments if employees don't accept.

Regulators in the two states claim there is little they can do about these plans. Unlike workers' compensation benefits, benefits from these plans are taxable income to the recipients, meaning workers receive far less than they would otherwise. In the event of a worker's dying on the job, most provide for a single lump sum payment instead of payments stretching on for a lengthy period of time. The plan's designers have set up lobbying groups in South Carolina and Tennessee, and they say they aim to expand into at least 12 states by 2020.

Workers' compensation provides important protections for workers who are injured on the job, and it appears that corporate interests are attempting to whittle those rights away in the name of profits. People may want to follow what happens with the lobbying push, letting their congressmen know that they want workers' compensation to remain mandatory and in place in the state. The one caveat is that employers who choose to opt out of workers' compensation lose their protection from being sued for negligence. While that is one plus, personal injury and wrongful death cases may take years to progress through court, leaving victims with little on which to live during the meantime.

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