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How Does Tennessee Opt Out Plan Weaken Benefits for Injured Workers?

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In Oklahoma and Texas, there is no state-mandated workers’ compensation benefits. Instead, businesses are allowed to create their own benefit plans. These plans are often lacking in compensation given to workers who were injured on the job. This is the Opt Out plan that is only applicable to Texas and Oklahoma. It’s a good thing Tennessee values its workers and doesn’t allow businesses an opt out option, right?

Wrong. Two years ago, the Workers’ Compensation Reform Act of 2013 was approved, which focuses on lowering the premium rates for employers. This was well received throughout Tennessee and generally not seen as cause for alarm. Last year, however, lawmakers pushed for additional legislation that would allow employers of Tennessee to opt out of workers’ compensation benefits if the legislation passes. This proposal is cleverly named the Opt-Out Plan.


Essentially, “Opt-Out” will lower employer insurance expenses by drastically reducing and limiting the compensation benefits an injured worker is qualified to receive. Not unlike Texas or Oklahoma, businesses would be able to make their own policies. Naturally, this means all policies businesses create for their employees would be done with the intent of cutting costs rather than helping their injured workers.

Still similar to Texas and Oklahoma, employers would be able to fix their own deadlines for employees to submit their claims. Employers would be able to cherry pick which injuries to cover, establish a limited amount of benefits to provide and choose their injured employee’s doctors.

It gets worse. If the Opt-Out Plan is passed through legislature, the state will not have a say in any Opt-Out Plan businesses choose to adopt in place of state-regulated workers’ comp policies. The Federal Employees Retirement Income Security Act (ERISA) and its bare-minimum standards will exist as the Opt-Out Plan oversight for businesses, which is not particularly comforting.


Already, lawmakers are attempting to spin this Opt-Out Plan as a “pro-business” solution that is supposed to appeal to the state’s conservative majority. Well, it turns out, these same lawmakers are taking their advice from a consulting company based in Dallas, Texas who call themselves designers of workers’ compensation alternatives. Well, Texas can keep its Opt Out policy. Here’s to hoping Tennessee continues to value its workers and continues requiring businesses to comply with state-mandated workers’ comp benefits.

Stanley A. Davis is an injury attorney that works to help injured workers and other accident victims the compensation they deserve.

“Love doesn’t harm a neighbor. Love therefore is the fulfillment of the law.” Romans 13:10


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