My friend, Peter Rousmaniere, has an interesting column on the subject of Workers Compensation Opt-Out plans as existing or proposed in various states. This article suggests that Peter, a long time wise observer of things related to Workers Compensation, is changing his view on Opt-Out programs.
Myself, I'm of a mind that these programs are kind of like socialism--possessing intriguing aspects in theory, but in actual practice pretty goddamned terrible--terrible for people who suffer injury or illness from their workplace, at any rate.
This country created our Workers Compensation system as a grand bargain, a compromise that protected employers from potentially catastrophic liability while giving employees a system that supposedly provided no fault benefits, including medical care and disability and death benefits, that could be relied upon. The Opt-Out programs I have reviewed impose draconian and unfair limitations and penalties on workers. I know that I sure as hell would not want to be relying upon the one-sided rules that Wal-Mart imposes on its poor workers if I were injured while working in one of their increasingly-depressing retail operations. I've had a little first hand experience with how fair and impartial Wal-Mart is in the area of Workers Compensation, as a family member once was injured while working there. Hell, if they took decent care of their injured workers then the Walton heirs might have to sell off some of their art collection, and we can't have that.
Look, Workers Comp costs are a real issue for a lot of employers--nobody knows that better than I do, because I've devoted my professional life to helping employers control the cost of Workers Compensation insurance. But the solution to this problem isn't to screw over decent people who get injured or made ill due to their work. There are things that can be done to reduce fraud and inefficiencies in the system without taking unfair advantage of people.
Here in my home state of Illinois, the traditional Workers Compensation system has seen significant reductions in the cost of Workers Compensation claims that were achieved through a combination of medical fee schedules and some other reforms that did not destroy the no-fault Workers Comp system. Illinois employers are seeing real reductions in Workers Comp insurance manual rates, and would likely see further reductions if some common sense insurance reforms were enacted.