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Proposed Changes to Tennessee's Workers' Compensation Laws in Legislature

10. March 2015 08:28

workers' comp form

Tennessee Workers' Comp laws may be getting a facelift. According to The Tennessean, lawmakers just made a proposal that would allow employers to opt out of the Workers' Comp system and create their own coverage plan, so long as it meets minimum requirements. The bill comes on the heels of Oklahoma's opt-out option, and if it passes, Tennessee, Oklahoma, and Texas will be the only three states in the country that allow employers to sidestep the Workers' Comp program.

Here are the highlights of Tennessee's proposed bill:

Worth noting: Tennessee already allows financially able employers to self-insure. Though these employers pay occupational injury benefits out of pocket, the current self-insure system requires them to have a contract with an insurance company that can be shown to state officials. This system comes with a heavy price tag, so the logic behind the proposal is to remove that extra step to save employers money.

Let's learn a little more about Tennessee's current and proposed Workers' Comp laws.

Tennessee Workers' Comp: Before and After

Currently, Tennessee's Workers' Comp laws are more similar to the laws around the country. Most states mandate that employers carry Workers' Comp (even if they have only one employee) to pay for their employees' medical expenses, lost wages, and death benefits if they're hurt at work.

Tennessee requires that employers carry Workers' Compensation Insurance

If the proposal passes, Tennessee's financially stable employers can apply to opt out of this program and set up their own alternative coverage. However, the proposal requires that these alternative plans offer…

So How Would the Bill Affect Tennessee Small-Business Owners?

You'll notice that we keep making mention of financial stability. Employers who qualify for the op-out option have to be pretty well-off to meet the alternative coverage requirements (plus the application fee alone is $500). In other words, if you can afford to pay $300,000 per injured employee, you're probably not a small-business owner, and the change won't affect you.

That also means you have to participate in the traditional Workers' Comp program and carry coverage if you have five or more employees. Per Tennessee's current laws, corporate officers are part of that employee headcount.

Not a Tennessee business owner? You can find a succinct summary of your state's Workers' Comp laws in our guide "Workers' Compensation Laws By State." And to learn more about the cost of Workers' Comp, check out this Workers' Comp Insurance Cost Analysis.


Insurance News | Small Business | Workers' Compensation Insurance

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