Standing before a giant map in his Dallas office, Bill Minick doesn’t seem like anyone’s idea of a bomb thrower. But backed by some of the biggest names in corporate America, this mild-mannered son of an evangelist is plotting a revolution in how companies take care of injured workers.
His idea: Let them opt out of state workers’ compensation laws — and write their own rules.
Minick swept his hand past pushpins marking the headquarters of Walmart, McDonald’s and dozens of his other well-known clients, and hailed his plan as not only cheaper for employers, but better for workers too.
“We’re talking about reengineering one of the pillars of social justice that has not seen significant innovation in 100 years,” Minick said.
Minick’s quest sounds implausible, but he’s already scored significant victories.
Many of the nation’s biggest retail, trucking, health care and food companies have already opted out in Texas, where Minick pioneered the concept as a young lawyer. Oklahoma recently passed a law co-written by Minick allowing companies to opt out there. Tennessee and South Carolina are seriously considering similar measures. And with a coalition led by executives from Walmart, Nordstrom and Lowe’s, Minick has launched a campaign to get laws passed in as many as a dozen states within the next decade.
But as Minick’s opt-out movement marches across the country, there has been little scrutiny of what it means for workers.
ProPublica and NPR obtained the injury benefit plans of nearly 120 companies who have opted out in Texas or Oklahoma — many of them written by Minick’s firm — to conduct the first independent analysis of how these plans compare to state workers’ comp.
The investigation found the plans almost universally have lower benefits, more restrictions and virtually no independent oversight.
Already in Texas, plans written by Minick’s firm allow for a hodgepodge of provisions that are far different from workers’ comp. They’re why McDonald’s doesn’t cover carpal tunnel syndrome and why Brookdale Senior Living, the nation’s largest chain of assisted living facilities, doesn’t cover most bacterial infections. Why Taco Bell can accompany injured workers to doctors’ appointments and Sears can deny benefits if workers don’t report injuries by the end of their shifts.
Unlike traditional workers’ comp, which guarantees lifetime medical care, the Texas plans cut off treatment after about two years. They don’t pay compensation for most permanent disabilities and strictly limit payouts for deaths and catastrophic injuries.
The list of what the plans don’t cover runs for pages. They typically won’t pay for wheelchair vans, exposure to asbestos, silica dust or mold, assaults unless the employee is defending “an employer’s business or property,” chiropractors or any more than 75 home health care visits. Costco won’t cover external hearing aids costing more than $600. The cheapest external hearing aid Costco sells? $900.
The plans in both Texas and Oklahoma give employers almost complete control over the medical and legal process after workers get injured. Employers pick the doctors and can have workers examined — and reexamined — as often as they want. And they can settle claims at any time. Workers must accept whatever is offered or lose all benefits. If they wish to appeal, they can — to a committee set up by their employers.
In many cases, ProPublica and NPR found, the medical director charged with picking doctors and ultimately reviewing whether injuries are work-related is Minick’s wife, Dr. Melissa Tonn, an occupational medicine specialist who often serves as an expert for employers and insurance companies.
Workers’ comp was founded on the premise that employers owed a duty to injured workers and their families. And laws in every state require them to pay workers’ medical bills and some of their lost wages until they recover — or for life if they can’t.
Earlier this year, a ProPublica and NPR investigation detailed how states have chipped away at these guarantees. A series of new laws has cut benefits, given employers and insurers more control over medical care, and made it more difficult for workers to qualify for coverage. But other than Texas and Oklahoma, no state has allowed companies to simply opt out.
Minick, 55, markets his vision as a cure for the endless cycle of cuts.
“It’s not about reducing benefits,” he said. “We can objectively show you that we have saved our clients over a billion dollars against Texas workers’ comp over the past decade. When you’re saving that kind of money, you don’t have to get hung up on squeezing the employee.”
Yet Minick’s push has united an unlikely set of allies — unions, trial lawyers and insurance companies. They say his idea isn’t progress, but a return to the Industrial Age before workers’ comp, when workers and their families had to sue their employers or bear the costs of on-the-job injuries themselves.
“That’s the system we had in place 100 years ago,” said Trey Gillespie, senior workers’ comp director for the Property Casualty Insurers Association of America. “This is not an innovative concept.”
Mike Pinckard, a Fort Worth truck driver for 31 years, remembered when his employer, Martin-Brower, McDonald’s largest distributor, announced last November that it would be switching to an opt-out plan.
“They told us this was going to be the best thing, that this was going to be better than workers’ comp,” he said.
Two months later, Pinckard said, he was pulling a cart loaded with frozen French fries when he slipped on some ice in his trailer and suffered a hernia. He had previously had two hernias on the job that were covered by workers’ comp and figured this time would be no different.
But the denial letter said the plan for Reyes Holdings, which owns Martin-Brower, only covers two types of hernias — not the kind Pinckard suffered.
“The only way it was covered was if it was directly under my belly button,” he said. “Mine was slightly above my belly button.”
In this instance, as in others ProPublica and NPR found, the costs of the injury were shifted to the employee, group health or government programs.
Pinckard, 58, said he’s spent over $10,000 in deductibles and copays after getting the hernia covered by his health plan.
“I gave my body and soul to the company, and they were doing the same back until last year,” he said. “It’s just an easy way for the company to get out of when you get hurt. It’s all it is.”
The Texas Way
Texas has always allowed employers to opt out of workers’ comp. But until insurance premiums started rising rapidly in the late 1980s, most companies considered it foolish because carrying workers’ comp protected them from lawsuits.
Minick was a young lawyer for one of Dallas’ oldest firms in 1989, when some of the firm’s business clients, gambling that the cost of any lawsuits would be cheaper, began dropping workers’ comp. The senior partners assigned Minick and several colleagues to come up with an alternative.
They found it in the Employee Retirement Income Security Act, a federal law passed in the early 1970s to protect workers as employers were shedding their pensions.
ERISA had been applied similarly to other worker benefits, such as health plans and disability policies. Minick and his colleagues decided it could provide a legal framework for plans covering on-the-job injuries.
Texas courts agreed, even though, compared to workers’ comp, the ERISA-based plans gave employers critical advantages. Under ERISA, appeals are heard in federal court, rather than state workers’ comp courts. And in general, judges could rule only on whether a denial was reasonable — not whether it was fair. This gave employers far greater control.
As more and more companies adopted plans, in 1994 Minick struck out on his own. His consulting firm, PartnerSource, soon became a one-stop shop for companies looking to drop workers’ comp. For a flat fee, PartnerSource hooks companies up with insurance carriers, claim administrators, medical networks and defense lawyers. It also serves as the first line of defense, reviewing claims and advising companies how to avoid lawsuits.
Already, such plans cover nearly 1.5 million workers in Texas and Oklahoma — more than are covered under 21 states’ workers’ comp systems. PartnerSource writes about 50 percent of the opt-out plans in Texas and nearly 90 percent in Oklahoma, alone covering more workers than 14 state programs.
Bill Minick's company PartnerSource writes about 50 percent of the opt-out plans in Texas and nearly 90 percent in Oklahoma. “We’re talking about reengineering one of the pillars of social justice that has not seen significant innovation in 100 years,” he said.
PartnerSource’s offices overlook a posh part of Dallas. The firm’s walls are a monument to Minick’s success, decorated with framed thank you letters from companies who’ve hired him. Inside his office, the mementos are different, reflecting his values. There are pictures of Boy Scouts trips he’s led and letters from charities he’s supported. The radiant plumage of a pheasant he shot is stuffed and mounted next to the doorway.
Minick sells his idea earnestly, speaking with a matter-of-fact certainty that disarms skeptics and defies arguments to the contrary.