ACIIR Sponsors New Research

Mandatory workers’ compensation insurance is required in all states except Texas. However, Tennessee and South Carolina are considering adopting an “opt-out” clause similar to that employed by Texas. Alabama fits the profile to also consider making an opt-out clause available in the state.

Dr. Steve Buchheit wanted to know whether a change such as this would be favorable to workers in Alabama. He conducted a study that surveyed 80 respondents through Amazon’s Mechanical Turk platform in June 2017.

“Surprisingly to me, people were generally happy with workers’ compensation,” Buchheit said. “Before going into a politically charged attempt to allow Alabama companies out of workers’ comp – given that people were happy with the system – you may not want to do that.”

The survey manipulated two court cases, one where workers’ compensation was a positive factor, the other it was negative. Results indicate that participants understood the benefits and limitations of both situations, but retained their original positive belief in workers’ compensation.

The participants who indicated that they had prior experience with filing for workers’ compensation had a higher opinion of the system and were happier with it overall.

“In general, anything that is mandated and required, I presumed people were going to find fault with it,” Buccheit said. “It’s imperfect but in general it is not a disliked program.”

At a state level, similar states are considering adopting a clause that allows opting out, but the data in this paper would suggest there does not seem to be a lot of motivation for that from workers.

The Alabama Center for Insurance Information and Research (ACIIR) sponsored Buchheit’s research on worker’s compensation insurance as part of an initiative to encourage insurance research on a variety of topics to inform and educate state lawmakers, insurers and policyholders.

“Prof. Buchheit’s research fits well in ACIIR’s mission,” said ACIIR Director Dr. Lars Powell. “We were pleased to sponsor his efforts and look forward to working with him again. Insurance is a rich and broad topic with lots of opportunity to answer relevant questions.”

Buchheit said future insurance research on this topic may look into professional groups who might have a different view on the matter.

Dr. Buchheit is a professor in the University of Alabama Culverhouse School of Accountancy. His past research has included research into manipulated accounting in hospitals regarding Medicaid, and dishonest tax itemization of non-cash charitable deductions.

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