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STATE DRUG TESTING LAW 101 BY BILL CURRENT, CURRENT CONSULTING GROUP


Understanding Voluntary Workers’ Compensation Premium Discount Drug Testing Laws


This column will provide our readers with news and updates on state drug testing laws.


D


espite the fact that there are still some people who think drug testing is illegal, nothing could be further


from the truth. Not only is workplace drug testing legal in all 50 states, but some states have actually created financial incentives to encourage employers to implement applicant and employee drug testing programs. Tere are currently 12 states with laws


that offer workers’ compensation insurance premium discounts when employers establish a drug testing program that complies with that law. Such laws are typically referred to as “voluntary” laws. Tis means that only employers that voluntarily choose to participate in such programs (and qualify as well) must conduct drug testing in compliance with the program’s requirements and thus become entitled to receive the workers’ comp premium discount. Outside of the voluntary law in these states, employers are not compelled to conduct drug testing or to comply with the procedural requirements found in the voluntary law (though there are some exceptions). While no two states with voluntary


workers’ comp discount programs are exactly the same, they typically fall into one of two categories: 1) states that directly administer their programs and, 2) states that require insurance providers to administer the programs and offer the premium discount.


Laws Administered by States Te majority of voluntary state laws that offer workers’ comp premium discounts are administered directly by the state. Alabama, Arkansas, Florida, Georgia, Kentucky, Ohio, South Carolina, Tennessee, and Wyoming all administer their own laws, respectively. In order to be eligible for the premium


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discount, employers must adapt their drug testing programs to that state’s voluntary law and receive approval by the state. Discounts offered vary depending on


the state’s program. Te most common discount is 5 percent, but that’s not always the case. For example, eligible employers in Ohio may receive a 4–7 percent discount depending on whether they comply with the basic or advanced requirements found within the state program. In Georgia, the discount is 7.5 percent. Qualified employers in South Carolina may receive a 5 percent discount; however, this may vary if that percentage is deemed actuarially unsound—so the discount could theoretically be smaller. In any case, within these states employers


must comply with the requirements set forth in the law and receive approval from the state.


Laws Administered by Insurance Providers Only three states fall into this second category where administration of workers’ comp premium discounts for drug testing is relegated to insurance providers. Idaho, Mississippi, and Virginia all have laws that create the voluntary premium discount, but none of them directly monitor eligibility. However, in Idaho and Mississippi,


employers must comply with the requirements set forth in the statute. Aſter that, it’s up to the insurance provider to review a policy and decide if it meets the requirements to qualify for a premium discount. Mississippi’s law explicitly gives insurers an out by stating that nothing in the law obligates them to provide a premium discount, even if an employer’s policy complies with the voluntary program.


Winter 2016


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