The Lone Star State is currently the only one allowing employers to determine whether or not to provide Texas workers comp insurance to their employees. The exception being public employers along with employers that enter into a building or construction contract with a governmental entity.
A Joint Select Committee study concluded that work-related fatalities and injuries in Texas appeared to be higher than in any other state in the nation. The committee also concluded that benefit rates and payment durations were low compared to other states, especially in the case of seriously injured workers. This creates low morale and an inability to retain good workers.
Add to this the fact that medical costs are on the rise and that attorneys are extensively involved in cases filed by injured workers for lost time claims, (even when such claims go undisputed) and you have plenty of concerns that need to be addressed.
Self-insurance is a viable option
The Workers’ Compensation Act ensures that injured workers are compensated fairly and appropriately for workplace injuries. Employers choosing not to maintain coverage must notify the Division as well as their employees that they don’t intend to maintain workers’ compensation insurance. The Act did create more coverage options for employers to utilize, including self-insurance for large employers who meet established criteria and are certified by the Division.
There has been a serious concern about the high costs that stem from workplace injury claims, as it seems to only drive up the costs. In an attempt to offset costs, the Act called for the development of medical fee and treatment guidelines to control medical costs and limit attorneys fees to time and actual expenses, up to a maximum of 25% of an injured worker’s total recovery.
By opting out of the workers’ comp system in Texas an employer automatically becomes a ‘nonsubscriber’. The types of businesses that generally go from workers’ comp into nonsubscription are those employers making the decision to take more control of their claims handling and in general take better care of their employees via better medical management and better physician outcomes. The hope here is that employees will receive proper care with or without Texas workers comp insurance in place.