Texas Association of Business

Employers in Texas can elect not to carry workers’ compensation insurance which we refer to as nonsubscription. The Nonsubscriber Committee is comprised of nonsubscribing employers and vendors that service nonsubscribers. The committee provides guidance and direction to TAB staff to develop legislative priorities related to the nonsubscriber community. The committee helps to identify and affect legislation that impacts nonsubscribers.

Legislative Priorities.

Prior to 2005, the status of the Workers’ Compensation system in Texas was grim. Employers were faced with eye popping premiums, providers were fleeing and injured workers were caught in a failing system. In 2004, only 23 percent of doctors were willing to accept new workers’ compensation patients. After a massive revamp of the workers’ compensation system during the 79th legislative session, the outlook has dramatically improved.

With the reforms barely up and running, most people expected the 80th Legislative Session to be one where very few workers’ compensation bills were filed. Most people were wrong. More than 50 bills were filed. Some were beneficial, some were tweaks, but there were also some that were direct attacks on the newly formed system. Most of the bills that did pass were positive, but the onslaught of bills filed made it clear that some were not willing to wait for the reforms to take hold.

Nonsubscribing employers were also under attack during the 80th Legislative Session (Nonsubscription refers to a Texas-specific law that allows employers to opt out of providing workers’ compensation benefits and create their own insurance plan to control costs and make injured workers whole). Many bills were filed that directly or even indirectly would have hurt nonsubscription, and TAB successfully ensured that these bills did not become law. We believe that the upcoming legislative session will be no different. TAB is prepared to protect this critical option.

For many employers, nonsubscription has been a choice that kept their operations in Texas and aided them in providing better care to their employees. TAB believes that this critical workplace tool must be preserved. Over 40 percent of Texas businesses are nonsubscribers, who historically have had significantly greater satisfaction ratings and reduced expenses when compared to the workers’ compensation system.

Nonsubscription has always been a valuable tool for employers and the workers’ compensation system is now seeing positive changes as a result of (workers’ comp) networks. These networks, similar to an HMO, allow employers and carriers to control which health care providers their injured workers can utilize. Networks were at the heart of the 79th session reforms, and although the process is slow moving, preliminary results are promising and many carriers are giving discounts up to 12 percent to employers choosing this option.

The system is improving, but TAB and the business community must stay vigilant as we work to bring improved care to injured workers and lower premiums to employers

The system is improving, but TAB and the business community must stay vigilant as we work to bring improved care to injured workers and lower premiums to employers.

Accountability of Providers.  Support accountability measures for providers within the workers’ compensation system.

Administrative simplification.  Support legislation to reduce unnecessary administrative burdens in the workers’ compensation system on employers, insurance carriers, injured workers, and health care providers.

Arbitration. Oppose any efforts to disallow or negatively impact arbitration, which allows disputes to be resolved in a timely manner. Oppose additional restrictions on arbitration.

Employer responsibilities.  Support efforts to streamline the statutory process in which an employer is required to notify its employees about any change to its workers’ compensation program relating to networks.

Exemplary damage caps.  Oppose legislation to remove caps on exemplary damages in workers’ compensation claims.

Fraud:  monitoring, detection and prosecution.  Support legislation that increases the Texas Department of Insurance focus on identifying and prosecuting fraud and abuse within the workers’ compensation system. Also, support incentives for identification and successful prosecution of workers’ compensation fraud.

Health and safety.  Support cost-effective health and safety measures.

Illegal drug use.  Support legislation encouraging zero tolerance for the presence of alcohol or illegal drugs on the job. Support efforts to make the intoxication defense stronger.

Impairment ratings.  Maintain the objectivity of the workers’ compensation system by ensuring that adopted medical impairment guidelines do not raise impairment benefit amounts.  Also, support continued monitoring of the income benefits system.

Mandatory Workers’ Compensation.  Oppose legislative efforts to mandate workers’ compensation coverage.

Mental health.  Oppose legislation designed to expand mental health treatment guidelines, or the inclusion of psychologists as authorized treating physicians.

Opinion of chosen doctor.  Support legislation to clarify that claimants may not appeal the opinions of their treating doctor in the areas of medical treatment, impairment and dispute process.

Over-burdensome laws.  Oppose legislation that imposes new laws or regulations on employers that are non-subscribers to workers’ compensation.

Public use data files.  Require the Texas Department of Insurance to make available a public use data file (PUDF) that protects the confidentiality of claimants and employers, but identifies health care providers and insurance carriers. Support all changes in the confidentiality provisions of the Texas Workers’ Compensation Act necessary to allow distribution of the PUDF and to allow publication of medical disputes, appeals panel and the State Office of Administrative Hearings decisions with protection only of claimant and employer confidentiality.

Reduction of unnecessary laws.  Support legislation to reduce unnecessary administrative and legal burdens on all employers.

Regulatory efficiency.  Support measures to increase efficiency in the operation and administration of the Texas Department of Insurance.

Retaliatory discharge.  Support legislation to limit damages and restrict the scope of action filed by a terminated employee for workers’ compensation retaliatory discharge. 

Settlements.  Oppose legislation that attempts to reintroduce lump sum settlements, including medical lifetime benefits, into the Texas workers’ compensation system.

Statutory employer.  Support clarification of the law granting immunity from lawsuits to the direct employer of an injured worker.

Subsequent injury fund.  Support legislation to secure the solvency of the subsequent injury fund that does not require an increase in the maintenance tax.

Treating physicians.  Support legislation that strengthens the role of treating physicians to ensure quality medical care and effective management of care for injured workers.  Clarify existing law regarding authorization of treating doctor.

Utilization review.  Support legislation to promote utilization review as a method of cost containment and quality improvement.

Waiver.  Support legislation to specify that the defense of “No compensable injury” cannot be waived regardless of any time constraints.