Question: Does Texas law require employers to carry workers' compensation insurance?
Answer: No. Employers may be either subscribers (purchasers of WC) or nonsubscribers.
Question: How difficult is it to become a nonsubscriber?
Answer: It's a simple three-step process. 1) File annually the form DWC-5 with the Texas Department of Insurance. 2) Post on your bulletin board in English and Spanish, the required nonsubscription form. 3) Advise your employees.
Question: How does being a nonsubscriber differ from being a purchaer of Workers' Compensation?
Answer: First, elimination of fraudulent claims, by employee or health provider, is generally easier as a nonsubscriber. If you purchase Workers' Compensation, it is a violation of the law to force the employee to the doctor of your choice. As a nonsubscriber, no such prohibition exists. In fact, direction of employees is a key fraud-fighting tool. Second, as a subscriber you are prohibited from involving yourself in the claims process unless you are a qualified self-insurer in the State of Texas. As a nonsubscriber, you may be as involved as you desire. Third, to deny a claim as a subscriber, the insurer must be able to prove the employee was not injured during the course and scope of employment. This is especially difficult on alleged non-witnessed injuries. As a nonsubscriber, the employee can be required to prove he was injured during the course and scope of employment. Fourth, employee benefits under Workers' Compensation are unchangeable. As a nonsubscriber, benefits can be tailored to fit the needs of your employees: Weekly benefits can be increased (up to $1,000 under our plan) and various lump sum death benefits may be provided. Fifth, Workers' Compensation is the sole remedy for occupational injuries for subscribers. Nonsubscribers fall within the general tort system similar to your general liability exposures. There are other differences but we consider the above to be the most significant.
Question: As a nonsubscriber, how does my company handle the common-law liability that it becomes subject to for on-the-job-injuries?
Answer: There are three ways. First, the use of the ERISA Plan that comes with the CEI policy "federalizes" all claims and disputes about the payment or denial of benefits to employees. Second, the Mandatory Arbitration Agreement requires employees to arbitrate all of their disputes with the Company, including not only on-the-job injury claims, but also claims for all types of discrimination, retaliation, defamation, breach of contract, etc. Third, the CEI policy provides liability coverage for all employees' on-the-job injury damages claims, including amounts for approved settlements, adverse judgments and arbitration awards of compensatory and even punitive damages, and defense attorneys' fees.
Question: As a nonsubscriber, if a case does go to trial, do I lose all common-law defenses?
Answer: No. Since the first Texas Workers' Compensation Act in 1913, it has always expressly deprived nonsubscribers of the common-law defenses of assumption of the risk, contributory negligence and negligence of a fellow servant. Since then, however, the Texas Supreme Court has eliminated those three defenses from the Texas common law for all defendants. The statutory defense of proportionate responsibility is not available to defend an employee's occupational injury negligence claim against a nonsubscriber, and pre-injury waiver agreements signed after June 17, 2001 are not enforceable as a defense to such a claim.
Question: Do you require a written ERISA plan?
Answer: Yes, an ERISA plan is provided at a charge of $350 to the insured.
Question: Does the Mandatory and Arbitration Agreement cover more than on-the-job injury claims?
Answer: Although the CEI and VIP policy only provides coverage for on-the-job injury benefits and liability, employees frequently bring suit against employers for a wide range of alleged wrongs. Arbitration is a fast, fair, efficient means for resolving disputes, eliminating the delay, expense, acrimony, and irrationality of many jury trials. If an employer is going to rollout an arbitration program like the Mandatory Arbitration Agreement, we think most employers will benefit from it having coverage as broad as possible.
Question: If one of my Texas employees is injured outside Texas, is he covered?
Answer: Yes, our coverage is nationwide.
Question: Are we required to utilize your Preferred Provider Orginization (PPO)?
Answer: No, we will utilize the doctors of your choice if you so desire.
Question: How does Nonsubscriber pricing compare with Workers' Compensation?
Answer: We are very competitive and are generally priced at least 40% less than Workers' Compensation. Our ability to virtually eliminate fraud and control medical costs allows us to pass these savings on to the employer in the form of an up-front price savings.