There are approximately 124,000 Non-subscribing employers in the State of Texas: from Walmart, Whataburger and Baylor Hospital to your local restaurant, grocery store and auto repair shop. And yet, many are unaware of this 100+ year option available to Texas Employers.
Today, we continue with Part 2 of the six-part series on “The Basic Differences Between Texas Non-subscription and Workers Compensation”..
The first two questions we covered in last week's blog are listed below. See last weeks blog for the answers.
1. How does the price compare between Non-subscription and workers’ compensation?
2. Are benefits the same between Texas Non-subscription and workers’ compensation?
This week’s questions are:
3. Are there any other main differences between workers’ compensation and Non-subscription?
In addition to the savings being provided by non-subscription and the ability for the employer to tailor its occupational injury benefits to its workforce, we feel there are four additional significant differences:
• Workers compensation pays for both partial and complete disability. Partial disability is often called impairment ratings and is frequently paid even though the employee can work. Complete or total disability triggers the wage reimbursement scale previously mentioned. Under non-subscription, the general philosophy is to pay an increased % if the employee cannot work and pay nothing if he can. As a result, impairment ratings or anything similar are often not provided.
• Under Workers Compensation, the employee can choose the medical provider. Even in a network, the employee can choose within the network. As a nonsubscriber, the employer (TPA) directs the employee to the provider of the employer’s choice. If the employee does not attend, benefits stop. This single step eliminates most occupational injury fraud and is one of the main reasons non-subscription is embraced by so many.
• Under workers compensation, an employee generally has up to 30 days to report a claim. If inebriated or under the influence (WC policy exclusions), an employee can wait out the urine drug screen to achieve the desired result. As a nonsubscriber, the reporting period is generally reduced to end of day or 24 hours. A shorter time period makes a test more reflective of actual circumstances at time of injury.
• Larger deductibles under workers’ compensation generally require collateral. Similar sized SIRs under non-subscription require no collateral.
4. What is “Exclusive remedy” and does it apply to both workers’ compensation and Non-subscription?
Exclusive remedy applies solely to workers’ compensation and states that, by paying the mandated benefits, an employer cannot be sued. The only exception to exclusive remedy within Texas workers’ compensation is the gross negligence on the part of the employer resulting in death. As a Nonsubscriber, since the employer has control over both the benefits and the process for paying those benefits, exclusive remedy was not provided as an employer protection. In fact, certain defenses are not available to non-subscribers. Just like General Liability and Auto Liability, an employer can be sued for negligence. In the last 10 years, statistics show that approximately 1-3/1000 claims have attorney involvement (not necessarily litigation). For an employer averaging 40 claims per year (a fairly good sized employer), that means on average they will have an attorney involved claim once every 25 years. Of course, the “CPro Texas Option” provides Employer’s Liability coverage for the Employer to pay for any possible Judgments or defense costs.