Employers in Texas have always had the choice of “opting out” of workers comp. In fact, an employer can reject workers’ compensation completely and “go bare,” paying no benefits whatsoever to injured employees. However, we do not recommend this path, and believe that non-subscription should be a responsible alternative, in which employers are encouraged to manage their costs and provide a safer workplace.
In general, employers in Texas who “opt out” of workers compensation are better able to direct the care of injured employees. Employers are given a financial incentive to provide a safer workplace, and can avoid the frustration of dealing with uncaring or unresponsive state agencies or health care providers. Non-subscriber employers can participate in the decision to send an employee to a certain doctor, whether to pay a claim, whether an employee is eligible for benefits, whether light duty work is available, and even whether a claim is valid at all. Non-subscriber employers can also receive a direct return on their effort to increase workplace safety, both in reduced premiums and a reduction in claims. Employee morale may also improve when hard working employees see that “malingerers” are not permitted to take advantage of the system and collect on suspicious injuries.
There are several “tell tale” signs that an injury may not be what it seems. Usually an employee injury claim is questionable when it includes three or more of the following indicators:
- The injury concerns soft tissue & cannot be objectively verified
- The employee refuses diagnostic procedures to confirm the injury
- The employee refuses to cooperate with rehabilitation personnel
- The employee refuses to return to work despite a doctor’s O. K. to return
- The employee has history of reporting subjective injuries
- The injury “occurred” on a Friday and is reported on a Monday
- The claim occurs after the employee has been terminated
- The claim occurs shortly after the employee was hired
- The type of injury is unseen in the employee’s line of work
- The claim occurs after the injured worker took unexplained or excessive time off
- The employee does not promptly report injury to supervisor
- The injury was not witnessed by anyone
- The reported accident occurred in an area where the employee does not work
- The details of the accident are vague or contradictory
- An independent medical exam (IME) reveals conflicting medical evidence
- The employee says he can’t work but does other things that require full mobility
- Using our program, an employer has a much better chance of rooting out “bogus claims” and denying benefits,, and managing claims that are worthwhile and need attention.
With workers compensation, the benefits are the employees “exclusive remedy” in most cases. In the case of non-subscription coverage, an employee could choose to sue an employer for his injures. However, mediation/binding arbitration are available to non-subscriber if they are subject to a negligence lawsuit. These alternative dispute resolution methods will reduce the cost of litigation.
The good news is that most people are not interested in hiring a lawyer and suing their employer, and historically the number of cases compared to the number of actual injury claims is extremely low. The reality is that anyone can file a lawsuit. Usually, if that happens it either involves a serious accident that results in permanent disabilities, or it occurs when an employee’s benefit claims go unpaid and he has no other choice. Under our program, we encourage employers to adopt a safety program, which can help reduce the potential for a major injury claim. In addition, we will handle every injury claim quickly and efficiently to make sure that bill collectors do not force injured workers into contacting an attorney. Finally, with ADR in place, lawsuits will go to mediation arbitration, where the majority of disputes are resolved quickly and with minimal disruption at the workplace.
No – There are tax companies that that are required to have a workers comp certificate in order to conduct business with certain companies. There are some high-risk companies that may want to remain in the workers comp system.
File DWC form 5 with the Department of Insurance (formerly the taxes workers’ compensation commission). Notify your employees, current and new, that the employer is a non-subscriber and post notices, in both Spanish and English, in a common area. We recommend that the company also obtain sufficient insurance coverage, with the proper ERISA documentation, to pay employee injury and put in place a sufficient management involved safety program.
Yes – once you become anon-subscriber you fall under ERISA law. Having a written ERISA plan is therefore no only legally required, it simply makes good business sense.
Employers must have two fundamental documents that describe the plan – a written plan document and a summary plan description – each of which must meet the requirements of ERISA. AIS has retained Paul Hood to prepare both documents for your adoption.
ADR means Alternative Dispute Resolution. “In practice, this means that a company can adopt a plan to send nearly all workplace disputes to mediation or, if that does not succeed, to final binding arbitration. ADR may not apply to all claim (such as pre-existing disputes or certain administrative matters), and it may not apply to all employers (such as those with collective ). However, in the vast majority of cases. ADR is available and an extremely useful tool.
Speed and reduced litigation costs privacy The absence of a jury (and their sometimes emotionally-driven verdicts ) The “expert” status of most mediators or arbitrators, which allows them to bring their own experience to the resolution dispute The increased potential for settlement that results form most mediators’ or arbitrators’ direct involvement in the process Greater informality, which allows parties to get to the heart of an issue.
Mediation is often the most straightforward and cost-effective method of examining and resolving disputes. It is a meeting in which a neutral third party, called a mediator, helps the parties come to an agreement based on everyone’s needs and interests. Mediation helps primarily by opening up communication lines and by coming up with options. It is a non-binding process. Which means the mediator can make suggestions, but the employee and the employer are responsible for mutually resolving the dispute.
Arbitration is a process in which a dispute is presented to a neutral third party, the arbitrator, for a final and binding decision. The arbitrator makes this decision after both sides present their arguments at the arbitration hearing. There is no jury. The arbitration service provider runs the proceeding, which is held privately. Though arbitration is much less formal than a court trial, it is an orderly proceeding, governed by rules of procedure and legal standards of conduct.