WORKERS ’ COMPENSATION IN TEXAS
All Texas employers are responsible for claims for medical bills and lost wages by their employees who are hurt on the job or who suffer an occupational disease on the job … period . Everyone is subject to the law and every employee is entitled to the exact same payment for injury . The options available to Texas employers to handle their regulatory obligation for their Texas employees when they are working in Texas are as follows :
1 . Buy Workers ’ Compensation insurance . This is the most common form of risk transfer that employers will utilize .
2 . File with the State of Texas for permission to be “ Self-Insured .” The following are the basic requirements to be “ Self-Insured :”
a . You must have a total unmodified Texas Workers ’ Comp premium of at least $ 500K to file for permission to be self-insured
b . Submit three years of audited financial statements
c . Provide information to the Workers ’ Comp division on profitability , previous Workers ’ Comp losses , and the number of Workers to be covered
d . Establish a Division-Certified Safety Program at all job sites
e . Provide a minimum security deposit of $ 300K or 125 percent of the employer ’ s existing Workers ’ Compensation liabilities ( whichever is greater ) f .
Obtain a minimum of $ 5 million of excess insurance coverage
g . Pay fees and taxes necessary to support the administration of the program including establishment of a guaranty fund for “ Self- Insured ” employers and all Medicaid / Medicare set-asides
3 . Properly “ Opt Out ” and fund the obligation through an Occupational
“ WHEN AN EMPLOYEE IS HURT ON THE JOB , THE EMPLOYER MUST FOLLOW ALL PROVISIONS OF THE STATUTE ( INCLUDING VERY SPECIFIC FILING NOTICES TO THE VARIOUS REPORTING ORGANIZATIONS ).”
Accident program that includes Employer ’ s Liability coverage .
4 . Properly “ Opt Out ” and fund the obligations associated with an injured employee from the balance sheet .
5 . Go bare without Workers ’ Comp and not following the guidelines above . This is not an option in Texas contrary to popular belief . This is a misunderstanding of how the law works in Texas and the options listed above .
When an employee is hurt on the job , the employer must follow all provisions of the statute ( including very specific filing notices to the various reporting organizations ). The following is a list of the various fines that a company is subject to in Texas if they “ go bare ” and fail to follow all the proper notice provisions :
1 . Fines for failing to formally Opt Out can be up to $ 25K per day . The fine starts at $ 500 per day up to a max of $ 25K per day .
2 . Fines for failing to notify of injuries that cause an employee to have lost time ( missing one shift due to an injury excluding the shift where the injury occurred ) are $ 25K per violation ( you must notify by the seventh day of the month following the injury ).
3 . Fines for failing to notify of occupational disease are $ 25K per violation ( again , you must notify by the seventh day of the month following the injury ).
4 . Fines for failing to notify of a death due to a work-related incident are $ 25K per violation ( you must notify by the seventh day of the month following the injury ).
Attorneys were consulted regarding the fines , but they were unable to locate any statute that would limit how far back the fines can be levied . The fines start the thirty-first day following the hiring of the first comp-eligible employee and continue until the violation is rectified . Two of the attorneys believe that the most the government could go back on an administrative violation would be four years , but please note , neither attorney can point to a section of the regulation that states this . They are comparing it to Administrative Violations under the tax code .
Texas can issue a Cease and Desist order against a company for violations ( none of the attorneys that were consulted have seen one issued but confirmed the statute does allow it to happen ). +
Jeff Crenshaw , CLCS , CRIS is Director of Special Projects and Client Advocacy , and has over 15 years experience in Insurance and Risk Management .
Michelle Dennis is Sr . Vice President ; Director of Business Development at BMB .
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