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The Texas Department of Insurance's Division of Workers' Compensation (DWC) regulates the state's workers' compensation system and also certifies employers that want to self-insure.
Texas doesn't require most private employers to carry workers' compensation insurance. Employers who contract with the government are required to provide workers' compensation coverage for each employee working on the project. Some clients may also require their contractors to have workers' compensation insurance.
Employers who choose not to have workers' compensation insurance, Nonsubscribers, must file an annual notice with the Texas Department of Insurance. The must also display notices of no-coverage and give written statement to each new employee hired.
Subscribers Have Coverage
Employers with workers' compensation have some important legal protection. They have immunity from most lawsuits by injured employees. If an employer has workers' compensation insurance, a lawsuit may only go to court after it's been through the Tex Department of Insurance's (TDI) administrative dispute process. The court will consider TDI's recommendations, and only issues in dispute may be used as evidence. Previously resolved issues can't be reintroduced. The employer's insurance company pays attorneys' fees and other defense costs.
Nonsubscribers Assume More Risk
Employers without workers' compensation coverage might have to pay punitive damages if they lose a lawsuit. They also lose certain common-law defenses, such as arguing that a) the injured employee's negligence caused the injury, b) the negligence of fellow employees caused the injury, or c) the injured employee knew about the danger and voluntarily accepted it.
Assigned Risk and State Fund Coverage
Employer that can't find workers' compensation insurance through the voluntary market may buy coverage from Texas Mutual Insurance Company. This is the insurance carrier of last resort in Texas. Texas Mutual has a special program called START for employers who can't find coverage in the voluntary market. This coverage is generally more expensive than coverage bought in the voluntary market. For more information, contact us today.
Coverage Exclusions in Texas
Injuries that are excluded under the Texas Workers Compensation Act:
Cancelling a Texas Workers Comp Policy
TX employers may cancel a policy before its expiration date by notifying the insurance company and DWC by certified mail. The insurance company must refund any unearned premium. Insurance companies may not charge a penalty if you choose to cancel your policy, there may be penalties involved if the policy is subject to retrospective rating or a deductible plan. Be sure to ask about penalties before you cancel a policy. An insurance company may also cancel or refuse to renew a policy. The company must provide advance notice to the policyholder and to DWC by certified mail. Companies must give 10 days' notice if they cancel or nonrenewal a policy because of delinquent premium payments or fraud. Cancellation or nonrenewal for most other reasons requires 30 day notice.
TX Incentives for Small Employers
Employers with a premium too low to qualify for experience rating may benefit from the TX premium incentive plan. Businesses with an estimated annual premium of less than $5,000 are eligible for a 10 percent discount if they had no compensable lost-time injuries during the last year. The discount increases to 15 percent if there were no compensable lost-time injuries during the last two years. If there were two or more lost-time injuries in the last year, a 10 percent surcharge is applied.
Subscriber and Nonsubscriber Reporting Requirements
Texas employers who do not carry workers' compensation insurance coverage are required to report their non-coverage status and work-related injuries or occupational diseases to the Division of Workers' Compensation (DWC). Employers who do carry workers' compensation insurance coverage are required to report all known occupational disease and any work-related injuries that result in more than one day of lost time. Employers that fail to meet these requirements commit an administrative violation and may be subject to administrative penalties.
Workers Comp Fraud in Texas
Any person who knowingly or intentionally makes a false or misleading statement to either deny or obtain workers' compensation benefits or insurance coverage, or who, with such a purpose, misrepresents or conceals a material fact, fabricates, alters, conceals or destroys a material document or conspires to commit such acts commits an administrative violation that may result in a sanction, fine or penalty.
Texas Tax on Workers Comp Reduces in 2016
As of January 2016, the Texas Workers' Compensation Commissioner has announced it is lowering the maintenance tax rate paid on premiums by 1.478%. This is the third straight year this rate has dropped.
TX Lowers Maintenance Tax on Work Comp.
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Coverage is Paid by Employers
Employers may not charge workers for workers' compensation coverage. There are some exceptions for independent contractors and certain building and construction workers
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