Texas is currently the only state that allows employers to choose whether or not they will provide tx workers’ compensation coverage to employees. The only exception to this is that public employers and employers that enter into a building or construction contract with a government entity must provide insurance in case an employee suffers a work-related injury.
Workers’ compensation is a state-regulated insurance program that pays medical bills and also replaces at least partial lost wages for employees who do become injured at work as well as those that have suffered some sort of work-related diseases or illnesses. The Workers’ Compensation Act ensures that injured workers are compensated fairly and appropriately for workplace injuries.
Employers who choose to have insurance may purchase insurance policies from private insurance companies or they may choose to self-insure. They must, however, meet the requirements of the Texas Workers’ Compensation Act and be certified by the Texas Department of Insurance, Department of Workers’ Compensation.
The Texas Worker’s Compensation Act
While still allowing private employers to choose whether or not to maintain workers’ compensation insurance, employers who decline coverage must notify the state and any employees stating that they do not intend to maintain workers’ comp insurance.
Addressing public concerns, the Texas Legislature adopted the Texas Worker’s Compensation Act (Senate Bill 1) back on December 13, 1989. The Act was immediately challenged in court but was upheld by the Texas Supreme Court. A Senate Select Interim Committee concluded that health care networks should become part of the workers’ comp system and that treatment guidelines must be developed to direct the types of care given to injured workers.
The Act needed to address additional concerns about the high costs of medical treatment and benefit pay along with the involvement of attorneys, even in the simplest and most routine claims. This called for the development of medical fee and treatment guidelines in an attempt to control medical costs and limit attorney’s fees to pay for their time and any actual expenses, up to a maximum of 25% of an injured worker’s total recovery.