Texas workers comp costs declining for employers who opt in: CommissionerReprints
About two-thirds of Texas employers purchase workers compensation insurance or provide an alternative benefit plan for their injured employees, and declining comp claim frequency and other comp reforms in Texas have allowed insurers to lower comp pricing for those companies, Texas Workers Compensation Commissioner Rod Bordelon said Thursday.
Texas is the only state that allows employers to opt-out of providing workers comp or other benefits for injured employees. About 67% of employers in the state purchase workers comp coverage or create plans that provide benefits for injured workers, Mr. Bordelon told Business Insurance.
Employers with fewer than five employees are more likely to be uninsured than larger companies, Mr. Bordelon said. A little more than 5% of Texas employees — about 500,000 people — have no workers comp coverage or similar benefits.
Meanwhile, a 27% decrease in workplace injury rates and a 22% decrease in claims filed since 2004 have led workers comp insurance rates to fall 50% from 2003 to 2011, according to a statement Tuesday by the Austin-based Texas Department of Insurance.
Mr. Bordelon told Business Insurance that he largely credits state workers comp reforms, including a bill passed in 2005, for improvements in workers comp frequency and severity. That includes a decline in medical costs from 2001 to 2011.
“We instituted a number of new regulatory measures in the state of Texas as a result of those reforms,” Mr. Bordelon said. “Most notably medical treatment guidelines, fee guidelines, pharmacy formulary, a revised dispute resolution process and a more effective enforcement standard. … (The reforms) drastically changed the way in which workers compensation is regulated in Texas and the positive impact it's had on the market.”