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Fewer Texas employers opting out of state workers comp system

Posted On: Dec. 4, 2012 12:00 AM CST

Fewer Texas employers are opting to leave the state's workers compensation system, according to a biennial report released by the Texas Department of Insurance.

Texas is the only jurisdiction in the nation that allows employers to opt out of the state's workers compensation system. But employer “nonsubscribers” that opt out lose workers comp system protections. They can, for example, be sued by employees.

“The percentage of Texas employers that are nonsubscribers to the workers compensation system decreased to 33% in 2012 — the second-lowest percentage since 1993,” according to the report prepared for the Texas Legislature.

In 1993, 44% of Texas employers were nonsubscribers, and two years ago 32% of all Texas employers opted out of the system, according to the report.

Lower workers comp insurance premiums and an increased availability of workers comp health care networks have led to fewer employers opting out of the system, according to the report. Past spikes in employers opting out have been attributed to an inability to control medical costs for injured workers.

The report provides an overview of the functioning of Texas' workers comp system and is available here.