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Opt-out Texas sees dip in employers offering comp coverage: Report

Posted On: Dec. 4, 2018 10:46 AM CST

Opt-out Texas sees dip in employers offering comp coverage: Report

The number of Texas employers who do not carry workers compensation insurance for their employees increased 6 percentage points between 2016 and 2018, according to a biennial report from the Texas Department of Insurance’s Division of Workers’ Compensation.

The report, released Monday, revealed that while the figure dipped — with 28% of employers not carrying coverage in 2018 compared with 22% in 2016 — the percentage of Texas employees who work for nonsubscribers did not change from 2016 and remained at 18%, representing roughly 1.8 million employees in 2018.

Texas workers comp law requires that the state legislature is updated biennially on the state of the system, the only opt-out state in the country that allows employers to operate without workers compensation coverage.

The report highlights that 82% of Texas private-sector employees, or an estimated 8.4 million employees, were employed by the 72% of employers — an estimated 267,000 employers — that have workers compensation coverage in Texas.

Since 2003, workers compensation rates have dropped nearly 64%, the report said, giving credit to the reforms and innovations, implemented in 2005 and beyond.

“Texas has been an innovator in workers compensation policy by implementing proven approaches found in other health care delivery systems, like evidence-based medicine, a pharmacy formulary, electronic billing, and Medicare-based fee schedules to control costs,” the report states.

The report also updated lawmakers on the status of the new DWC Fraud Unit and Prosecution teams, in place since 2016. The teams have been “actively investigating fraud referrals, pursuing prosecutions, and to date, have obtained 20 indictments, secured 17 convictions, and obtained orders for restitution exceeding $612,000 for workers’ compensation,” according to the report.

DWC said its focus “for the next two years will be to continue leveraging technology and its existing resources to improve administrative efficiencies for both DWC and system stakeholders,” according to the report. “DWC will continue working on ways to increase electronic transmission of information, streamline internal business processes, open lines of communication with system stakeholders, and eliminate outdated and unnecessary regulatory requirements.”

The division also plans to continue “these efforts by implementing new rules that eliminate barriers for telemedicine and increase scrutiny for compound drugs to ensure that these drugs are safe and medically necessary for injured employees,” the report states.