What Is Nonsubscription

Click here for a presentation providing an overview of Nonsubscription to the Texas workers' compensation system. Overview of Nonsubscription .

The history of Nonsubscription in Texas: Since 1913 when the Texas legislature enacted its first workers’ compensation law, most private sector employers have had the right to either subscribe to the workers’ compensation system or opt out of it, thereby becoming a Nonsubscriber. However, few Texas employers opted out of workers’ compensation until the late 1980’s when the cost of workers’ compensation insurance began to dramatically escalate beyond reasonableness and affordability. Since then, many employers have become Nonsubscribers and established occupational injury benefit programs to address medical, wage replacement and other on-the-job injury needs.

Many businesses operate as Nonsubscribers in Texas today: The number of employers that Nonsubscribe is primarily influenced by the relative cost of workers' compensation insurance. A survey published in October 2010 by the Texas Department of Insurance Workers’ Compensation Research and Evaluation Group (“TDI Research Group”) estimates 32% of Texas employers are Nonsubscribers covering 17% of Texas employees, and half of Nonsubscribers surveyed with more than 500 employees reported they did not purchase workers’ compensation insurance because the premiums were just too high.

Businesses become Nonsubscribers for many reasons, including to:

• Reduce costs by developing a comprehensive occupational injury program that eliminates many unnecessary expenses
• Enjoy better employee relations and higher productivity by having a safer workplace with fewer and less severe occupational injuries
• Improve healthcare by working closely with healthcare professionals to provide appropriate, quality medical care at fair and reasonable costs
• Provide additional jobs by giving the employer the funds, through bottom-line program savings, to expand operations
• Embrace free enterprise by supporting the principle that government need not interfere with businesses responsible to their employees and customers

Responsible Nonsubscriber programs should: reduce frequency and severity of workplace injuries and provide quality occupational injury benefits while balancing the needs of the employer and its injured employees. Other key features of a responsible Nonsubscriber program include:

• Commitment from top management to provide the safest possible workplace
• A well written occupational injury benefit plan that provides appropriate medical care and wage replacement when an injury does occur
• A selection of quality medical providers who administer appropriate healthcare focused on getting the injured employee well
• A return-to-work program designed to expedite the injured employee’s return to productive work
• Claims care utilizing open continuing communications among the injured employee, the employer and medical providers
• A dispute resolution process to fairly address workplace safety and benefit issues

Decisions by Texas employers to establish responsible Nonsubscriber programs have proven very successful. The October 2010 TDI Research Group survey reported that 82% of Nonsubscribers with more than 100 employees are “extremely” or “somewhat” satisfied with their occupational injury programs as compared to only 57% of Texas employers in the workers’ compensation system. A previous study by the predecessor to the TDI Research Group noted, “Employees of Nonsubscribers are more satisfied with their employee injury benefits than subscribing employees are with their workers’ compensation benefits.”

An independent report examining some of the important components of a responsible Nonsubscriber program including: workplace safety practices, employee communications, benefits funding, quality medical care, claims management, regulatory compliance and more is available from the Texas Association of Responsible Nonsubscribers' ("TXANS") very informative website at www.txans.org/report.htm. (What is Responsible Nonsubscription Copyright TXANS)