with Jason Kipness
1. What does it mean to be a non-subscriber in Texas?
In Texas, employers are legally permitted to opt out of workers compensation. These employers are called “non-subscribers” because these businesses are non-subscribing to the Texas Workers Compensation Act.
2. How does becoming a non-subscriber benefit my business?
Becoming a non-subscriber can benefit your business in two primary ways. One, premiums on non-subscriber insurance policies are typically cheaper than premiums paid by employers who purchase workers compensation insurance. Two, “non-subscriber” employers can customize the benefits that are paid to their injured employees. They are not bound to pay benefits according to the Texas Workers Compensation Act. The flexibility in benefits can include the provision of better healthcare providers along with larger amounts of wage replacement benefits.
3. How do I become a non-subscriber?
To become a non-subscriber, you must first notify the Division of Workers Compensation in Austin, Texas by filing a DWC Form-005. Next, a non-subscriber employer must draft and distribute to its employees an Occupational Benefit Plan that complies with ERISA, which is a body of federal law pertaining to employee benefits. Finally, it is recommended non-subscriber employers obtain insurance to provide coverage for liability claims and pay for benefits such as medical bills and wage replacement benefits.
4. Is becoming a non-subscriber right for my business?
Before deciding to become a non-subscriber, it is recommended that an interested employer consult with legal and insurance professionals. There are numerous businesses in Texas that are non-subscribers. This includes two employers that are in the Top 10 largest companies in the United States.
Other examples of non-subscriber employers in Texas include big box retailers, hotel chains, anchor stores in malls, hospital systems, and grocery store chains.
There are also numerous privately held smaller businesses in the areas of transportation, logistics, manufacturing, retail, and food and beverage service that have made the decision to become a nonsubscriber.
If you want to see if becoming a non-subscriber is a viable option for your business, please reach out to Murphy Legal. We have attorneys with over twenty years of experience in providing legal representation to Texas non-subscriber employers.