Texas License Chapter 9
The employer has three basic defenses:
1. Contributory negligence - The employee contributed to the cause of the injury 2. Assumption of risk - The employee was involved in actions that were not a part of their job when they were injured, and therefore assumed the risk 3. Injury caused by the negligence of a fellow employee
Legal beneficiary
A person entitled to receive a death benefit under the Workers Compensation Law. (Spouses and children only)
Compensation Procedure
After an injury there are specific time restrictions in the process of filing a claim for workers compensation: 30 days for the employee to report the injury to the employer. 8 days for the employer to report the claim to the TWCC. 7 days for the insurance company to pay or contest the claim.
Medical Care
All reasonable and necessary medical expenses are paid without a time limit or dollar amount. This continues until the injured employee has either recovered or reached a point where no further recovery is possible, and additional medical treatment is unnecessary. This includes rehabilitation and necessary appliances. The employee also has a choice of physicians and medical facilities.
Voluntary compensation-
Allows adding coverage for employees who do not fall under the Workers Compensation Act as a measure of goodwill and possibly avoiding Employers Liability lawsuits. subrogation
Employment Covered
An employer is eligible to purchase Workers Compensation if they have one or more employees; with the following exceptions: The Workers Compensation Act is mandatory for state employees. Compensation Laws do not apply to private employment of domestic servants, farm employees, or casual employees (irregular or sporadic employment)
Texas Workers Compensation Insurance Fund (Competitive State Fund)
An insurance company created by state law to take high risk insureds that cannot find coverage with private insurers, and also compete for good risks with private insurers. The fund is capitalized with revenue bonds. The fund must maintain a premium to surplus ratio of 3:1.
Outer Continental Shelf Lands Act
Applies to Gas and Oil workers
The Jones Act
Applies to Vessel workers
Federal Employers Liability Act
Applies to railroad workers
Average Weekly Wage (AWW)
Average weekly wage is determined by averaging the last 12 weeks of pay to determine an employee's usual salary on which to base benefits. The average weekly wage is also compared with statewide AWW for the same occupation.
Death and Burial Benefits
Benefits are paid to legal beneficiaries of employees suffering fatal injuries. Income benefits are paid to: Spouse, until they die or remarry Children under 18, or if a full-time student, until 25 Burial allowance $6,000 **If there are no beneficiaries, benefits are paid to the subsequent injury fund.**
Prohibited Acts
Certain activities will relieve the employer of liability under the Workers Compensation Law: The employee creates an occasion to hurt him/herself through activities not a part of their job. The employee's injury or death is a result of willful intention. Intoxication on the job causing harm to the employee. (Exception: If the employer was aware of the intoxication and allowed the situation to continue.)
Compulsory vs. Elective
Compulsory law requires an employer to provide employee workers compensation benefits. In Texas, the purchase of workers compensation is elective. The two parties to a workers compensation act are the employer and employee. Before this law was passed, an employee had to prove negligence on the employer's behalf. The employee could only collect benefits if the employer was found negligent.
Employers Liability Insurance
Employers Liability Insurance provides liability coverage (minimum limit $100,000 per occurrence) to employers in the following situations: Third parties may be liable for employee injuries, but then sue the employer for indemnity on the basis of contributory negligence of the employer. (i.e. temporary agency) Spouses and children of injured employees may sue the employer for loss of care and loss of services. Employees may sue based on the dual capacity doctrine. (i.e. product liability) Spouses and children of an employee killed on the job may sue for exemplary damages based on gross negligence of the employer.
Employer Election
Except for private employers, or if otherwise provided by law, an employer may elect to obtain Workers Compensation Insurance coverage. An employer who elects to obtain coverage is subject to the Workers Compensation Law.
Supplemental Income Benefits
If an employee has an impairment rating of at least 15% permanent disability and is unable to obtain employment earning at least 80% of his/her previous AWW, this fund will supplement his income until his/her earnings reach 80%. An employee that is eligible for supplemental income benefits may also receive vocational rehabilitation. The Commission can refer an employee to the Texas Rehabilitation Commission so they can return to the work force.
Monopolistic vs. Competitive
In 6 states, coverage is only available through a monopolistic state fund Private carriers are not permitted to provide workers compensation insurance in these 6 states. In 13 states, including Texas, workers compensation insurance may be obtained through private carriers or a competitive state fund. Competitive states allow private carriers to compete for a share of the workers compensation business.
Part 6- Conditions
Inspect workplace Annual aggregate Assignment Cancellation/non-renewal
Self-Insured Employers and Employer Groups
Instead of paying premium to an insurance company, some companies choose to self-insure. They keep the money they would have paid in premium in a separate account, and hire an outside agency to administer the workers compensation plan. These companies keep their defenses because they are still providing protection for their employees. (I.e. hospitals) These groups are protected by the Texas Certified Self-Insurer Guaranty Association in case of bankruptcy.
Exclusions to Employers Liability
Intentional injury Discharge or discrimination of employees
Lifetime Income Benefits
Lifetime benefits are paid for the loss of 2 body parts. Benefits are 75% AWW up to 100% statewide AWW with an automatic 3% annual increase in benefits up to the maximum. (Example: 2 hands, 2 eyes, 2 legs)
Computation of Benefits
Loss of income is paid on a varying scale, for a maximum of 104 weeks.
Job Classification, Payroll, and Rates
Manual Rate for Job Classification X per $100 payroll for that claissification = $premium
Other States Insurance
Other States Insurance for employees located in states not listed in the declarations for temporary, newly acquired, or transient operations. (Normally for stays over 30 days.)
Experience Modification Factor
Past years actual losses. X. Basic premuim = $ experiance rated premuim
Premium
Premiums charged for workers compensation are based upon the payroll of the employer. Rates applied are per $100 of payroll.
Exclusive Remedy
Recovery of workers compensation benefits is the exclusive remedy of an employee covered by workers compensation against the employer for a compensable injury or death. However, spouses or heirs can recover exemplary damages due to an intentional act or gross negligence of an employer.
Temporary Income Benefits
Temporary income benefits are paid to disabled employees who have not yet reached maximum medical improvement (MMI). Benefits are payable at least 70% of the difference between their AWW before injury up to 100% of the statewide AWW.
Other Sources of Coverage:
Texas Workers Compensation Insurance Fund (Competitive State Fund) Self-Insured Employers and Employer Groups
Worker's Compensation Ins
Texas workers compensation laws were established under the Texas Labor Code - Title 5. The purpose of Texas workers compensation laws are to provide a just and fair means of compensating employees, who are injured or killed on the job or who contract an occupational disease. The compensation made to the employee is done without regard to fault or negligence. (The loss must be work-related and there must be cause and effect relationship)
Statute of Limitations
The employer must be notified within 30 days after the injury occurs. Failure to do so relieves the employer of all liability. The employee must file a claim within one year. If they do not file a claim within one year, the employer is relieved of liability. (The commission can overturn this decision if there is just cause.)
Your Duties If Injury Occurs
The insured is obligated to inform the insurer "at once" and provide the names of witnesses, injured persons, all legal notices and demands, and any other pertinent information. The insured must provide all services required by Workers Compensation Law. The policyholder must cooperate with the insurer in the investigation.
Our Duty to You for Claim Notification
The insurer is obligated to notify the employer of any claim that is filed against their policy.
Subrogation
The net amount recovered by a claimant in a third party action will be used to reimburse the insurance carrier for benefits, including medical benefits that have been paid for the compensable injury. If there is money remaining after this payment, the insurance company will credit it towards future workers compensation benefits.
Impairment Income Benefits
These benefits begin the day after the employee reaches maximum medical improvement (MMI). The employee receives 3 weeks of income benefits (based upon the AWW) for every percentage point of permanent impairment. For example, if an employee reaches MMI and is determined to have a permanent impairment causing a 4% loss; this employee will receive 12 weeks of their AWW as a benefit.
Subsequent Injury Fund
This fund is used to compensate an injured employee for lifetime income benefits if a subsequent (second) compensable injury, together with the effects of a previous injury, results in a condition which entitles the injured employee to receive lifetime income benefits. The fund receives money by collecting the benefits from insurers when a compensable death occurs and there is no legal beneficiary. The fund is maintained by the TWCC. In addition, the fund is used to reimburse the insurer for any overpayment of benefits if the TWCC reverses a compensation award on appeal.
Waiver of subrogation
This waives the company's right of subrogation for an additional premium against a specific person or organization named in the endorsement or on a blanket basis.
Employee Election
Unless an employee gives an employer written notice to reject workers compensation, he/she automatically waives the right of action under common law, or state statutes for personal injuries or death due to employment. If an employee chooses to reject workers compensation and rejects common law rights, he/she must give notice in writing within 5 days of employment, or compensable injury. The employer cannot require an employee to make this statement. Also, the employer retains all defenses.
Selected Endorsements
Voluntary compensation Waiver of subrogation
Waiting Period
Workers compensation benefits are not payable unless the employee is disabled for at least one week. Compensation begins after the first week. If the disability continues for at least four consecutive weeks, the compensation will be retroactive to the first day of the injury.
U.S. Longshore and Harbor Workers Compensation Act
applies to Dock workers
Workers Compensation Insurance
territorial clause. Texas benefits are available to Texas workers injured anywhere in the world declarations, There is no dollar limit listed for medical expenses. Texas also has an extra Workers Compensation agrees to assume liability for an employer in the states listed in the if they have "significant contacts" in Texas or their principal employment is located in Texas. (I.e. business trip) (normally trips of 30 days or less)
