Do I have to carry Workers' Compensation Insurance?

Texas law allows most private employers to "opt out" of the WC system.  The process is simple, and requires filing a DWC-5 form with the Division of Workers' Comp.-Texas Department of Insurance.

What are the advantages of opting out?

Employees are required to report injuries immediately, and seek medical treatment only from company approved medical providers.  Typical Workers’ Comp. premiums can be reduced substantially by purchasing an alternative insurance product.

Do I have to adopt an ERISA Plan if I opt out of Workers' Compensation?

ERISA (Employment Retirement Income Security Act of 1974) requires that if an employer provides benefits for medical, sickness, disability, death, etc., they are under ERISA.

What documents do I need to comply with ERISA?

The Employer or Plan Sponsor would develop a Plan Document which details benefits available, claims procedures, denials, and claim appeals.  The Plan Document would also provide employee injury reporting requirements and claim appeal procedures.  Employees would receive a handbook known as the Summary Plan Description (SPD), which is a summary of the benefits and procedures provided in the Plan Document.

How does ADR work?

In the event of a dispute between the employee and employer regarding a work-related injury, the employee would be required to participate in a logical three step process in order to resolve any dispute or disagreement.  These steps typically include discussing with management, mediation, and arbitration.  A recent Texas Supreme Court ruling held that a Texas non-subscribing employer (Labatt Food Service, LP) has a right to require survivors of a deceased employee to arbitrate wrongful death claims against the employer.