Austin, TX – The TDI-DWC’s Research and Evaluation Group recently released its report on Employer Participation in the Texas Workers’ Compensation System.
In Texas, private-sector employers have been allowed the option of whether to purchase workers’ compensation insurance since 1913. Texas is the only state that allows private-sector employers the option of not purchasing workers’ compensation insurance or becoming “non-subscribers” to the state system.
The first study in Texas to estimate the percentage of employers that are “non-subscribers” to the Texas workers’ compensation system was conducted in 1993 with 11 follow-up studies between 1995 and 2018.
The Workers’ Compensation Research and Evaluation Group (REG) pulled a random probability sample (stratified by industry and employment size) of Texas employers from Texas Workforce Commission data. They also designed the survey instrument. The Public Policy Research Institute at Texas A&M University completed 2,377 interviews with year-round private-sector Texas employers during June – September 2018, 1,711 of which were subscribers and the remaining 666 were non-subscribers.
REG analyzed the survey data, calculated the estimates, and reported the results.
- Overall, the employer subscription rate fell from 78 percent in 2016 to 72 percent in 2018, but these two years remain the highest subscription rates since 1993.
- The percentage of Texas private-sector employees working for subscribers remained stable at 82 percent.
- In 2018, non-subscription rates increased among small employers and remained stable among large employers.
- The primary reasons subscribers say they buy workers’ compensation coverage are the ability to provide medical care to injured employees through networks and the lower premium rates.
- The primary reasons non-subscribers say they do not buy workers’ compensation coverage were that they had too few employees and few on-the-job injuries.
- Among large subscribers in 2018, the percentage that experienced premium decreases was the highest in eight years, the percentage that experienced increases was the lowest in eight years, and the percentage with unchanged premiums increased by 4 percent from 2016.
- Overall, Texas non-subscribers report higher levels of satisfaction than subscribers.
- An estimated 64 percent of employees employed by non-subscribers are covered by non-subscriber alternative occupational benefit plans that pay either medical or wage benefits, or both to injured employees.
- Generally, more than 45 percent of Texas non-subscribers say they are extremely or somewhat knowledgeable about the workers’ compensation reporting requirements.
View the complete report: TDI-DWC REG: Employer Participation in the Texas Workers’ Compensation System (PDF)
Source: TDI-DWC REG