The Texas Option

Since the adoption of the state’s first workers’ compensation law in 1913, Texas employers have had the option to elect whether to purchase workers’ compensation insurance for their employees. Employers that “opt out” in Texas are commonly referred to as “nonsubscribers” from workers’ compensation. Texas employees also have the right to “opt out” of their employers’ workers’ compensation coverage.

Many of Texas’ leading employers are nonsubscribers and provide their employees with an alternative to workers’ compensation that includes medical care and better wage replacement benefits. Texas law does not require employers to provide an alternative benefit plan, but most employees of nonsubscribers are covered by such plans.

Unlike other states that have recently adopted or are considering an Option for employers, Texas has a long history of large and small employers electing an alternative and providing benefit plans.

Texas Option Fast Facts

  • Active employer participation since 1989.
  • Elected by 1/3 of all Texas employers.
  • Approximately 1.43 million workers are covered by injury benefit plans (Increase of 200,000 workers between 2012 and 2014).
  • Even with an elective workers’ compensation system and injury benefits provided on a purely voluntary basis, 95% of all Texas workers’ are covered by workers’ compensation or an injury benefit plan (Option legislation in other states mandates benefit coverage for all employers)
  • Over 50,000 injury claims successfully resolved annually, at no state or federal regulatory expense.
  • Satisfaction among employers who elect the Texas Option is higher than among employers who provide workers’ compensation insurance (Reference independent studies).
  • Texas has moved from the 10th most expensive state for workers’ compensation (in 2003) to the 38th (in 2013) as a result of workers’ compensation reform and a competitive Option.