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.