Non-subscription to Worker’s Comp

What is a Nonsubscriber?

Texas businesses that elect not to purchase workers’ compensation
insurance are often referred to as nonsubscribers or non-covered employers. The term nonsubscriber stems from the term subscribing employer, which refers to employers that “subscribe” to the workers’ compensation system.

Why Do Employers Nonsubscribe?

Employers choose nonsubscription for a variety of reasons but several of the primary reasons include: the high cost of workers’ compensation insurance, the astronomical costs associated with medical claims being administered under workers’ compensation and more effective management of employee injury claims.

How Many Employers Operate as Nonsubscribers?

Approximately 114,000 of Texas’ employers are nonsubscribers. Nonsubscribing employers represent all types of businesses and range in size from only a few employees to some of the nation’s largest employers.

What Types of Companies Nonsubscribe?

Nonsubscribing businesses can be found in almost every segment of today’s business community. Businesses that cannot afford the high cost of workers’ compensation or cannot utilize reasonable measures to reduce costs associated with workers’ compensation investigate the establishment of a responsible nonsubscriber program.

What is a Nonsubscriber Program?

A responsible non-subscribing employer establishes a comprehensive program to provide workplace injury benefits. A well documented employee injury benefit plan can play in integral part in the nonsubscriber program to offer clear definition to the benefits provided by the program and many nonsubscriber programs also emphasize a specialized safety program. Insurance products also play an important role in nonsubscriber programs. A variety of nonsubscriber products provide medical benefits, wage replacement benefits, disability benefits and death benefits. While some employers opt for low deductible plans others may choose to combine their insurance products with higher levels of self-funding.

In addition to providing benefits for direct costs, nonsubscriber insurance can offer benefits that relate to liability since the tort limitation provisions of worker’s compensation do not extend to nonsubscribers. Nonsubscribing companies utilize insurance to provide additional coverage for legal costs, damage awards and more.

Dispute resolution programs are another important part of a nonsubscriber program. Nonsubscribing employers can develop internal programs to address employee disputes and/or utilize third-party mediation and arbitration programs.

*The above definitions are abbreviated and not guaranteed to apply to any proposed insurance presented by James Zander & Associates. Final provisions and coverage’s are at the discretion of the insurance carrier. Please refer to the actual policy for all terms, conditions, limitations and exclusions. If there is any conflict between the above definitions and the actual insurance policy, the policy provisions will prevail.

October 31st, 2014 by James Zander & Associates