As a small business owner, am I required to maintain a workers’ compensation policy?
Historically, maintaining a workers’ compensation policy has been a mandatory line item on the checklist of business ownership. However, the growing trend within Texas – and nearby Oklahoma – is to allow business owners the option to opt out of the heavily regulated workers’ compensation system in favor of an alternative workplace injury protocol, which the employer is free to elect and implement in accordance with Texas workplace injury laws. In other words, so long as employees are covered in the event of accident, the opt-out plan will likely be enforceable.
However, as the costs to run a business continue to rise, employers have been seeking alternative workplace injury plans from one of the dozens of available options – and some employees are claiming that opt-out policies do not offer the same rate of coverage as a traditional workers’ compensation policy.
According to statistics, 1.5 million Texas workers are not laboring under the benefits of a traditional workers’ compensation policy, and are left in the largely unregulated realm of the private injury policy – and the differences are somewhat startling. For instance, one policy only covers workplace injury-related medical bills for 2 years, whereas workers’ compensation covers expenses for as long as necessary. Other plans were found to exclude issues including bacterial infections, “sickness and disease,” and chiropractic care. As well, certain private plans provided the option for managers to accompany workers to doctors’ appointments, as well as deny claims outright if not reported by the end of a shift.
Saving money on an opt-out policy can be great for the bottom line, provided the terms will ultimately hold up under Texas law. For help in this area, or to learn more about the legalities of small business ownership, consider working with a Texas business attorney today.