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By now you are familiar that Texas allows employers to choose to opt out of Workers Compensation and provide benefits voluntarily to their employees. You are familiar with the fact that this 100+ year old option has been selected by employers large and small, from the largest, Walmart, to the small local cleaner down the street. You know that over 124,000 employers have benefited from this option, covering over 1.5 million Texas employees. To date we have provided the 1st four parts of a five part Blog Series, outlining with some detail the "Basic Differences Between Texas Non-subscription and Workers Compensation".  

The first eight questions we have covered are listed below. Please let me know if you need a copy of the answers.
1. How does the price compare between Non-subscription and workers compensation?
2. Are benefits the same between Texas Non-subscription and workers compensation?
3. Are there any other main differences between workers compensation and Texas Non-subscription?
4. What is "Exclusive Remedy" and does it apply to both workers compensation and Texas Non-subscription?
5. Many Non-subscription plans require mandatory arbitration for negligence claims. Why is that?
6. Does only Texas have Non-subscription and is it new to the State?
7. Should all eligible employers be non-subscribers?
8. Are all non-subscriber policies the same ?

This week's questions are:
9. What Non-subscriber options are available to employers and how do I know which options are best for my Insured?
As you recall from our previous discussions, there are four coverage parts to most Non-subscriber Policies:
  • Medical,
  • Lost Wages,
  • AD&D and
  • Employers Liability.
Each of these coverage parts has various options available to your Insured. I will detail what I have seen as the most widely chosen options by class of employer. In addition, the employer must choose how long to pay for Medical and Lost Wage Benefits. This is commonly called the "Benefit Period":
Benefit period options are 106 (with minor short term variations like 120 weeks), 156 and 260 weeks. Approximately 70% of our Insureds choose 156 weeks. Our very largest choose 260 weeks. We advise against 106 weeks but provide it since many existing smaller Insureds carry this Benefit Period with other Carriers and have grown comfortable with 106 weeks.
Medical:              All policies receive "No Dollar Limit" 100%.
Disability:            There are actually 2 choices on this Benefit; a percentage of weekly wage and maximum dollar amount. 90% of insured's choose either 75% or 80% of weekly wage. Some of the largest Insureds choose 90-100%. No one has chosen our lowest benefit period of 70%. We provide whatever the Insured requests.
The dollar amount varies considerably by class. Below are a few examples of what a class predominantly chooses for the maximum weekly  wage. Options are $600/700/800/900/1,000 per week
                              Restaurants/nursing homes/hotels/motels/entertainment               $600
                              Manufacturing/Auto dealers/retail                                                 $700 or $800
                              Wholesale/Hospitals                                                                       $800
                              Professional Services                                                                      $1000
AD&D: Options are (in thousands)    $100/150/250/500                Virtually all choose either $150,000 or $250,000.    The $500,000 option is available only on the largest accounts. Both $100,000 and $500,000 are rarely chosen.
Legal:    Options are $1,000,000/$2,000,000/$5,000,000                    The Smallest accounts frequently choose $1,000,000. We strongly recommend at least $2,000,000 as it covers all but one known arbitration award. Other than the smallest accounts, $5,000,000 is the most frequently chosen. Note that our EL limit is different from all others as it is used exclusively to protect the Insured. Buy a $2,000,000 limit from anyone else and you are purchasing a Combined Single Limit (CSL)  that includes within this limit the medical, wage replacement, AD&D and then EL.
SIR:(Your deductible)We provide 15 different SIR options, from a minimum of $1,000 to a maximum of $5,000,000, (see application) to accompany any comfort level and loss experience. We work closely with you to customize the Plan to provide the most cost effective SIR level.
10.   How are these Benefits communicated to the employees?
All employee benefits are required to be put in writing with a summary provided to each employee. If you receive any type of insurance from your employer, each year you receive a short explanation of those benefits. If you receive medical, then you receive a description of your co-pay, deductible, etc. This is called a “Summary Plan Description” or “SPD”. Your employer has a more comprehensive document which has greater detail than the SPD. This document is an “ERISA Plan”. Every Non-subscribing employer in Texas that provides any occupational injury benefits to its employees is required to have both an ERISA Plan and provide a copy of the SPD to its employees. As needed, we provide to your employer both an ERISA Plan and the SPD needed for the employees.

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