TX: Don't Mess with Nonsubsribers!

Sunday, March 13, 2005 | 0

Is Texas Senate Taking Its Eye Off the Ball of Workers' Comp Reform by Messing with Nonsubscription?

1. Senator Gonzalo Barrientos, D-Austin, introduced Senate Bill 713 two weeks ago to entirely outlaw post-injury settlement agreements and force all disputes between injured workers and "nonsubscribers" to Texas workers' compensation into the courthouse.

2. To strip away the right of injured employees and employers to resolve disagreements outside of the courthouse is clearly bad public policy.

3. Over the past week, there have been discussions within the Texas Senate State Affairs Committee (chaired by Senator Robert Duncan, R-Lubbock) to incorporate the subject of SB 713 into the big workers' compensation overhaul bill (SB 5, authored by Senators Staples and Nelson).

4. On Tuesday of last week, Senators requested that any amendments to SB 5 be offered by noon the next day (Wednesday) for consideration at the Senate State Affairs Committee hearing on Thursday (3/3/05).

5. In response, a draft revision to Senator Barrientos' SB 713 was prepared by an Austin law firm (not PartnerSource), which would only outlaw post-injury settlement agreements that do not meet certain minimum standards of fairness. (Although I believe the Texas courts have already established standards of fairness for such agreements and see no compelling need for such legislation, further dialogue on this point seemed healthy.)

6. PartnerSource and other companies privately and confidentially circulated that draft revision to SB 713, for discussion purposes only, among interested persons. To the best of my knowledge, that altered version of SB 713 was always circulated with a cover message identifying it as a DRAFT for discussion purposes. Apparently this document found its way through cyberspace back to Senator Barrientos and the State Affairs Committee.

7. Instead of seizing this opportunity to have a meaningful dialogue on the subject, Senator Barrientos (an advertising and public relations professional by trade) elected to implemented a campaign of intimidation against nonsubscribers (through newspapers, television and  believe it or not  law enforcement agencies), claiming that our firm misrepresented his SB 713.

8. On a more constructive note, the Senate State Affairs Committee has not accepted SB 713 as an amendment to SB 5.

9. And yesterday, Senator Duncan proposed new language on post-injury waivers that is much more narrowly focused than SB 713.

10. But these current events beg a fundamental question: What does this attempt to outlaw post-injury settlement agreements between injured employees and nonsubscribing employers have to do with Texas Workers' Compensation Reform!

11. Our firm knows of no credible evidence that nonsubscribers are abusing injured workers through the use of post-injury waivers. In fact, the only two companies we know of that use such agreements as a condition of eligibility for injury benefits have substantially improved their (a) ERISA injury benefit coverages, (b) employee disclosures, and (c) claims administration practices over the past few years to help eliminate any such concerns.

12. In another development, The Dallas Morning News, in last Sunday's editorial section, announced that they are in favor of mandatory workers' comp, and have promised to lay out their position in this coming Thursday's paper (3/10/05). Watch for it and respond.

13. THE MEDIA AND LEGISLATURE NEED TO UNDERSTAND THAT MAKING NONSUBSCRIPTION LESS ATTRACTIVE WILL NOT HELP THE STATE OR TEXAS OR THE TEXAS WORKERS' COMPENSATION SYSTEM IN ANY RESPECT. Consider these facts:

a. 38% of all Texas employers are nonsubscribers.
b. Nonsubscription is dominated by retail, healthcare, food service, transportation, and manufacturing employers with high occupational injury frequency. (Such injuries are an unfortunate fact of life. And nonsubscribers are HIGHLY MOTIVATED to prevent such injuries due to the negligence liability exposure imposed upon them by law.) Nonsubscription creates no "adverse selection" against the Workers' Compensation System. Removing this high frequency of on-the-job injuries may even be helping the System survive. Does anyone really want to further burden the already broken Texas Workers' Compensation System by trying to force these employers back in?
c. 76% of all Texas employees are covered by the Texas Workers' Compensation System. This represents more workers than are covered by almost every other state workers' compensation system in the United States! How big does the Texas system have to be in order to succeed?!
d. The TWCC's Research and Oversight Council has repeatedly reported higher employee satisfaction in the nonsubscriber environment than in the subscriber environment. No credible evidence whatsoever has been presented to indicate that nonsubscription is contrary to the best interests of injured workers. The liability exposure of nonsubscribers creates a balance of interests that is working well!
e. Nonsubscription can also be credited with acting as a "safety valve" to the current Workers' Compensation System, saving tens of thousands of jobs in Texas that would have otherwise been lost to China, India, Mexico and other places.

ATTEMPTS TO CURTAIL THE FREE-MARKET, ADMIRABLY FUNCTIONING, TEXAS-ADVANTAGE OF NONSUBSCRIPTION HAVE NOTHING TO DO WITH WORKERS' COMPENSATION REFORM. THE LEGISLATURE NEEDS TO KEEP ITS EYE ON THE BALL!

by Bill Minick
President
PartnerSource, Inc.
PartnerSource Insurance Agency, Inc.
8117 Preston Road
Suite 530
Dallas, TX 75225
214-239-4584 - Voice
800-248-7599 ext. 4584 - Toll Free
214-239-4581 - Fax
www.partnersource.com