Texas Public Policy Foundation Report Raises Serious Policy Concerns About Non-Mandatory Workers’ Compensation Systems

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Fred C. Bosse, Southwest Region Vice President for the American Insurance Association (AIA), issued the following statement in response to the Texas Public Policy Foundation’s report entitled: The Lone Star State Model for Helping Injured Workers.

Fred C. Bosse, Southwest Region Vice President for the American Insurance Association (AIA), issued the following statement in response to the Texas Public Policy Foundation’s report entitled: The Lone Star State Model for Helping Injured Workers. The report inaccurately characterizes the Texas workers’ compensation system as an opt-out system, and asserts that the opt-out model would serve other states well.

Mr. Bosse’s statement follows:

“AIA strongly disagrees with the assertion that the Texas’ workers’ compensation system is an opt-out system. That is simply not true. Texas has an opt-in model, where employers have the option to opt into the system. The strength and stability of the Texas’ workers’ compensation marketplace is due to the reforms that were enacted in 2005.

However, both the Texas system and opt-out are models of a non-mandatory workers’ compensation system. The non-mandatory workers’ compensation model – whether a Texas opt-in model or an opt-out model – raises policy questions that proponents need to consider when evaluating its merit. These include: uniform protection of workers and the employers; recompense for a work-related injury should be uniform, regardless of employer; no cost shifting to other benefit programs or to public benefit programs; uniform adjudication of disputes; broad coverage of injuries and diseases, with no categorical or anatomical exclusions; incorporating incentives for workplace safety; and ensuring payer solvency and benefit security.

Proponents of a non-mandatory system have not done this. One only need look north of Texas to Oklahoma and the state supreme court’s 2016 ruling in Vasquez v. Dillards to see the instability caused by opt-out. Any workers’ compensation system must include state oversight while reaffirming employers’ basic obligations to their workers. Opt-out does not do this.”

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