Recently in Texas and other states there has been a new trend emerging where employers are choosing to “opt out” of the traditional Worker’s Compensation benefit scheme. By opting out of the Worker’s Compensation scheme companies are self-insuring themselves and foregoing protections that Worker’s Compensation provides to the company when an employee is injured on the job. However, what many feel the companies are betting on is that injured workers will not retain the services of an attorney, and will rely on their employer to provide them the medical care and benefits they need and deserve. This reliance can lead to issues of proper coverage and adequate benefits to the injured worker.
There are several reasons companies are choosing to “opt out,” but the main one is cost savings to the company at the potential expense of the worker. Over the last 30 years, insurance premiums have risen rapidly to make it expensive for companies to pay for Workers Compensation insurance. Due to rising costs, companies are now increasingly choosing to self-insure themselves. However, due to these changes there are possibly reductions to the benefits employees receive if they are injured on the job. Companies are hiring consultants and attorneys to write policies that are not part of the worker’s compensation act. In many cases these company policies are far more restrictive on the qualifications for and actual benefits received by an employee. These potential restrictions can lead to injured workers being denied compensation for injuries that resulted as part of their employment.