How employee care, claims management and cost considerations shape the decision for Texas employers
As of November 2024, 24% of Texas employers do not carry traditional workers’ compensation insurance, according to a report from the Texas Department of Insurance. Instead, they operate as nonsubscribers, a legal option that has been available in the state since 1913. For agents and brokers, that statistic represents an established market worth understanding.
However, evaluating Texas nonsubscription requires a closer look at how a program supports injured employees, manages claims and addresses an employer’s financial exposure. Potential cost savings are part of that assessment, alongside the capabilities and coverage needed to support both the employer and employee when an injury occurs.
Why employers choose the Texas nonsubscriber path
For employers evaluating their options, the case for Texas nonsubscription typically falls into three categories: employee care, claims control and cost savings.
The evolution of the nonsubscriber market has moved well beyond small businesses looking for a cheaper alternative. Midsize and large employers, including national accounts with dedicated risk managers, also use nonsubscription programs to take a more active role in claims management and return-to-work planning.
Within CPRO’s Texas nonsubscription program, target industries include retail, manufacturing, health care (long-term care, senior living, home health, hospital), grocery (both retail and wholesale), restaurants and hospitality, convenience stores and wholesale operations. Construction, oil and gas, refinery operations, heavy industrial manufacturing and marine generally fall outside the program’s appetite.
Understanding the risks
The most common concern agents raise about Texas nonsubscription is the loss of the exclusive remedy, the legal protection that, under workers’ compensation, generally prevents employees from suing their employer for a workplace injury. When an employer opts out of the workers’ compensation system, employees retain the right to file a lawsuit.
That distinction makes liability protection an important part of the decision. Alongside the benefits available to an injured employee, employers need to consider how a program would respond if that employee brings a claim against the business.
Texas nonsubscription insurance policies, subject to a self-insured retention, generally provide medical benefits, lost-time wage replacement and employers’ liability and legal cost coverage for on-the-job injuries. These coverages can help address both the employee’s recovery needs and the employer’s potential legal costs and liability, subject to the policy’s terms, limits and exclusions.
Evaluating that protection means understanding which costs the policy covers and which remain with the employer. Weighing those responsibilities alongside potential savings and greater control over claims gives employers a fuller picture of whether nonsubscription fits their business need.
Why claims handling makes or breaks a nonsubscription program
If the case for Texas nonsubscription rests on claims control and employee care, then the quality of a program’s claims operation is central to its effectiveness. Within Arrowhead Programs, the recent integration of Combined Group Insurance Services and CPRO Associates brings together capabilities that support both priorities.
The integration brought together CPRO’s underwriting capabilities and carrier relationships with the internal third-party administrator (TPA) and agent-client service capabilities of the Combined Group team. The result is an operation that can manage claims in-house, connecting underwriting, claims administration and service within the same organization. The combined capabilities support employers from program placement through the management of a workplace injury.
Recognizing the opportunity
A Texas nonsubscription program is only as effective as the team managing its claims. Early intervention, access to appropriate medical care and coordinated return-to-work support give substance to a program’s promise of employee care and claims control. Examining those elements together creates a clearer basis for deciding whether a program fits the business.
Nonsubscription represents an established market and an opportunity for agents who understand how it works. That understanding can open conversations with the nearly 1 in 4 employers already operating as nonsubscribers, as well as those exploring a change. Helping them assess the coverage, claims support and potential savings in the context of their business is an opportunity to bring fresh solutions and open doors in an established market.
This material has been prepared for general informational purposes only, is intended to apply generally rather than to any specific company and presumes appropriate discretion will be exercised regarding any particular situation.
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