Workers’ Compensation vs. Nonsubscribers

As business owners in the state of Texas, we are fortunate to have options when it comes to choosing workers’ compensation insurance in that we have the option to opt out of the state’s system and become a “nonsubscriber.” Employers can choose to implement their own insurance programs that provide medical benefits, wage replacement benefits, disability benefits and death benefits. In the past, this has been a much more affordable option and approximately 44% of Texas businesses operate as non-subscribers today.

However, alternative coverages and accident policies are not exact substitutes for workers’ compensation. Since “tort reform” in 1993, the cost of workers’ compensation insurance has decreased dramatically, many times bringing the cost to about the same as non-subscriber plans. There are many advantages associated with workers’ compensation and you could most likely benefit by revisiting your options when it comes to workers’ compensation and accidental insurance.

As a non-subscriber, you forfeit your common-law defenses if sued because of a work-related injury, meaning, as an employer, you cannot argue that the employee’s negligence contributed to the accident or that the employee knew the risk of injury and voluntarily assumed it. Furthermore, the court could order you to assume legal fees for the employee as well as compensation for suffering and punitive damages. Employers who subscribe to the state’s workers’ compensation program are protected by the Texas Workers’ Compensation Act which prevents employees from suing.

View the following chart provided by the Texas Department of Insurance to compare the various coverage types:

Coverage Comparison

Workers´ Compensation “Alternative” Policy Unauthorized Policy No Coverage
Who determines benefit levels? Texas law Court Court Court
Who pays medical and lost-income benefits? Insurance carrier Insurance company up to policy limits; employer pays rest Depends on the policy Employer
Who pays employer’s legal fees? Insurance company Governed by policy Depends on the policy Employer
Are benefits protected by a guaranty association? Yes Limited No No
Can aninjured worker win judgments for pain and suffering and punitive damages? No Yes, up to certain limits Yes, up to certain limits Yes, up to certain limits

ERA is a professional employer organization that provides workers’ compensation coverage to its client companies. If you have any questions about workers’ compensation or what we can do to assist you, please feel free to contact us at (214)739-0695 or visit our website at www.erapeo.com.

Advertisements

The Cost of Unemployment

As reported by Sara Murray in her blog for the Wall Street Journal, our nation has totaled “nearly $19 billion in state unemployment benefits paid in error during the three years that ended in June [2011].” Is this staggering figure worrisome to you as a business owner? The article also states that the majority of the benefits paid in error were due to “recipients claiming benefits even though they have returned to work.”

If you struggle with unemployment claims, ERA can help you a great deal. As a co-employer with several business owners, we fight claims diligently to keep our unemployment rate down. As a small business owner, you don’t have the time or the resources to investigate claims and make sure your previous employee is actively looking for other work, or is perhaps already working (and receiving compensation) for another employer.  We do. We have a fully staffed human resources department who follows up on each claim to make sure you don’t have to pay fraudulent claims. Now, more than ever, as unemployment continues to be extended, it is important that you are able to manage the claims being filed against you.

Reducing the risks and costs of unemployment claims is just one of the areas ERA can help you not only save money, but more importantly, refocus attention on core business projects and opportunities.

Contact us today to learn more.

ERA – How Outsourcing Can Benefit Your Business

As an entrepreneur/operator of your own business or the executive of a company with ultimate responsibility for its success, you are in a state of continual competition. Of course you’re competing against your commercial rivals for the business of your customers, but you are also competing against the age old adversary – passage of time.

To be more precise you are not actually competing with time itself, but you are competing with your business rivals to make better use of time. Undoubtedly some do this better than others, and that is where the real competition takes place. Naturally this is not news to you. As a business manager you understand the importance of productivity and time management as it is impacted by your employees.

On the other hand maybe you haven’t given too much thought to your own productivity and that of your top management. After all you are the planner, motivator and operational backbone. It is certainly fair to say that the success of your company depends upon your skills and creativity in steering your organization in the direction that will maximize success. Is it possible you are not as productive as you might be in your own battle against time? Are you as competitive as your business rivals? Consider this:

According to the United States Small Business Administration (SBA), small business owners/managers spend almost 25% of their time on paperwork related to their employees – that is to say paperwork that is non income producing.

Of course this is not to say that you necessarily spend that much time on paperwork. Perhaps you have already recognized such tasks are not a cost effective use of your time, and you have delegated these tasks to another management person down the line. The question remains, “Is your top management as productive as it can be?”

If not, you will find that not only much of the repetitious tedious paperwork can be shifted to a more cost effective solution, but that you can avail yourself of expertise that could help your company avoid costly litigation and potential financial disasters. Employee Resource Administration has professional Human Resource personnel that will guide you through the perilous pitfalls of employee hiring and termination, as well as managing EEOC, State Employment Commission, and OSHA encounters. Carefully planned outsourcing can greatly enhance your productivity, competitiveness and effective use of time.