SRC-PNG H.B. 2511 76(R)   BILL ANALYSIS


Senate Research Center   H.B. 2511
76R10340 JMM-FBy: Giddings (Armbrister)
Economic Development
5/13/1999
Engrossed


DIGEST 

Currently, the amount of paperwork that must be processed within the
Workers' Compensation system lengthens the time required to process
workers' compensation claims and disputes. The Texas Workers' Compensation
Commission (commission) staff sometimes has difficulty in obtaining or
verifying workers' compensation coverage and claims information from
employers, certified selfinsurers, and political subdivisions. The
commission currently utilizes more than 100 full-time employees to enter
data into a database. The volume of information processed in this manner is
too large to allow for effective quality control, and thus errors are made
during data entry, which makes later analysis difficult. Additionally, in
some cases employers will send reports of injury to the commission instead
of the insurance carrier which causes delays in the delivery of medical
care to injured workers. H.B. 2511 permits the commission, by rule, to
allow or require electronic transmission of information to be used in lieu
of transmitting information via paper form. This bill authorizes the
commission to consult a data collection agent to fulfill the data
collection requirements and adopt rules necessary to implement the data
collection requirements. This bill also requires the executive director of
the commission to develop a plan and appoint a task force to incorporate
electronic reporting, information, and financial exchanges between parties
in the workers' compensation system.  The commission is authorized to adopt
rules to establish the coverage and claim administration contact
information.   

PURPOSE

As proposed, H.B. 2511 requires a certified self-insurer and political
subdivision to file notice of the coverage and claim administration contact
information with the Texas Workers' Compensation Commission (commission).
This bill also prohibits the employer from transferring the obligation to
report injuries to the insurance carrier. It also provides a penalty for an
employer or insurance carrier if an employer or insurance carrier fails to
identify or confirm an employer's coverage status and claim administration
contact information.  

RULEMAKING AUTHORITY

Rulemaking authority is granted to the Texas Workers' Compensation
Commission in SECTION 1 (Section 401.024, Labor Code), SECTION 2 (Section
406.006, Labor Code), and SECTION 3 (Section 406.009, Labor Code) of this
bill. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 401.024, Labor Code, as follows:

Sec. 401.024. TRANSMISSION OF INFORMATION. (a) Defines "electronic
transmission."  

(b) Authorizes the Texas Workers' Compensation Commission (commission), by
rule, to permit or require electronic transmission to be used instead of
the specified form, manner or procedure, notwithstanding other provisions
in this subtitle that specify the form, manner, or procedure for the
transmission of specified information. Provides that if electronic
transmission of specific information is not authorized or permitted by
commission rule, transmission of that information is governed by any
applicable statute or rule that prescribes the form, manner, or procedure
for the transmission, including standards adopted by the Department of
Information Resources.  
 
(c) Authorizes the commission to designate and contract with a data
collection agent in order to fulfill the data collection requirements of
this subtitle.  

(d) Authorizes the executive director of the commission (executive
director) to prescribe the form, manner, and procedure for transmission of
any authorized or required electronic transmissions, including requirements
related to security, confidentiality, accuracy, and accountability.  

SECTION 2. Amends Section 406.006, Labor Code, as follows:

Sec. 406.006. New Title: INSURANCE COVERAGE AND CLAIM ADMINISTRATION
REPORTING REQUIREMENTS; ADMINISTRATIVE VIOLATION. (a) Requires a certified
self-insurer and a political subdivision to file notice of the coverage and
claim administration contact information with the commission no later
than10 days after the coverage or claim administration agreement takes
effect, unless the commission adopts a rule establishing a later date for
filing. Provides that coverage takes effect on the date on which a binder
is issued, a later date and time which is agreed to by the parties, on the
date provided by the certificate of self-insurance, or on the date provided
in an interlocal agreement that provides for self-insurance. Authorizes the
commission to adopt rules in order to establish the coverage and claim
administration contact information required under this subsection. Makes
conforming changes. 

 (c) Sets forth that an insurance company, certified self-insurer, or
political subdivision commits a violation if the person, rather than
company, fails to file notice with the commission as provided by this
section. (d) Defines "political subdivision" in this section.  

SECTION 3. Amends Section 406.009, Labor Code, by adding Subsections
(c),(d), and (e), as follows: (c) Authorizes the commission to designate a
data collection agent, implement an electronic reporting and public
information access program, and adopt rules necessary to implement the data
collection requirements of this subchapter. Authorizes the executive
director to establish the form, manner, and procedure for the transmission
of information to the commission as provided by Section 402.042(b)(11)
(General Powers and Duties of Executive Director). 

(d) Authorizes the commission to require an employer or insurance carrier
subject to this subtitle to identify or confirm an employer's coverage
status and claim administration contact information as necessary to achieve
the purposes of this subtitle. (e) Sets forth that an employer or insurance
carrier commits a Class C administrative violation if that person fails to
comply with Subsection(d).  

SECTION 4. Amends Section 406.051(c), Labor Code, to prohibit the employer
from transferring the obligation to report injuries to the insurance
carrier, rather than commission, under Section 409.005 (Report of Injury;
Administrative Violation).  

SECTION 5. Amends Section 408.003(e), Labor Code, to make a conforming
change.  

SECTION 6. Amends Section 504.002(a), Labor Code, to provide that Sections
406.006 (Insurance Company Notice; Administrative Violation),
406.007(Termination of Coverage by Employer; Notice), 406.008 (Cancellation
or Nonrenewal of Coverage by Insurance Company; Notice), 406.009
(Collecting and Maintaining Information; Monitoring and Enforcing
Compliance), rather than Chapter 405 (Repealed), apply to and are included
in this chapter except to the extent that they are inconsistent with this
chapter.  

SECTION 7.(a) Effective date: September 1, 1999, except as provided by
Subsection (c) of this section.  

(b) Sets forth the executive director of the commission's requirement to
develop and publish a plan to incorporate electronic reporting of
information and financial exchanges between the parties in the workers'
compensation system within a certain time period. Specifies provisions for
the plan.  Specifies the executive director's requirement to appoint a
taskforce and hold public hearings. Sets forth that the plan is designed to
achieve a 30 percent reduction in paper communication requirements within a
certain time period. (c) Sets forth that the change in law made by this Act
to Section 406.006, Labor Code, with regard to a certified self-insurer and
political subdivision not required to file notice of coverage before the
effective date of this Act, takes effect January 1, 2000. 

 SECTION 8. Emergency clause.