HBA-DMD H.B. 2511 76(R)BILL ANALYSIS


Office of House Bill AnalysisH.B. 2511
By: Giddings
Business & Industry
7/30/1999
Enrolled



BACKGROUND AND PURPOSE 

Prior to the 76th Legislature, the amount of paperwork that must have been
processed within the Workers' Compensation system lengthened the time
required to process workers' compensation claims and disputes.  The Texas
Workers' Compensation Commission (commission) staff sometimes had
difficulty in obtaining or verifying workers' compensation coverage and
claims information from employers, certified self-insurers, and political
subdivisions.  The commission utilized more than 100 full-time employees to
enter data into a database.  The volume of information processed in this
manner was too large to allow for effective quality control, and thus
errors were made during data entry, which made later analysis difficult.
Additionally, in some cases employers sent reports of injury to the
commission instead of the insurance carrier which caused 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. H.B. 2511 requires a
certified self-insurer and political subdivision to file notice of the
coverage and claim administration contact information with the 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

It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated 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 Subchapter C, Chapter 401, Labor Code, by adding Section
401.024, as follows: 

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

(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 an
insurance company from which an employer has obtained workers' compensation
insurance coverage, a certified self-insurer, and a political subdivision
to file notice of the coverage and claim administration contact information
with the commission no later than 10 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. 

(b) Makes no change.

(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), and 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) Requires executive director of the commission 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. Requires the
executive director to appoint a task force and hold public hearings.
Requires the plan to be 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.