Strike House Floor Amendment No. 31 by Eiland and substitute
Amend CSHB 7 on page 333, between lines 22 and 23, by
inserting a new Article 2A in the bill, to read as follows:
ARTICLE 2A. ALTERNATIVE COMPENSATION PILOT PROGRAM
SECTION 2A.001. Title 5, Labor Code, is amended by adding
Subtitle D to read as follows:
SUBTITLE D. ALTERNATIVE COMPENSATION PROGRAMS
CHAPTER 551. PILOT PROGRAM ON USE OF INSURANCE POLICY TO PROVIDE
MEDICAL AND INCOME BENEFITS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 551.001. DEFINITIONS. In this chapter:
(1) "Alternative benefit plan" means a plan of health
care benefits and income benefits offered under this chapter by an
employer to an employee who sustains an injury in the course and
scope of employment.
(2) "Commissioner" means the commissioner of
(3) "Course and scope of employment" has the meaning
assigned by Section 401.011(12).
(4) "Department" means the Texas Department of
(5) "Employer" means a person who employs one or more
(6) "Employee" means a person in the service of
another under any contract of hire, whether express or implied or
oral or written. The term includes an employee employed in the
usual course and scope of the employer's business who is directed by
the employer to perform services temporarily outside the usual
course and scope of the employer's business. The term does not
include an independent contractor or the employee of an independent
(7) "Group health insurance policy" means a group,
blanket, or franchise insurance policy that provides benefits for
health care services resulting from accident, illness, or disease.
For purposes of this chapter, the term includes a group hospital
service contract or a group subscriber contract.
(8) "Program" means the alternative benefit plan pilot
program established under this chapter.
(9) "Qualified insurance policy" means a group health
insurance policy approved by the commissioner as provided by
Sec. 551.002. EXPIRATION. The program is abolished and
this chapter expires effective September 1, 2009.
[Sections 551.003-551.050 reserved for expansion]
SUBCHAPTER B. GENERAL POWERS AND DUTIES OF
COMMISSIONER AND DEPARTMENT
Sec. 551.051. EFFECT OF EMPLOYER PARTICIPATION. An
employer who elects to participate in the program under this
chapter is considered a subscribing employer to the workers
compensation system of this state for all purposes under Subtitle
Sec. 551.052. IMPLEMENTATION OF PROGRAM; POLICY APPROVAL
PROCESS. (a) The commissioner shall develop and operate a pilot
program under which an employer may offer an alternative benefit
plan to the employer's employees through a qualified insurance
(1) provides health care benefits to the employees,
including benefits for an injury sustained by an employee in the
course and scope of the employee's employment; and
(2) qualifies as provision of medical benefits for
purposes of workers' compensation insurance coverage as described
by Subtitle A.
(b) Before an employer may use a qualified insurance policy
for employee health care benefits under this chapter, the employer
must submit the policy to the department for approval in the manner
prescribed by the commissioner, accompanied by any filing fee set
by the commissioner by rule.
(c) The commissioner by rule shall adopt guidelines for the
approval of policies submitted to the department under this
section. The guidelines must require that the policy include
limits and coverages for health care services, including
hospitalization, that are at least equivalent to the limits and
coverages applicable to the medical benefits provided to an
employee covered under Subtitle A.
(d) The commissioner shall review a policy submitted under
Subsection (b) not later than the 30th day after the date the policy
is submitted to the department. If the commissioner disapproves a
policy, the department shall notify the employer who submitted the
policy not later than the fifth day after the date on which the
policy is disapproved.
(e) If the commissioner approves the policy, the department
shall notify the employer not later than the 10th day after the date
of the final approval. The employer may begin using the policy for
benefits under this chapter as of the date of the final approval.
Sec. 551.053. COVERAGE FOR INCOME BENEFITS; APPROVAL. (a)
If a qualified insurance policy is approved under Section 551.051,
the employer may obtain an insurance policy from any insurer
authorized to engage in the business of workers' compensation
insurance in this state to provide coverage for each employee of the
employer, or the legal beneficiary of a deceased employee, against
a loss caused by:
(1) any loss of wages incurred as a result of an
accident, illness, or disease, regardless of whether the accident,
illness, or disease is caused by or directly related to the
employee's employment; or
(2) the death of the employee.
(b) The employer must submit the indemnity policy to the
department for approval in the manner prescribed for approval of a
policy under Section 551.052.
(c) The commissioner by rule shall adopt guidelines for the
approval of a policy submitted to the department under this
section. The guidelines must require that the policy provide
(1) income benefits in the manner provided by Chapter
(2) death and burial benefits in the manner provided
by Chapter 408E.
Sec. 551.054. RULEMAKING. The commissioner shall adopt
rules as necessary to implement the duties of the department under
Sec. 551.055. REPORT TO LEGISLATURE. Not later than
December 1 of each year, the commissioner shall submit a report to
the governor, the lieutenant governor, the speaker of the house of
representatives, and the members of the legislature regarding the
status and results of the program.
[Sections 551.056-551.100 reserved for expansion]
SUBCHAPTER C. OPERATION OF PROGRAM
Sec. 551.101. EMPLOYER AUTHORIZATION TO OFFER ALTERNATIVE
BENEFIT PLAN. (a) Notwithstanding Subtitle A, a subscribing
employer who elects to participate in the program may offer an
alternative benefit plan to provide benefits to an employee who
sustains an injury in the course and scope of the employee's
employment. An employer may not offer an alternative benefit plan
other than through the program as provided by this chapter.
(b) An employer may offer an alternative benefit plan under
this chapter only through:
(1) health insurance coverage provided through a
qualified insurance policy; and
(2) indemnity coverage provided through a policy
approved by the commissioner.
Sec. 551.102. ELIGIBILITY TO PARTICIPATE IN PROGRAM. An
employer is only eligible to participate in the program if the
employer elected to obtain workers' compensation insurance
coverage under Subtitle A on or before January 1, 2005. An employer
who did not elect to obtain workers' compensation insurance
coverage under Subtitle A on or before January 1, 2005 may not
participate in the program.
[Sections 551.104-551.150 reserved for expansion]
SUBCHAPTER D. PROVISION OF ALTERNATIVE BENEFIT PLAN
THROUGH QUALIFIED INSURANCE POLICY AND ENDORSEMENTS
Sec. 551.151. RESPONSIBILITIES OF EMPLOYER. (a) An
employer who elects to participate in the program shall:
(1) pay any coinsurance or deductible otherwise
imposed on the insured employee for any compensable work-related
(2) continue the payment of wages to an insured
employee until that employee begins to receive income benefits
through the indemnity insurance policy under Section 551.052.
(b) If an employee receives benefits under an alternative
benefit plan, the employer shall maintain a qualified insurance
policy and indemnity insurance policy for the benefit of that
employee until the benefits to which the employee is entitled have
been paid. A qualified insurance policy and indemnity insurance
policy required to be maintained under this subsection must provide
benefits adequate to pay all benefits to which the employee is
Sec. 551.152. SUBROGATION. (a) This section applies to an
action to recover damages for personal injuries or death sustained
by an employee in the course and scope of employment against:
(1) an employer who has obtained a qualified insurance
policy and indemnity insurance policy covering that employee; or
(2) a third party.
(b) A judgment against an employer shall be reduced to the
extent that the employee has been compensated or is entitled to be
compensated under the employer's qualified insurance policy or
indemnity insurance policy. A judgment reduced under this
subsection shall be reinstated to the extent that the qualified
insurance policy or indemnity insurance policy are canceled or
otherwise fail to fully compensate the employee or a legal
beneficiary of the employee to the extent provided by the policies.
(c) An insurance carrier that is liable for the payment of
benefits to the employee or a legal beneficiary of the employee is
subrogated to the rights of the employee or legal beneficiary
against a third party.
[Sections 551.153-551.200 reserved for expansion]
SUBCHAPTER E. EFFECT OF ALTERNATIVE BENEFIT PLAN
Sec. 551.201. APPLICATION OF SUBTITLE A. Subtitle A
applies to an employer who provides an alternative benefit plan in
the manner prescribed by this chapter.
Sec. 551.202. CONTRACT REQUIREMENTS. A person who
requires an employer, as a prerequisite to entering into a contract
with that employer, to present evidence of workers' compensation
insurance coverage shall accept instead of that evidence a
qualified insurance policy and indemnity insurance policy issued as
provided by this chapter from an employer who obtains and maintains
in effect a qualified insurance policy and indemnity insurance
SECTION 2A.002. (a) The commissioner of insurance shall
adopt rules as required by this article not later than January 1,
(b) Subchapter E, Chapter 551, Labor Code, as added by this
article, takes effect March 1, 2006, and applies only to an
alternative benefit plan entered into on or after that date.
SECTION 2A.003. Except as provided by Section 2A.002(b) of
this article, this article takes effect September 1, 2005.