By: Walle H.B. No. 4118

A BILL TO BE ENTITLED

AN ACT

relating to requiring employers who choose not to purchase workers' compensation insurance coverage from an insurance carrier to provide certain employee benefits; providing an administrative violation; creating a criminal offense.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 406.001, Labor Code, is amended to read as follows:

Sec. 406.001. DEFINITION. In this subchapter,

(1) "employer" means a person who employs one or more employees.

(2) "qualified benefit plan" means a plan that meets the standards of section 406.002, subsection (b), Labor Code.

SECTION 2. Section 406.002(b), Labor Code, is amended and sections 406.002(1)(2)(3) and (4), and 406.002(c) are added to read as follows:

Sec. 406.002. EMPLOYER COVERAGE REQUIREMENT [COVERAGE GENERALLY ELECTIVE]. (a) An [Except for public employers and as otherwise provided by law, an] employer shall obtain workers' compensation insurance coverage from an insurance carrier or provide benefits through a qualified benefits plan or certified self-insurance coverage that meets the requirements of Chapter 407 or 407A

(b) A qualified benefit plan must meet the following requirements [An employer who elects to obtain coverage is subject to this subtitle.]:

(1) provide for payment of the same forms of benefits included in the Workers' Compensation Act for: temporary total disability, temporary partial disability, permanent partial disability, vocational rehabilitation, permanent total disability, disfigurement, amputation or permanent total loss of use of a scheduled member, death and medical benefits as a result of an occupational injury, on a no-fault basis, with the same statute of limitations, and with dollar, percentage, and duration limits that are at least equal to or greater than the dollar, percentage, and duration limits contained in Chapter 408, Labor Code. For this purpose, the standards for determination of average weekly wage, death beneficiaries, and disability under the Workers' Compensation Act shall apply;

(2) pay benefits regardless of whether the covered employee, the employer, or a third party caused the occupational injury; and

(3) provide the same forms and levels of benefits to all employees of the employer.

(4) The Workers' Compensation Act does not define, restrict, or apply in any other way to a qualified benefit plan.

(c) An employer providing a qualified benefit plan must notify the Insurance Commissioner in writing of the election to provide a qualified benefit plan and the date that the election is to become effective;

(1) Shall pay to the Commissioner an annual nonrefundable fee of 500.00 dollars on the date of filing written notice and every year thereafter;

(2) Provide to the Commissioner and to all covered employees notice of the name, title, address, and telephone number for the person to contact for injury benefit claims administration.

SECTION 3. Section 406.003, Labor Code, is amended to read as follows:

Sec. 406.003. WORKERS' COMPENSATION INSURANCE [METHODS OF OBTAINING] COVERAGE. An employer who obtains [may obtain] workers' compensation insurance coverage through a licensed insurance company, provides benefits [or] through self-insurance under Chapter 407 or 407A, or provides benefits through a qualified benefit plan is considered to provide workers' compensation coverage for purposes of [as provided by] this subtitle.

SECTION 4. Sections 406.005(c) and (d), Labor Code, are amended to read as follows:

(c) Each employer shall post a notice that [of whether] the employer has workers' compensation insurance coverage and whether the coverage is provided through an insurance carrier, through self-insurance, or a qualified benefit plan at conspicuous locations at the employer's place of business as necessary to provide reasonable notice to the employees. The commissioner may adopt rules relating to the form and content of the notice. The employer shall revise the notice when the information contained in the notice is changed.

(d) An employer [who obtains workers' compensation insurance coverage or] whose workers' compensation insurance coverage is changed [terminated or canceled] shall notify each employee that the coverage has been changed [obtained, terminated, or canceled] not later than the 15th day after the date on which the change [coverage, or the termination or cancellation of the coverage,] takes effect.

SECTION 5. The heading to Section 406.007, Labor Code, is amended to read as follows:

Sec. 406.007. CHANGE [TERMINATION] OF COVERAGE BY EMPLOYER; NOTICE.

SECTION 6. Section 406.007(a), Labor Code, is amended to read as follows:

(a) An employer who changes [terminates] workers' compensation insurance coverage [obtained] under this subtitle shall file a written notice with the division by certified mail not later than the 10th day after the date on which the employer notified the insurance carrier or decided to make a change under a self-insurance plan or qualified benefit plan, as applicable [to terminate the coverage]. The notice must include a statement certifying the date that notice was provided or will be provided to affected employees under Section 406.005 and specify the manner in which coverage will be provided to employees after the change.

SECTION 7. Section 406.034(b), Labor Code, is amended to read as follows:

(b) An employee who desires to retain the common-law right of action to recover damages for personal injuries or death shall notify the employer in writing that the employee waives coverage under this subtitle and retains all rights of action under common law. The employee must notify the employer not later than the fifth day after the date on which the employee[:

[(1)] begins the employment[; or

[(2) receives written notice from the employer that the employer has obtained workers' compensation insurance coverage if the employer is not a covered employer at the time of the employment but later obtains the coverage].

SECTION 8. Section 406.094(a), Labor Code, is amended to read as follows:

(a) An employer [who elects to provide workers' compensation insurance coverage] may include in the employer's workers' compensation insurance coverage a real estate salesperson or broker who is:

(1) licensed under Chapter 1101, Occupations Code; and

(2) compensated solely by commissions.

SECTION 9. Section 406.097(a), Labor Code, is amended to read as follows:

(a) A sole proprietor, partner, or corporate executive officer of a business entity [that elects to provide workers' compensation insurance coverage] is entitled to benefits under the business entity's workers' compensation insurance [that] coverage as an employee [unless the sole proprietor, partner, or corporate executive officer is specifically excluded from coverage through an endorsement to the insurance policy or certificate of authority to self-insure].

SECTION 10. Section 407.045(a), Labor Code, is amended to read as follows:

(a) A certified self-insurer may withdraw from self-insurance by notifying [at any time with the approval of] the commissioner that the certified self-insurer chooses to provide workers' compensation insurance coverage through an insurance carrier or qualified benefit plan. The commissioner shall approve the withdrawal if the certified self-insurer shows to the satisfaction of the commissioner that the certified self-insurer has obtained a workers' compensation insurance coverage policy through a licensed insurance company or qualified benefit plan [established an adequate program to pay all incurred losses, including unreported losses, that arise out of accidents or occupational diseases first distinctly manifested during the period of operation as a certified self-insurer].

SECTION 11. Subchapter A, Chapter 415, Labor Code, is amended by adding Section 415.0015 to read as follows:

Sec. 415.0015. ADMINISTRATIVE VIOLATION BY EMPLOYER. (a) An employer commits a violation if the employer does not maintain workers' compensation insurance coverage in a manner that complies with Chapter 406.

(b) An employer who has committed an act described by Subsection (a) that results in a denial of benefits to an employee who sustains a compensable injury is liable for payment to the employee of all benefits to which the employee would otherwise be entitled.

(c) A violation under this section is a Class A administrative violation.

SECTION 12. Chapter 418, Labor Code, is amended by adding Section 418.004 to read as follows:

Sec. 418.004. PENALTY FOR NOT CARRYING REQUIRED WORKERS' COMPENSATION INSURANCE COVERAGE. (a) An employer commits an offense if the employer does not maintain workers' compensation insurance coverage in a manner that complies with Chapter 406.

(b) An offense under Subsection (a) is a Class A misdemeanor.

SECTION 13. Sections 406.004, 406.005(a) and (b), 406.007(c) and (d), 406.052(b), and 411.002(b) Labor Code, are repealed.

SECTION 14. The commissioner of workers' compensation shall adopt any rules necessary to implement this Act not later than December 1, 2015.

SECTION 15. An employer subject to this Act is required to comply with this Act not later than January 1, 2016.

SECTION 16. The change in law made by this Act applies only to a claim for workers' compensation benefits based on a compensable injury that occurs on or after January 1, 2016. A claim based on a compensable injury that occurs before January 1, 2016, is governed by the law in effect immediately before the effective date of this Act, and the former law is continued in effect for that purpose.

SECTION 17. This Act takes effect September 1, 2015.