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.