Last time, we began discussing the differences between workers' compensation insurance and so-called non-subscription policies. As we mentioned, employers are able to set the terms according to which they will compensate injured employees, and it is important to work with experienced legal counsel when establishing and negotiating these terms.
Although non-subscription policies are not unique to Texas, ours is the only state in the country that has a generally elective system when it comes to participation in the workers' compensation system. Non-subscription policies have certain benefits for both employers and employees, but there are certain downsides that have to keep kept in mind as well.
For one thing, while the workers' compensation system is generally the sole remedy for an injured employee, non-subscription policies do not shield an employer from additional liability to the same degree. Employers who opt for non-subscription agreements should be sure they understand the available legal protections and carefully consider whether they should insure against additional liability.
For employers, it is important as well to ensure compliance with state and federal regulatory requirements. These include abiding by reporting requirements at both the state and federal level, as well as notification requirements, including the posting of a company's nonsubscriber status and written notification to new employees.
Another thing for employers to carefully consider when establishing a non-subscription agreement program is that they have the ability to put their cost savings into the provision of other benefits for workers, which can help achieve a safer workplace and additional cost savings. We'll speak about this in our next post, as well as the importance of working with an experienced business law attorney to reign in business liabilities.