The Texas workers' compensation system is a state-regulated insurance program that:
- Provides income benefits to replace some lost wages for workers with compensable injuries or illnesses,
- Pays medical benefits for treatments related to the worker's compensable injury or illness, and
- Provides some legal protection ("exclusive remedy") for employers.
Texas is the only state that allows most employers a choice in whether they provide workers' compensation. Businesses that choose to provide workers' compensation are called "subscribers," and businesses that opt out of the system are called "nonsubscribers."
Some businesses, such as public employers and employers that enter into a construction-related contract with a governmental entity, must provide workers' compensation.
Legal protection for employers
If an employer purchases a workers' compensation policy from a licensed carrier, their injured workers cannot sue them for pain and suffering damages resulting from workplace injuries. Nonsubscribers bear complete financial responsibility for an employee's injury or death if they are found negligent.
Medical, income benefits for injured workers
When employees suffer compensable injuries, a workers' comp policy will:
- Pay all reasonably required medical bills for a work-related injury.
- Replace some lost wages, and compensate the injured employee for permanent impairment caused by a compensable work-related injury.
- Pay benefits based on the employee's pre-injury income and the severity of the injury.
- Reimburse qualifying beneficiaries for a deceased worker's actual burial costs (up to $6,000), and pay income benefits to qualifying beneficiaries.
For more information about workers' compensation, visit the Texas Department of Insurance at tdi.texas.gov/wc/indexwc.html.