HOUSTON BUSINESS REVIEW

THE CPA CORNER: TEXAS WORKERS’ COMPENSATION … WHAT IS IT?
By C. Kevin Moore

Kevin Moore is a Principal of C. Kevin Moore & Associates and has two decades of experience as a Certified Public Accountant. Each week he provides the information you need to grow and protect your business.

The Texas workers´ compensation system is the method by which covered workers are compensated for work-related injuries or illnesses. An employer´s insurance company, self-insurance group with a certificate of approval, or certified self-insurance plan pays benefits for work-related injuries, even if the injured worker´s negligence contributed to the accident. However, neither the insurance company nor the employer is liable for injuries that:

• are intentional or self-inflicted
• result from the employee´s horseplay or voluntary intoxication (either alcohol or drug-induced)
• arise from voluntary participation in off-duty recreational, social, or sports events
• result from "acts of God," unless a person´s job exposes him or her to a greater than ordinary risk of injury from such acts
• are inflicted by someone else for personal reasons unrelated to employment.

The Texas Workers´ Compensation Act limits a covered employer´s liability to a specific schedule of benefits based on the type and severity of the worker´s injury. Benefits include

• lifetime medical benefits for necessary treatment of compensable injuries and illnesses
• disability income benefits for a specified period of time and up to dollar limits set by law
• limited funeral expenses for workers killed on the job
• death benefits for surviving dependents of workers killed on the job.

Who belongs to the system?

Texas law does not require most private employers to carry workers´ compensation insurance. However, private employers that contract with governmental entities are required to provide workers´ compensation coverage for each employee working on the public project. In addition, some clients may require their contractors to have workers´ compensation insurance. The following employers are considered part of the state´s workers´ compensation system:

• Employers covered by workers´ compensation policies issued by insurance companies licensed to write this type of coverage in Texas.
• Employers certified by TWCC to self-insure their workers´ compensation claims.
• Employers that are part of a self-insurance group that has received a certificate of approval from TDI.

Employers without workers´ compensation face unlimited liability, including possible punitive damages, if they lose lawsuits arising from workplace accidents. They also lose certain common-law defenses if they are sued over on-the-job injuries. They may not defend themselves by arguing that:

• the injured worker´s negligence caused the injury
• the negligence of fellow employees caused the injury
• the injured worker knew of the danger and voluntarily accepted it.

Employee injury cases are more likely to become lawsuits if an employer does not carry workers´ compensation insurance. If an employer carries workers´ compensation, a case may go to court only after the administrative dispute process at TWCC has been exhausted. If the claim goes to court, TWCC´s recommendations must be presented, and evidence is limited to the issues in dispute. Resolved issues cannot be reintroduced. The employer´s insurance company is responsible for attorneys´ fees and other defense costs.

Be Aware… Be careful… and look at your insurance issues…