Texas Must Fix Its Poor Workers' Compensation Law

The chart above shows the difference between the average payment for loss of a body part due to a work accident in both the United States and Texas. Note that reimbursement in Texas is significantly lower than in the United States as a whole. That is primarily because companies in Texas are not required to be a part of the state's workers' compensation system. This is a flaw in the law that needs to be rectified. All businesses should be required to be in the system.

I don't often agree with the Dallas Morning News (a traditionally conservative newspaper), but I do agree with their stand on the state workers' compensation system. Here is their most recent editorial on this issue:

So how much is a disabled arm worth? Depending on whether your company is in Texas’ workers' compensation system or has bailed out, the answer could be anywhere from $100,000-plus to zilch.

Workers, however, won’t discover this injustice until they’re in dire need of medical help. Joe Becker, an Abilene trucker who herniated several discs in his back in 2012, worked for a company that had opted out of the state-run system. His benefits ended after two years, much sooner than they would have had his employer remained in the state system. Left to fend for himself, he’s now on the edge of being homeless.

Becker is one of many paying a steep price because their employer jettisoned the state’s workers comp system, according to an extensive analysis by ProPublica and NPR. Their findings, published in The Dallas Morning News last week, should give pause to other states considering similar measures.

Until recently, Texas had been the only state that didn’t mandate that companies be in the workers compensation system. Now Oklahoma allows companies to opt out, and Tennessee and South Carolina are considering similar measures. Texas lawyer Bill Minick, who runs an injured-worker consultancy called PartnerSource, is leading a national effort, along with several major companies, to get opt-out laws passed in a dozen states within the next decade.

This opt-out initiative may seem good for companies, but it’s problematic for workers. When Texas lawmakers last tried to reform the workers comp system in 2005, this newspaper advocated that lawmakers require companies to participate in the workers comp system. Lawmakers made other fixes, but the opt-out provision remained.

The ProPublica and NPR study underscores our concerns. They found that injured workers received lower benefits, faced more restrictions and had little recourse for denied medical aid if their employer had abandoned the workers compensation system. In some instances, injured workers could lose coverage if they violated safety rules, failed to seek help with a task, showed up late to medical appointments or even consulted their personal doctor.

Minick says opt-out systems save companies 40 to 90 percent because there are lower costs per claim, injured employees return to work faster and fewer claims are disputed. Whether injured workers get the benefits they need remains in dispute, however.

As a state, Texas must do more to make sure injured workers receive the treatment they need. The state-run system is far from perfect, but having more companies leave the system doesn’t seem to be the solution. Helping injured workers get back on their feet is a social contract. Financial concerns are important, but so, too, is the health of injured workers.

Texas needs to fix the workers comp system, and lawmakers should reconsider mandating employer participation. And let Texas’ experience serve as a lesson to others states considering opt outs.

The system must be strong, but it must also be fair.