When it comes to workers’ compensation, Texas is unique in several ways. The following is a basic primer for people outside of Texas who may be involved in a Texas workers’ compensation claim.
Texas has four types of work comp benefits. They are:
1. Income benefits – replaces a portion of the wages an employee loses because of a work-related injury or illness
2. Medical benefits – pays for the necessary medical care due to a work-related injury or illness
3. Burial benefits – pays some of the cost of employee’s funeral to the person who paid the funeral expenses
4. Death benefits – replaces a portion of lost family income for family members of employees who die as a result of a work-related injury or illness
The average weekly wage (AWW) in Texas is calculated based on the 13 weeks prior to the date of injury for full time workers (30 hours or more per week). If the employer does not continue to pay for health insurance while the employee is off work due to a work comp injury or illness, the cost of health insurance is also added to the wages. If the employee has multiple jobs, the income reportable for federal tax purposes at the second job is added to calculations to determine the AWW. (School district employees have their own separate calculation system for AWW, which is not included here.) The Division of Workers’ Compensation establishes each year a cap or maximum amount that can be paid per week. The minimum amount that can be paid for an AWW is 15% of the maximum amount.
While Texas has Income Benefits, the indemnity benefits do not use the same names as income benefits in other states. The Income Benefits in Texas are designated as follows:
1. Temporary Income Benefits (TIBs) – TIBs are calculated by multiplying the AWW by 70 percent. The maximum TIBs that can currently be paid is $539.00 per week, but it changes each year. The employee is paid TIBs if the employee is off work for more than 7 days due to a work-related injury or illness. Benefits start on the eighth day off work. If the employee is off work more than 14 days, TIBs are retroactive back to the first day missed from work. TIBs end on the date the employee is physically able to earn the same wages he was earning before the injury, OR, on the date the medical provider determines the employee has reached maximum medical improvement (MMI), OR, at the end of 104 weeks (which makes Texas among just a few jurisdictions which place a two year time limit on temporary benefits).
2. Impairment Income Benefits (IIBs – pronounced “ibs”) – IIBs are paid when the employee suffers a permanent impairment from a work-related injury or illness. IIBs start the day after an employee has reached MMI. If the employee has not reached MMI before 104 weeks after the date of work-related injury or illness begin, the Texas law states the employee is declared at MMI and can start receiving IIBs for his injury. A doctor certified by the Texas Division of Workers’ Compensation is required to examine the employee and access an impairment rating to the body as a whole. For each one percent of disability, the employee is paid 3 weeks of benefits at 70 percent of his average weekly wage, not to exceed $377.00 per week. For example, if the employee is given a ten percent impairment rating, the employee will receive 30 weeks of IIBs (10 x 3 weeks for each one percent).
3. Supplemental Income Benefits (SIBs) – SIBs have to be approved by the Division of Workers’ Compensation for the first quarter year (3 months) they are paid. SIBS are income benefits paid monthly to employees who meet the entitlement requirements of:
· has an impairment rating of 15% or higher,
· has not returned to work because of the impairment, or has returned to work at a reduced wage and is earning less than 80% of the AWW at the time of the injury,
· has made a good faith effort to find job that can matches his ability to work, and
· did not take his IIBs in a lump sum payment.
SIBs have their own unique way of being calculated. The employee is paid 80% of the difference between 80% of the AWW (earned prior to the injury) and the AWW earned after the work related injury. [Why they don’t just say 64% of the difference between your old wage and what you make now, I don’t know]. Each month the employee will receive one check for 4.34821 weeks of the SIBs. The employee has to apply for SIBs every three months and provide proof that he has:
· has looked for work each week of the prior three months,
· has current medical documentation that his work-related injury or illness keeps him from working at the level he was prior to the injury, and
· has provided full cooperation with the Texas Department of Assistive & Rehabilitative Services, or a private provider of vocational assistance.
After the first three months, the SIBs application is sent each quarter to the insurer or self-insured by the employee, confirming to the insurer or self-insured that the employee has looked for work, is unable to work or has not found work that matches his disabilities, and is pursuing vocational rehabilitation. The SIBs can continue for 401weeks.
4. Lifetime Income Benefits (LIBs) – There are some specific work-related injuries that entitle an employee to LIBs. They are:
· Loss of both feet at or above the ankle
· Loss of both hands at or above the wrist
· Loss of one foot at or above the ankle and loss of one hand at or above the wrist
· Total and permanent loss of sight in both eyes
· A spinal injury that results in permanent and complete paralysis of both arms, or both legs, or one arm and one leg
· A traumatic brain injury that results in incurable insanity or imbecility
· Third degree burns over at least 40% of the body that require skin grafting
· Third degree burns covering the majority of both hands or one hand and the face.
LIBs are paid at 75% of the AWW but cannot exceed the TIBs rate, currently $539.00 per week. LIBs begin when the medical provider certifies to the Division of Workers’ Compensation that one of these eight conditions have been meet and will continue until the end of the employee’s life.
Medical Benefits in Texas are the same as in other jurisdictions. The necessary cost of medical care is paid by the insurer or self-insured to the medical provider. It covers only the work-related injury or illness and does not pay for any non-work related medical care, even if it provided at the same time as the medical care for the injury.
The employee selects the choice of doctors in Texas if the employer is not a member of a certified workers’ compensation health care network. If the employer is a member of a certified network, the employee must obtain his medical care through medical providers within the network, if the employee lives in the area covered by the certified network. If the employee is not employed by an employer who has joined a certified network, the employee selects his own physician but it cannot be a physician who has not been admitted to, or who has been removed from, the Division of Workers’ Compensation Approved Doctor list. Once an employee has selected a medical provider, either in a network or approved by the Division, the employee cannot change medical provider without approval from the Division of Workers’ Compensation.
Death Benefits are paid to the surviving spouse, minor children, dependent grandchildren or other dependents of the deceased employee. If there are no dependents of a deceased employee, the death benefits are paid to the deceased non-dependent parents or siblings. The death benefit is 75% of the deceased employee’s average weekly wage, but cannot exceed the state weekly wage maximum.
The death benefits start the day after the employee dies. A surviving spouse will receive death benefits for the remainder of the spouse’s life unless the spouse remarries. If the deceased employee has both a surviving spouse and dependent children, the surviving spouse gets one-half of the death benefit and the second half of the death benefit is divided among the dependent children. Children remain eligible for the death benefit until they are 18 years old, or until age 25 if they are enrolled full time at an accredited educational institution. Children with physical or mental disabilities remain eligible for death benefits until they die or no longer have the disability.
Other family members who are dependent upon the deceased employee such as siblings, parents and grandparents can collect death benefits if there are no eligible spouse, children or grandchildren. These family members can collect death benefits for 364 weeks. If there are no dependents of the deceased employee, the non-dependent parents of the employee can collect death benefits for 104 weeks. If there are no eligible beneficiaries for death benefits, or if the eligibility of the beneficiaries ends in less than 364 weeks, the remaining death benefits are paid to the Subsequent Injury Fund.
While Texas workers compensation has it oddities, it can be understood by the non-Texan with a little effort.
Author R. Shafer, executive vice president, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers’ Compensation costs, including airlines, healthcare, manufacturing, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. She can be contacted at: RShafer@ReduceYourWorkersComp.com or 860-553-6604.
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers’ compensation issues.
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