Overall, the total number of nonsubscribing employers of all sizes dropped from 37 percent to 33 percent in the past two years, even as the total number of workers covered by nonsubscribing plans increased from 23 percent to 25 percent in the same period. Clearly, bigger employers have a different perspective than smaller companies.

The vast majority of employees of large and medium nonsubscriber companies - 86 percent and 90 percent, respectively - are covered by occupational benefit plans. Similar percentages pay occupational benefits, including 83 percent of large employers and 89 percent of medium employers.

The primary reasons employers said they participate in the state's worker's compensation system included:

• The perception that workers' comp insurance is required by law (25 percent)

• Availability of health care networks (24 percent)

• Concern over lawsuits (14 percent - a 6 percent decline from 2006)
   

Nonsubscribers More Satisfied Overall

Overall, satisfaction levels were higher for non-subscribing employers (69 percent) than subscribing employers (61 percent). Employers said the key differentiators were the ability to manage medical and wage replacement costs better and a perceived higher value for the company in nonparticipating plans.

Significantly, nonsubscribing employers with more than 100 employees report an overall satisfaction rate of 84 percent, considerably higher than the 59 percent reported by subscribing companies. Regarding adequacy of benefits paid to their employees, 62 percent of nonsubscribers said they are satisfied, compared to 53 percent of subscribers.

The largest differences in satisfaction appeared when employers were asked whether a workers' compensation or nonsubscriber benefit plan was a good value for the company, and whether the employer was satisfied with its ability to manage medical and wage replacement costs.

Nonsubscribers by Industry Type

The percentages of nonsubscribing employers by industry types include:

46% Arts/Entertainment/Accommodation/Food Services
39% Healthcare/Educational Services
33% Finance/Real Estate/Professional Services
31% Manufacturing
29% Wholesale Trade/Retail Trade/Transportation
28% Mining/Utilities/Construction
27% Agriculture/Forestry/Fishing/Hunting

Private sector employers in Texas have been allowed the option to purchase workers' compensation insurance (WC) since 1913. In 1993 the state conducted its first study to estimate the percentage of nonsubscribing employers and conducted follow-up studies in 1995, 1996, 2001, 2004, 2006 and this year.

Survey results will be forwarded to the Texas legislature. You may view the complete survey results at http://www.tdi.state.tx.us/reports/wcreg/documents/2008_Employer_Partic.ppt

The Combined Group has been serving nonsubscribing Texas employers since 1989. We have underwritten $2.3 billion workers' compensation equivalent in premiums and provided claims adjusting for more than 44,000 nonsubscription claims. The Combined Group is your nonsubscription specialist. Experienced. Skilled. Reliable. For more information about our full range of services, please visit www.combinedgroup.com.