This document discusses non-subscribers in workers' compensation insurance. Non-subscribers are employers who opt out of mandatory workers' compensation programs in some states like Texas. They must instead provide alternate injury benefits to employees. Some reasons employers choose this option are that it allows more control over benefits and providers while potentially being less expensive. Non-subscribers have reporting requirements to state agencies and face liability risks if employees sue, so many purchase alternative non-subscriber insurance policies.

1. www.mosmedicalrecordreview.com (800) 670 2809
Understanding the Concept of Non-subscribers in
Connection with Workers’ Compensation Insurance
In this article, we focus on employers who are
non-subscribers and why they opt out of the
workers’ compensation insurance program.

2. www.mosmedicalrecordreview.com (800) 670 2809
Providers of litigation support services including medical record review and medical case
chronology will agree that the workers’ compensation claim process can be complex and
long drawn out. Many employees are unaware of the ins and outs of this insurance, and
the rules related to it are updated or modified often; moreover, the benefits vary from
state to state. All this makes consultation with a workers’ compensation lawyer
immensely helpful.
In this article, we focus on employers who are non-subscribers and why they opt out of
the workers’ compensation insurance program.
Who Are Non-subscribers?
Most of the U.S. states require employers to carry workers’ compensation insurance. The
state of Texas, however, has made this optional. Employers who opt out are called non-
subscribers, and they must instead make alternate arrangements to provide injured
employees with medical benefits and financial compensation. Most of these employers
will be self-insured through non-subscriber insurance. Among the Texas businesses that
do not provide workers’ compensation insurance are Wal-Mart, Waffle House,
McDonald’s, The Home Depot, Lowe’s and Burger King among others.
With this type of insurance coverage becoming popular, more states have started to
consider opting for a similar model. Oklahoma is among the most recent states to pass
legislation and implement the option to move to an insurance coverage model that
allows for options other than the Workers’ Compensation system. South Carolina and
Tennessee have also introduced bills that could allow for such a structure.
Why Do Employers Opt out of Workers’ Compensation Programs?
 One reason is that it is generally less expensive in the long run. A non-subscriber
program is an insurance policy that will pay for indemnity and medical
treatments. The employer can customize or change the benefits on the basis of
the insured employee’s needs or requirements. The Workers’ Compensation policy
on the other hand, does not allow such customization and the benefits are
decided by State laws.
 As they are self-insured, they have more control over what benefits they will
give.
 It allows them to specify which doctors the injured workers can see. Such doctors
are usually sympathetic to the employer’s wish to minimize claims or deny
benefits.

3. www.mosmedicalrecordreview.com (800) 670 2809
Requirements for Non-subscribers
By law, non-subscribers are required to annually notify the DWC (Division of Workers’
Compensation) regarding their decision not to obtain workers’ compensation insurance
coverage by submitting the DWC Form-005, Employer Notice of No Coverage or
Termination of Coverage. Non-subscribers must also report each workplace injury,
occupational illness or fatality resulting in more than one day of lost time by filing DWC
Form-007, Employer’s Report of Non-covered Employee’s Occupational Injury or
Disease.
A non-subscriber must file the DWC Form-005:
 Between February 1 and April 30 each year
 Within 30 days of hiring its first employee; or
 Within 10 days of DWC’s request
Non-subscribers with five or more employees must report each fatality, occupational
disease, and on-the-job injury that results in more than one day of lost time to the DWC.
They must submit the DWC Form-007 to the DWC within the seventh day of the month
following the month in which:
 The death occurred
 The employee was absent from work for more than one day as a result of the on-
the-job injury; or
 The employer acquired knowledge of the occupational disease.
Grace Period Offered for Non-subscribers
The Texas Department of Insurance, DWC is offering a grace period for employers who
are non-subscribers to provide any late required reports to DWC without penalty.
 As a result, non-subscribers who have not reported their non-coverage status for
prior years to submit the DWX Form-005 without an administrative penalty during
the current February 1, 2017 through April 30, 2017 reporting period.
 It also allows these employers who have not previously reported their injuries,
illnesses, and fatalities for prior years to submit the DWC Form–007 without an
administrative penalty until April 30, 2017.
 The DWC Form-005 can be filed with DWC online, by fax, or by mail. The DWC
Form-007 may be filed by fax or by mail.
Texas law limits the employers’ liability for occupational injuries of employees if they
offer workers’ compensation coverage. Non-subscribers, however, are not given such
legal protections. Therefore non-subscriber employers could face the risk of high damage

4. www.mosmedicalrecordreview.com (800) 670 2809
awards including punitive damages and damages for pain and suffering of the employee.
Moreover, they may also have to pay defense-related legal expenses such as attorneys’
fees.
Responsible non-subscribers must implement a comprehensive program that provides
workplace injury benefits to their employees. They can choose from many insurance
programs available that offer medical benefits, wage replacement benefits, disability
benefits and death benefits. In addition to this, they must also give great consideration
to workplace safety.