Nonsubscription – Texas

Simply stated, Workers Compensation is an Occupational Injury Benefit Program with the benefits determined by the state.

Nonsubscription is an Occupational Injury Benefit Program with the benefits determined by the Employer.

23% of all Texas employers—Companies like WalMart and Home Depot, Baylor and Hermann Hospitals, Neiman Marcus and Macy’s, Sonic and McDonald’s, as well as your local garage, the nearest manufacturing or machine shop, and the B-B-Q restaurant just down the street, over 114,000 employers in total—chose an option other than WC.

We have found the three main reasons being:

• Pricing is generally 15-40% less than WC, even for credit mod accounts.
• Adoption of advanced risk management techniques and claims control generally unavailable within the WC system.
• WC experience mods drop off after 3 years. Debit mod accounts love this feature.

Nonsubscription, even “The CPRO Texas Option”, is not a substitute for WC. “The CPRO Texas Option” is an Occupational Injury Benefit Program that provides options not generally available within the WC system, such as:

• WC provides disability benefits of up to 70% (75% for employees making less than $8.50/hour) of the average weekly wage. “The CPRO Texas Option” allows the employer to choose benefit levels from 70% to 90%.
• The current maximum weekly disability limit under WC is $1,006. For higher wage industries, “The CPRO Texas Option” provides weekly benefits up to $2,000. Lower wage industries only pay for what they need, as low as $600 per week.
• WC provides up to 401 weeks of disability benefits for total disability. “The CPRO Texas Option” provides the employer choices of 2, 3, or 5 year benefit periods.
• Legal liability claims under WC must be filed in the courts. “The CPRO Texas Option” provides mandatory arbitration. Under WC, legal liability requires a death and gross negligence. For employers not purchasing WC, to have legal liability, an employer’s negligence must be the proximate cause of the injury.

The older generation of nonsubscriber policies uses the industry standard of a CSL (Combined Single Limit) policy form in which all the benefits (Medical, Disability, AD&D, and Employer Liability) are paid from one single limit.

The CPRO Premier Policy provides separate limits for each benefit.

• No Dollar Limit Medical. All eligible medical expenses incurred within the benefit period are covered.
• Disability benefits for the entire benefit period.
• AD&D benefit that is not reduced by payments for Medical or Disability benefits
• Employer Liability coverage for the full amount selected by the insured and not reduced by payments made for the other benefits

Every employee has their own limit and every employer the protection of an individualized limit. If an employer purchases the CPRO Premier Policy with a $2,000,000 limit, and has an occurrence with 20 employees involved, the employer will have up to $40,000,000 of legal liability protection (20 x $2,000,000) plus No Dollar Limit Medical for each and every employee, plus disability benefits for each employee, plus AD&D benefits for each employee. Does anyone else offer you such benefits? In fact, we offer legal liability per employee with limits of $1M, $2M or $5M.

• We offer benefit periods of up to 260 weeks. We also offer 106 and 156 weeks.
• We offer 1st dollar defense on every account with a SIR of $25,000 or less.

We can provide a Comprehensive Policy Comparison with other nonsubscriber carriers. Email one of our Marketing Contacts and it will be sent to you immediately.

NO Dollar Limit Medical means exactly what it says. It is not all “smoke and mirrors” like our competitors say it is. No Dollar Limit Medical means that all eligible medical expenses incurred during the benefit period selected by the employer will be paid.

The real surprise is that we are the only one to offer this benefit to nonsubscriber employers.

Simply, they can’t. Every non-sub carrier, other than CPRO, adheres to a decades old business model from the horse and buggy era of nonsubscription. In 1988, the entire industry adopted a CSL policy form where all the benefits (Medical, Disability, AD&D and Employer Liability) draw from one limit: a true Combined Single Limit (CSL). It is impossible for any carrier to offer No Dollar Limit Medical with a fixed CSL limit of any amount.

If your employer purchases a $1,000,000 limit policy from any nonsubscriber carrier other than CPRO, and has a covered $200,000 medical loss, there is only $800,000 left for Disability, AD&D and Employer Liability. If that same claim has $100,000 of Disability, only $700,000 is left for AD&D and Employer Liability. Imagine what would happen if that same claim had $1,000,000 in medical. In the CPRO Premier policy every section has its own specified limit.

Buy our Premier Policy form with a policy limit of $1,000,000 and you get $1,000,000 of Employer Liability coverage PER EMPLOYEE, plus NO Dollar Limit Medical, plus separate disability benefits plus AD&D. If you have a covered $2,000,000 medical claim within the Benefit Period, we would pay all the medical and still have a full $1,000,000 per employee of Employer Liability remaining to protect your employer.

An ERISA Plan is an employee benefit plan that covers occupational injuries. This occupational injury benefit plan complies with ERISA, a Federal law that governs all employee welfare benefit plans.

The ERISA Plan describes all the benefits that are available to an employee who experiences an occupational injury. In addition to describing the available benefits, the ERISA Plan describes the requirements for an injured employee to access the benefits as well as the employer’s responsibility for administration of the ERISA Plan. Finally, the ERISA Plan describes the procedures to resolve any disputes over benefits or the administration of those benefits.

Although an ERISA Plan is not required for an employer to be a nonsubscriber, insurance carriers REQUIRE an ERISA Plan in order to issue a policy.

No. If the purchasing Employer has an ERISA Plan in place, their Plan could be approved and there would be no need to go through the time and expense of rolling out a new Plan. All the Employer would need to do is send us a copy of their current Plan and confirm that the plan has been rolled out to their employees.

However, if the Employer wishes to offer the No Dollar Limit Medical Benefit that our Policy provides, they may choose to roll out a new Plan, or amend their current Plan. We can easily do an amendment for their current Plan. Since this is an increase in benefits the Employer can advise their employees of this increase in benefits in any manner that is most advantageous to him (even email). There is no need for employee acknowledgement.

The lone exception is truckers or programs without mandatory arbitration. In those particular cases only, we will require a rollout of our Plan.

Yes, our quotes are all inclusive.

Yes. The CPRO Texas Option Program includes a mandatory binding arbitration agreement that is rolled out to the employees along with the ERISA Plan.

If a current nonsubscribing employer chooses to purchase the CPRO Texas Option policy and keep their existing ERISA Plan, they must have an arbitration agreement too.

Our goal is to offer our product at a price competitive with the older generation nonsubscriber policies everywhere else in the marketplace. This is generally 15-40% less than WC. It’s quite easy using the most modern risk management and claims handling techniques. Our secret weapon is our TPA, Method. Through Method, we have been able to bring the expertise and most favorable outcomes to smaller and mid-sized nonsubscribers.

On SIRs of $50,000 or less, Yes. With SIRs above $50,000 we will consider other approved TPAs or self-administration on a case-by-case basis. Even with the larger SIRs, Method should be given top consideration.

There was no need to innovate here. Like everyone else, we accept full payment, monthly payroll reporting or premium finance. For our 10% down and 10 equal installment plan, we have adopted the Berkshire Hathaway EFT billing system. The EFT is drafted on the same day of the month as the original effective date. An email notifying the Insured of the date and amount is sent three days prior to the draft.

EFT allows us to know more quickly if a payment is not being made, thus reducing unearned premium that may need to be collected after cancellation. Additionally, for an Insured not wishing to utilize an EFT draft, we have a direct bill payment plan of 25% down and 9 equal payments.

When we receive a complete application along with currently valued loss history our experienced staff of underwriters can provide a quote in 24 hours or less. On certain larger accounts, or those with specified severe claims, quotes may take up to 3 days.