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Workers’ Compensation
Purchaser: Employers
Program: Workers’ Compensation Insurance

Description: Workers’ compensation is a state-regulated insurance program that pays medical bills and replaces some lost wages for employees who are injured at work or who have work-related diseases or illnesses.

Many Texas employers carry workers’ compensation coverage. Texas employers may choose whether or not to maintain workers’ compensation insurance. Employers who have opted not to carry workers’ compensation may provide alternative protection to employees for on-the-job injuries, but are not required to do so.

Workers’ compensation benefits include:

  • cost of medical care to treat a work-related injury or illness;
  • income to replace a portion of wages lost because of a work-related injury or illness;
  • death benefits to replace a portion of lost income for eligible family members of workers killed on the job; and
  • burial benefits to pay some of the deceased worker’s funeral expenses.

In calendar 1998, the Texas Department of Insurance (TDI) reported that insurers paid about $1.2 billion in workers’ compensation losses. Of that amount, TDI estimates that 59 percent –more than $700 million–was for medical costs. Temporary disability payments are a part of the direct payments.

Texas Total
 
Amount spent:
 
  Calendar
Year
Direct
Losses
Paid
Percentge
Medical
Paid
Medical
Benefits
Paid
 
  1987 $2,029,878,657 43.11% $875,100,168
  1993 $1,662,083,080 58.70% $975,668,363
  1997 $1,090,999,272 59.76% $651,988,171
  1998 $1,185,185,789 59.13% $700,789,376

Note: These figures are from a Texas Department of Insurance Property and Casualty program report.

Average medical cost per Texas Workers’ Compensation Case: $781 in 1998

Sources: Texas Workers’ Compensation Commission and Texas Department of Insurance