Texas Workers’ Compensation Update: 2015 and the Year Ahead

By Stuart D. Colburn, Esq., and Albert Betts, Jr., Esq., Co-Authors, Texas Workers’ Compensation Law

This year marks an anniversary that will not be celebrated with a parade or even a mention on the local news. But it is significant to those who are a part of the Texas workers’ compensation system. Ten years ago the Texas workers’ compensation system was, to put it mildly, in a state of turmoil. Faced with yet another “crisis” in the system, stakeholders, legislators, and other state leaders demanded change. The former Texas Workers’ Compensation Commission (now the Texas Department of Insurance - Division of Workers’ Compensation) was besieged on all fronts. A series of massive reforms and regulatory reorganizations soon followed and a reborn and reinvigorated Texas system emerged. This is not to wax nostalgic about the “wonder years” since 2005, but it does help to put into perspective some of the issues and controversies that exist today.

Legislative Issues

The Texas legislature met earlier this year. The general consensus was the system overall was performing as expected but there would likely be some legislative discussion of benefits and claims reporting information provided by nonsubscriber employers. Prior to the session, there were legislative hearings on the number of Texas workers who did not have workers’ compensation coverage and questions about benefits provided by nonsubscribers, as well as their compliance with the limited statutory reporting requirements. The House Business and Industry Committee, which oversees the Texas workers’ compensation system and the Division of Workers’ Compensation, was charged with studying the voluntary nature of workers’ compensation in Texas and how it meets the needs of employers and employees. According to the committee, Texas has about 470,000 workers who do not have any coverage—their employers do not carry workers’ compensation insurance, nor offer a benefit plan. Despite these pre-session discussions, the 2015 legislative session did not result in any legislative changes for Texas’ non-mandatory system. Nonetheless, there will likely continue to be legislative scrutiny of the nonsubscriber market.

Regulatory Compliance

For the workers’ compensation subscribers, the Division reported that audits of workers’ compensation insurers revealed problems with the accuracy of benefit payments, particularly lifetime income benefits and death benefits. Workers’ Compensation Commissioner Ryan Brannan has indicated that accuracy of benefit payments is a priority for the Division. Carriers and their claims administrators should pay close attention to this compliance issue.

Electronic reporting requirements and the many resulting compliance actions continue to be an area of concern for carriers. This is because many in the carrier community have viewed the Division’s compliance efforts as imposing excessive administrative penalties for unintentional data errors or lack of clarity in data submission requirements.

System Concerns

Injured workers and some in the plaintiffs’ bar continued to voice concern over the balance in the system and the lack of recourse in the Texas courts to address perceived unfair acts of workers’ compensation insurers. This discontent is a result of the 2012 Texas Supreme Court decision in Texas Mutual v. Ruttiger, 381 S.W.3d 430 (Tex. 2012), which essentially eliminated lawsuits alleging bad faith in claims handling by insurers. Outside of the reforms initiated in 2005, this case has had a very significant impact on the Texas workers’ compensation system. Many of the decisions included in our case law update reflect the doctrine announced in Ruttiger requiring claimants to resolve any claims-related grievances through the Division’s administrative system.

During the last year there has also been some discussion of increasing the maximum reimbursable amount per hour for attorneys and paralegals, and increasing the number of hours that can be billed for certain activities. These fees have not changed since the 1990s. Stakeholders could not reach an agreement on the proposed rules and for now the issue remains unresolved. With the elimination of civil actions for bad faith, an increase in the maximum attorney fee would be appreciated by many workers’ compensation attorneys.

Legal Issues

Texas adjusters and attorneys paid close attention to court decisions involving questions about what travel situations are considered to be within “course and scope” of employment. What travel constitutes acting within the course and scope of employment confused many practitioners. This is largely because each of the cases involving this often complex issue is very fact specific. Recently, the Texas Supreme Court in Seabright Ins. Co. v. Lopez, 427 S.W.3d 442 (Tex. App.—San Antonio 2014), held that an employee who was killed while driving to a remote work site was in course and scope of his employment. The court found the deceased employee’s travel to and from the remote location was analogous to employees such as deliverers or messengers. The employer paid him per diem for food and housing, and required him to find temporary housing in that area. The company also provided him with a company vehicle, requiring him to travel from the temporary housing to the job site. The nature of the employer’s business model and the job requirements placing employees on longterm assignments far from their homes were among the factors supporting the court’s holding that the travel was within course and scope of employment.

In another case, Pena v. SORM, 2014 Tex. App. LEXIS 10150 (Tex. App.—Corpus Christi September 11, 2014, pet. denied), an employee was traveling to attend a seminar and was killed in an auto accident. He had turned to go to lunch as he headed toward the seminar when the accident occurred. The appellate court found that there was enough evidence regarding the employee’s travel that could be considered within the “dual purpose” doctrine to at least raise a fact question that the trial court should have considered.

The 2016 edition of Texas Workers’ Compensation Handbook provides updates on these issues and others but overall reflects a Texas system that has stabilized and has shown vast improvement in the last ten years.

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