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A report entitled, Legislators Guide to the Issues 2005-2006 was issued today by the Texas Public Policy Foundation (“TPPF”) during its 3rd Annual Policy Orientation for the Texas Legislature. The TPPF used the positive experiences realized by nonsubscribing businesses to make recommendations concerning the Texas Workers’ Compensation System.

In its report, TPPF states “The Texas Workers’ Compensation System is widely considered one of the worst in the nation despite aggressive reforms introduced by the state Legislature over the past several decades. Employers participating in the state system pay the third highest insurance rates in the nation, and employees who are treated by the system experience the second lowest recovery rates in the nation. Texas’ system was given a D minus by the Work Loss Institute: only five states earned a lower rating. The state system works better for some than for others. For a small group of employers who secure approval from the system to develop self-insured programs, costs are lower and health outcomes of injured employees are better. But costs are even lower and health outcomes are even better for employers who decline to participate in the state system and purchase workers’ compensation programs that are not state-approved.

Because Texas allows employers to elect not to participate in the state workers’ compensation system - it is the only state in the nation to do so - Texans have the unique opportunity of comparing the state system with programs established by the private sector. The private sector beats the state system hands over fists for efficiency, effectiveness, and satisfaction of employees and employers. To ensure employers can obtain workers’ compensation programs at lower costs and employees recover rapidly and fully from workplace injuries, the state system of workers’ compensation should be dismantled. Eliminating state regulation of workers’ compensation will reduce the competitive dis­advantage that Texas businesses now face with businesses in other states - a disadvan­tage that presently diminishes profitability, wage growth, and state economic growth.

Most of the reasons for establishing a state system of workers’ compensation no longer exist. Medical protocols have been established by the American Medical Association, and state boards certify health care providers. The federal Occupational Health and Safety Administration sets, monitors, and enforces standards for workplace safety. In fact, there is no demonstrable need for state regulation, given current eco­nomic incentives that businesses face to keep employees productive and to avoid lia­bility. Businesses and employees would be better served by government activities that focus on consumer protections for occupational insurance and benefits.”

For More on the Texas Public Policy Foundation Please Click Here

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