DWC refers to the Texas Department of Workers Compensation. The forms 5 and 7 relate to specific state forms that apply to employers that are considered to be non-subscribers to the State Workers' Compensation system and must be filed as such with the DWC. Lets discuss each separately and what rules apply to each - and what differences there are between subscribers and non-subscribers. There are only FOUR categories that a Texas employer falls into as it pertains to coveage for worklace (on-the-job) injuries:
1. STATUTORY WORK COMP POLICY: The employer has purchased a work comp policy and is not subject to above rules.
2. LEGAL NON-SUBSCRIBER: An employer that elects not to purchase a work comp policy must fill out a very short Form 5 and submit annually to the DWC. If form is mailed in be sure to send it "Certified Mail" because the old rule applies---if DWC didn't get it, and employer can't prove they sent it--then they are not in compliance with the rule. The form may be faxed to DWC or it may be completed and filed on-line.
3. ILLEGAL NON-SUBSCRIBER: If your client does not purchase workers' compensation and does not submit a DWC Form 5 to the state, they are an "Illegal" Non-Subscriber and are still subject to rules of the State Department of Workers' Compensation. Of the 38-40% of Texas employers that claim non-subscription status, the State estimates that only 10% of non-subscribers have filed their DWC Form 5. The State is beginning to notify those employers that have not filed their Form 5, and will be assessing penalties in the future. So please advise your clients to just take 10 minutes once a year to submit their Form 5 and be in compliance...as a legal non-subscriber. A COMPLETE FORM 5 KIT IS ATTACHED TO COPY AND GIVE TO YOUR CLIENTS...Just to keep them legal.
4. CERTIFIED SELF-INSURER: Some employers may say that they want to self-insure and pay benefits out of their pocket. That is OK but they are still subject to #3...whether they have insurance or not. And they still by law must provide an ERISA plan if they pay benefits out of their pocket or through an insurance policy. See ERISA tab on our website. Don't confuse someone that wants to go bare and not carry insurance with a Certified Self-Insured. A Certified Self-Insured is an employer that applies to the State that they want to set up a program in which they pay Work Comp benefits to their employees. At present there are only about 34 employers that qualify for this status. They must submit lengthy forms and financial plans to the state to qualify. They must establish funding requirements, TPA facilities, etc... In short, they are setting up their own internal insurance company and are responsible for any losses...as well as any profits if administrated properly. Again, only 34 Texas companies to date, qualify for this structure.
If this is as clear as mud...please call Terry at 800-829-8622 for clarification!
The DWC Form 7 is a form required by the State, if as a non-subscriber employer, you have an employee that has at least one (1) missed day due to an on-the-job injury, you must complete and submit this form to the DWC.
COMPLETE FORMS 5 AND 7 KITS ARE ATTACHED FOR YOU TO GIVE TO YOUR CLIENT. Click on links below to view and download.
Most MGAs or GAs would not give you all these details, but after 25 years as a leading MGA in the Non-Subscription marketplace...We want to help you cover all the bases. Again please call us with any questions you may have! Most non-subscriber, PEI type policies include these forms with their claims kit...but check to be sure. If you are not sure about any of the above---again, please call us.
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