With Walmart, one of Texas' largest private employers, droppingout of the state's workers' compensation system in March, Texas'unique approach to workers' comp. is receiving renewed attentionfrom both critics and supporters, according to stories in TheNew York Times and the Texas Tribune.

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According to the Texas Tribune story,Texas is theonly state in the country that allows employers of any size todecline to carry state-regulated workers' comp. coverage, allowingbusinesses to develop their own injury-benefit programs.

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The story cites 2010 Texas Department of Insurance figuresnoting that 15 percent of businesses in the state with over 500employees do not carry state workers' comp. coverage.

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The article cites Terry Frakes, senior vice president of publicaffairs at Texas Mutual, which is the largest provider of workers'compensation coverage in Texas, as saying benefits for injuredemployees are not as good under private plans, noting, for example,that Walmart's in-house plan caps total medical coverage at$300,000 for individual injuries, compared with lifetime coveragefor the injury under state workers' comp.

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The Texas Tribune also quotes Rick Levy, an AFL-CIOlobbyist, who says the private plans pose a “real threat” to theworkers' compensation system by putting competitive pressures oncompanies remaining in the state's workers' comp. system to findcost savings similar to those with private plans.

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Advocates of the private systems quoted in the story argue thatthe plans “restore the balance between adequate benefits andemployee accountability,” and also that the plans could pressureinsurers to keep workers' comp. premiums low as more companies optout.

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For more information, see the Texas Tribune story, Walmart Stirs Concern Over Workers' Compensation System.

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