Q&A on Texas Nonsubscription
What is Nonsubscription and how does it differ from Workers Compensation?
Simply stated, Workers Compensation is an Occupation Injury Benefit Program with the benefits determined by the state.
Nonsubscription is an Occupational Injury Benefit Program with the benefits determined by the Employer.
33% of all Texas employers—Companies like WalMart and Home Depot, Baylor and Hermann Hospitals, Neiman Marcus and Macy’s, Sonic and McDonald’s, as well as your local garage, the nearest manufacturing or machine shop, and the B-B-Q restaurant just down the street, over 114,000 employers in total—chose an option other than WC.
We have found the three main reasons being:
– Pricing is generally 25-40% less than WC, even for credit mod accounts.
– Adoption of advanced risk management techniques and claims control generally unavailable within the WC system.
– WC experience mods drop off after 3 years. Debit mod accounts love this feature.
Is Nonsubscription a substitute for Workers Compensation?
Nonsubscription, even “The CPro Texas Option”, is not a substitute for WC. “The CPro Texas Option” is an Occupational Injury Benefit Program that provides options not generally available within the WC system, such as:
– WC provides disability benefits of up to 70% (75% for employees making less than $8.50/hour) of the average weekly wage. “The CPro Texas Option” allows the employer to choose benefit levels from 70% to 90%.
– The current maximum weekly disability limit under WC is $861. For higher wage industries, “The CPro Texas Option” provides weekly benefits up to $1,000. Lower wage industries only pay for what they need, as low as $600 per week.
– WC provides up to 401 weeks of disability benefits for total disability. “The CPro Texas Option” provides the employer choices of 2, 3, or 5 year benefit periods.
– Legal liability claims under WC must be filed in the courts. “The CPro Texas Option” provides mandatory arbitration. Under WC, legal liability requires a death and gross negligence. For employers not purchasing WC, to have legal liability, an employer’s negligence must be the proximate cause of the injury.
How is your policy different than the older generation of non-subscriber products provided by everyone else?
We have developed a more Comprehensive Policy Comparison with 8 other non-subscriber carriers. Email us and it will be sent to you immediately. However, I can quickly summarize the differentiators offered by CPro that is not offered anywhere else in the industry, and certainly not by the older generation products.
The differentiators are:
- CPro offers No Dollar Limit Medical.
- CPro rejects the industry wide use of a CSL product. Every benefit section (be it medical, disability, death or legal) has its own separate limit.
- CPro provides every employee their own limit and every employer the protection of an individualized limit. If an employer purchases a $2,000,000 policy limit from CPro, and has an occurrence with 20 employees involved, the employer will have up to $40,000,000 of legal liability protection (20 x $2,000,000) plus No Dollar Limit Medical for each and every employee, plus disability benefits for each employee, plus AD&D benefits for each employee. Does anyone else offer you such benefits? In fact, we offer legal liability per employee limits of $1M, $2M and $5M.
- We offer benefit periods of up to 260 weeks. We also offer 106 and 156 weeks.
- We offer 1st dollar defense on virtually every account that requests it. Our minimum premium for this extension is $2,500.
Describe your “NO Dollar Limit Medical”. Does it mean what it’s actually called?
The marketing rep of our largest competitor has recently been calling our Agents and telling them our product is all “smoke and mirrors” because nobody can offer true No Dollar Limit Medical. I’ll bet our hundreds of Brothers who offer WC would be surprised at this as they have been offering No Dollar Limit Medical for 50+ years. The real surprise is that we are the only one to offer it to non-subscribers. It is exactly as it sounds. If there is a covered medical claim paid during the Benefit Period chosen by your Employer, there is No Dollar Limit on the amount of medical paid.
If so many other carriers offer No Dollar Limit Medical, why don’t all the other non-sub carriers?
Simply, they can’t. Every non-sub carrier, other than CPRO, adheres to a decades old business model from the horse and buggy era of nonsubscription. In 1988, the entire industry adopted a CSL policy format where all the policy sections (medical, disability, AD&D and legal) drew from one limit: a true Combined Single Limit (“CSL” or “CSLI”). It is impossible for any carrier to offer No Dollar Limit medical with a fixed CSL limit of any size.
If your employer purchases a $1,000,000 limit from any other non-subscriber carrier than CPro, and has a covered $200,000 medical loss, there is only $800,000 left for disability, AD&D and legal, combined. If that same claim has $100,000 of disability, only $700,000 is left for AD&D and legal. Imagine what would happen if that same claim had $1,000,000 in medical. In the CPro policy, every section has its own specified limit.
Buy our smallest policy limit of $1,000,000 and you get $1,000,000 of legal PER EMPLOYEE, plus NO Dollar Limit Medical, plus separate disability benefits plus AD&D. Even under the smallest CPro policy, if you have a covered $2,000,000 medical claim within the Benefit Period, we would pay all the medical plus still have a full $1,000,000 per employee of legal remaining to protect your employer.
What is an ERISA Plan and is it required for nonsubscription?
Every employee benefit is required, under Federal Law, to be provided to covered employees in writing. This written plan is an ERISA Plan, which is provided for your Client. If you have medical or dental insurance provided by your Employer, then you receive a document each year outlining your benefits, deductibles, etc. This is part of an ERISA Plan. Since arbitration is required for an employee to receive benefits, in order to be covered, an employee must acknowledge receipt of the Plan. The Employers responsibility is to make sure all employees receive and acknowledge the Plan.
If an existing non-subscriber Client purchases your Nationwide product, must our Client roll out a new ERISA Plan to its employees?
No. If the current plan includes mandatory arbitration, there is no need to go through the time and expense of rolling out a new Plan to employees. All the employer need to do is sign and send us certification that he has rolled out his current ERISA Plan, with mandatory arbitration, to all employees.
Contact Stacey if you would like this half page certification form. However, if the Employer wishes to offer to his employees the No Dollar Limit Medical Benefit that our Policy provides, we can easily do an amendment to his current Plan. Since this is an increase in Benefits, he can advise his employees of this increased Benefit at no cost to them, in any manner that is most advantageous to him (even email). There is no need for employee acknowledgement.
The lone exception is truckers or plans without mandatory arbitration. In those particular cases only, we require a rollout of our Plan.
Is the ERISA Plan, or the amendment described above, included in your price?
Yes, our quotes are all inclusive.
How are you able to offer an Aristocratic product at Democratic prices?
Our goal is to offer our product at a price competitive with the older generation non-subscriber policy everywhere else in the marketplace, which is generally 25-40% less than WC. It’s actually quite easy using the most modern risk management and claims handling techniques. Our secret weapon is our TPA, CCA. Through CCA, we have been able to bring the expertise and most favorable outcomes to smaller and mid-sized non-subscribers.
Must we use CCA as the TPA?
On SIRs of less than $50,000 or less, Yes. With SIRs of $50,000 or above, on a case by case basis, we will consider other approved TPAs or self-administration. Even with the larger SIRs, CCA should be given top consideration.
What are the CPro payment plans?
There was no need to innovate here. Like everyone else, we accept full payment or premium finance. For our 10% down and 10 equal installment benefit, we have adopted the Berkshire Hathaway EFT billing system. The EFT is collected on the same day of the month as the original effective date. An email notifying the Insured of the date and amount is sent three days prior to the draft. EFT allows us to know more quickly if a payment is not being made, thus reducing unearned premium that may need to be collected after cancellation. Additionally, for an Insured not wishing to utilize an EFT draft, we have adopted Combined’s direct bill payment plan of 25% down and 9 payments.
What is your quote turnaround?
We have a state of the art underwriting and policy issuance system. What used to take days and involve many staff members, now takes us an average of a day or less to provide you a quote. On certain larger accounts, or those with specified severe claims, quotes may take up to 3 days.
To get our Policy Comparison, discuss in greater detail, or arrange for a visit, contact Alan Hardin at firstname.lastname@example.org or call 214-673-3798.