Product Update

Workers Compensation Nonsubscription Discussion Updated in Risk Financing

This release of Risk Financing features updates to the discussion on workers compensation nonsubscription.

Employers have a number of options for complying with state workers compensation regulations. They can participate in an association program or group pool, obtain state approval for self-insurance, establish a captive insurance program, or simply purchase their own workers compensation policy. In Texas, employers have another choice. Employers can choose to "opt out" of the traditional workers compensation system. Opting out of the workers compensation system in Texas is referred to as workers compensation "nonsubscription."

The updates to this section were completed by Scott Kakacek, president of Rising Star Insurance Group, Inc., in Richardson, Texas. Mr. Kakacek's father, the late Keith Kakacek, was the initial author. The discussion offers a summary of the history of workers compensation nonsubscription, outlines the rights and obligations of employers under both traditional workers compensation insurance and the nonsubscription option, provides the framework for a successful nonsubscription program, and analyzes the advantages and disadvantages of the approach.