By Joining NCCI Texas Opt Out Could Fade
Did Texas opt out of Its non-subscriber system? Texas has decided to join the Experience Rating System supplied by NCCI. According to a fellow WC blogger, Texas may also look to remove the opt-out provisions in the law for the construction industry. That is a major step in starting to remove the Texas opt out provision for employers.
One has to wonder if NCCI had an impact on or at least suggested the move to a full non-opt-out system in Texas. The Law of Large Numbers may not be a concern as The Lone Star State is such a large state. Then again, if a certain market segment opted out, then the law may be applicable.
One of the most surprising figures out of Texas is 50% of all construction workers in the state are undocumented immigrants. Specialties like concrete and drywall probably have more than 50 percent, undocumented workers, according to the article.
This may cause the construction companies that opt out to have a distinct price advantage over fully-insured companies when submitting bids on contracts. This situation is not limited to just the construction industries. Any Texas company could use a price advantage.
One has to also ask – if TX decides to end its opt-out program for the construction industry, will Oklahoma follow suit in its opt-out program? This would have seemed far-fetched until the state decided to join NCCI’s rating system instead of their own.
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