Texas Workers’ Compensation Law and Employer Reimbursement–Texas Department of Insurance

Entitlement To Reimbursement

After an injury, an employer may begin benefit payments to the IW. Section 408.003(a)(1). An employer may initiate benefits, including medical benefits to compensate an employee during a period in which the IC has contested compensability of the injury, contested liability for the injury, or has not completed its initial investigation of the injury. Section 126.13(a)(2). If there is a written request or written agreement from the IW, the employer may supplement income benefits paid to the IW by the IC in an amount up to the difference between the income benefit paid by the IC and the IW’s net preinjury wage. Section 408.003(a)(2); APD 070871-s . Any payments made by the employer under Section 408.003 may not be construed as an admission of liability. Section 408.003(d)(1) . An employer may request reimbursement from the IC when the employer has paid for health care provided for a compensable injury provided notice of injury is in compliance with Section 409.005 (Employer’s First Report of Injury). Section 133.280(a).

In order to establish entitlement to reimbursement, all of Section 408.003 must be complied with fully, including Section 408.003(c) requiring the employer to notify the Division and the IC of the initiation of and amount of payments made under this section. APD 030257-s; APD 030258-s; APD 030259-s; APD 070871-s.

An employer who initiates payment of benefits shall report the payment to the IC within seven days of payment. Section 126.13(c)(1) . An IC who receives notification of payment by an employer shall notify the employer in writing within seven days of acceptance of the claim by the IC or a determination of liability for the claim. Section 126.13(c)(2). The employer shall report to the IC the amount of any benefits provided to the employee within seven days of being notified by the IC that it has accepted or been found liable for a claim. Section 126.13(c)(3). An IC shall, not later than the seventh day after the carrier receives the report of the benefits provided to the employee, reimburse the employer the compensation the IC would have otherwise paid. Section 126.13(c)(4).

Amount Of Reimbursement. The IC shall reimburse the employer for the amount of benefits paid by the employer to which the IW was entitled if the injury is found to be compensable. Section 408.003(b); Section 126.13(b); Am. Cas. Co. v. Martin, 97 S W. 3d 679 (Tex.App.–Dallas 2003, no pet.).

Employer Ineligible For Reimbursement. If the employer is required to make salary continuation payments due to a contractual obligation with the IW or a group of employees (such as a collective bargaining agreement), or a written agreement or policy, the employer is not eligible for reimbursement under Section 408.003 for those payments. Section 408.003(g); Section 129.7(a).

Employer Waiver Of Reimbursement. The employer waives the right to reimbursement from the IC, if the employer fails to notify the IC of the IW’s injury in accordance with Section 409.005 (Employer’s First Report of Injury). Section 408.003(e); Section 126.13(b)(1); Section 120.2(h); Am. Cas Co. v. Martin, 97 S. W. 3d 679 (Tex. App.–Dallas 2003, no pet.); APD 002977-s.

Reduction of IIBS. Employer payments made under Section 408.003 that are not reimbursed or reimbursable under Section 408.003 may be reimbursed under Section 408.127 by reducing IIBs. Section 408.003(b); Section 408.127. However, no reduction of IIBs is allowed where the employer payments do not meet the criteria to be a payment made under Section 408.003. APD 070871-s.

Subclaimant Status. An employer is properly a subclaimant when seeking reimbursement under Section 408.003 for benefits provided to the IW. APD 002977-s. If the IW is barred from recovery under the 1989 Act, a subclaimant (the employer) is not entitled to recovery under the 1989 Act. Tex. Mut. Ins. Co. v. Sonic Sys. Int’l Inc., 214 S. W. 3d 469 (Tex. App.–Houston [14th Dist.] 2007, pet. de ked); APD 020771.

Williams, McClure & Parmelee is dedicated to high quality legal representation of businesses and insurance companies in a variety of matters. We are experienced Texas civil litigation attorneys based in Fort Worth who know Texas courts and Texas law. For more information, please contact the law firm at 817-335-8800. The firm’s new office location is 5601 Bridge Street, Suite 300, Fort Worth, Texas 76112.

Martindale AVtexas[2]