Actuary Confirms Texas Option Industry Data

PartnerSource announces a new analysis showing that Texas nonsubscriber Option Injury benefit plans¹ result in shorter duration of disability and improved initial and sustained return to work, as confirmed by an independent actuary.  Although the Oklahoma Option is a relatively new program, similar shortened durations and faster return to work are achieved under that program, as well.

Following is a summary of the Texas Option findings:

Background on New Study:  Over the past six months, PartnerSource has worked with Leigh J. Halliwell, FCAS, MAAA, an independent actuary (previously with the National Council of compensation Insurance) to review and confirm PartnerSource data compilations and findings on medical outcomes under the Texas nonsubscriber Option.  This review compliments the existing body of publicly available research.²

Scope of Review:  Using a database of over 160,000 Texas Option injury benefit claims from 33 claims administration sources over a 10-year period (2005-2015) - without excluding any available data or source - PartnerSource compared statistics against information from the Workers' Compensation Research Institute and Texas Department of Insurance.³  This comparison was validated by Mr. Halliwell.

Findings:

1. Shorter Duration of Disability.  For claims with 8 or more days of lost time.

a.  The average time lost in workers' comp is 12 weeks.

b. The average time lost in Texas nonsubscriber Option programs is 8 weeks.

2. Improved Initial Return to Work.  The initial return to work rate measures the percentage of injured employees receiving income benefits who returned to work within six months of a work-related injury.  The initial return to work rate at 6 months is 83% in Texas workers' compensation, compared to 97% under the Texas Option.

3. Sustained Return to Work.  The sustained return to work rate measures the percentage of injured employees receiving income benefits who have been able to sustain their return to work status.  the sustained return to work rate at 6 months is 75% in Texas workers' compensation, compared to 96% under the Texas Option.

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Endnotes:

¹ Alternatives to traditional workers' compensation are known by several names: Options, Nonsubscription, Nonsubscriber, Opt-Out, Occupational Injury Benefit Plans, ERISA Option, etc.

² See, for example

• Stanford University Study
• Texas Performance Study
• Oklahoma Performance Study
• ARAWC Summary of Analyses and Reports

Numerous workers' compensation industry leaders also maintain private data on Option programs.  See also Comparing Workers' Comp Industry and Option Program Transparency and Data Reporting.

³ See Setting the Standard - An Analysis of the Impact of the 2005 Legislative Reforms on the Texas Workers' Compensation System - 2014 Results; Biennial Report of the Texas Department of Insurance to the 84th Legislature - Division of Workers' Compensation (2014); Return to Work in the Texas Workers' Compensation System, (2015); WCRI Average Duration of Temporary Disability (in Weeks) for Claims with More Than 7 Days of Lost time, 2013/2014.  This data analysis relies upon established Texas workers' compensation system metrics and good faith comparisons to Texas Option data.