2023 Texas Statutes › Labor Code › Title 2 - Protection of Laborers › Subtitle E - Regulation of Certain Occupations › Chapter 91 - Professional Employer Organizations › Subchapter D. Powers and Duties of License Holder › Section 91.042. Workers' Compensation Insurance; Administrative Violation

Sec. 91.042.  WORKERS' COMPENSATION INSURANCE; ADMINISTRATIVE VIOLATION.  (a)  A license holder or client may elect to obtain workers' compensation insurance coverage for covered employees through an insurance company as defined under Section 401.011(28) or through self-insurance as provided under Chapter 407.
(a-1)  The client and the professional employer organization shall specify in the professional employer services agreement whether the parties have elected to obtain workers' compensation insurance coverage for the covered employees and shall specify which party must maintain coverage.  If the license holder maintains workers' compensation insurance coverage for the client, an individual who is an executive employee, as described by Section 406.097, of the client is eligible to be treated as an executive employee for premium calculation and classification purposes.  A copy of the professional employer services agreement must be provided to the Texas Department of Insurance on request.  Information obtained by the Texas Department of Insurance under this section is confidential and not subject to disclosure under Chapter 552, Government Code.
(a-2)  If the client elects to maintain workers' compensation insurance coverage for the covered employees under the client's policy or other coverage, the client shall pay workers' compensation insurance premiums for the covered employees based on the experience rating of the client.
(b)  If a license holder maintains workers' compensation insurance coverage for covered employees, the license holder shall pay workers' compensation insurance premiums for the covered employees based on the experience rating of the client for the first two years the covered employees are covered under the professional employer organization's policy and as further provided by rule by the Texas Department of Insurance.
(c)  For workers' compensation insurance purposes, a license holder and the license holder's client shall be coemployers.  If either a license holder or a client elects to obtain workers' compensation insurance coverage for covered employees, the client and the license holder are subject to Sections 406.005, 406.034, 408.001, and 411.032.
(c-1)  Notwithstanding Subsection (c), for purposes of Section 462.308(a)(2), Insurance Code, the client is considered to be the insured employer.
(d)  If a license holder or a client does not elect to obtain workers' compensation insurance coverage for covered employees, both the license holder and the client are subject to Sections 406.004, 406.005, 406.033, and 411.032.
(e)  After the expiration of the two-year period under Subsection (b), if the client elects to obtain workers' compensation insurance coverage for covered employees through coverage maintained by the client, or if the professional employer services agreement is terminated and the client elects to maintain, through coverage maintained by the client or through coverage maintained by a successor professional employer organization, workers' compensation insurance coverage for employees previously covered by the former professional employer organization's policy, the premium for the workers' compensation insurance coverage for the client shall be based on the lower of:
(1)  the experience modifier of the client before being covered under the professional employer organization's coverage; or
(2)  the experience modifier of the license holder at the time the client's coverage under the professional employer organization's coverage is terminated.
(f)  On request, an insurer shall provide the necessary computations to the prospective workers' compensation insurer of the client to comply with Subsection (e).
(g)  On the written request of a client, a license holder that elects to provide workers' compensation insurance for covered employees shall provide to the client a list of:
(1)  claims associated with that client made against the license holder's workers' compensation policy; and
(2)  payments made and reserves established on each claim.
(h)  The license holder shall provide the information described by Subsection (g) in writing from the license holder's own records, if the license holder is a qualified self-insurer, or from information the license holder received from the license holder's workers' compensation insurance provider following the license holder's request under Section 2051.151, Insurance Code, not later than the 60th day after the date the license holder receives the client's written request.  For purposes of this subsection, information is considered to be provided to the client on the date the information is:
(1)  received by the United States Postal Service; or
(2)  personally delivered to the client.
(i)  A license holder that fails to comply with  Subsection (g) or (h) commits a Class D administrative violation as provided by Section 415.011.
Added by Acts 1995, 74th Leg., ch. 76, Sec. 9.20(a), eff. Sept. 1, 1995.
Amended by:
Acts 2011, 82nd Leg., R.S., Ch. 477 (H.B. 625), Sec. 1, eff. September 1, 2011.
Acts 2011, 82nd Leg., R.S., Ch. 477 (H.B. 625), Sec. 2, eff. September 1, 2011.
Acts 2013, 83rd Leg., R.S., Ch. 117 (S.B. 1286), Sec. 17, eff. September 1, 2013.