Statutory Employer, Public Information Act, and Remarriage Bills Move Forward

HB 1668 by Rep. Paul Workman (R-Austin) has been placed on the May 9, 2015 General State Calendar, where it awaits action by the full House of Representatives. The bill provides that a subcontractor who is operating as an independent contractor and who has, pursuant to a written agreement with the general contractor, assumed the responsibilities of an employer for the performance of the work, may nevertheless enter into a written agreement whereby the general contractor provides workers’ compensation coverage to the subcontractor and the employees of the subcontractor.

HB 1668 was apparently filed in response to the trial court’s judgment in TIC Energy & Chem., Inc. v. Martin, No. 13-14-00278-CV, 2015 WL 127777 (Tex. App. Jan. 8, 2015). In that case the 13th Court of Appeals held that the Act did not bar the suit of an injured worker who had been employed by a general contractor against a subcontractor. The court held that two provisions of the Act – § 406.123 and § 406.122 – are in “irreconcilable conflict.” The court wrote that § 406.123(e) unambiguously states that the general contractor is deemed the “employer” of the subcontractor for purposes of the Act, but that § 406.122(b) unambiguously states that the subcontractor is not deemed an “employee” of the general contractor for workers’ compensation purposes.

SB 978 by Sen. Brandon Creighton (R-Beaumont) was reported favorably without amendment from the House Insurance Committee on May 6, 2015. The committee recommended the bill be sent to the Local & Consent calendar. The proposed bill would amend current law relating to public information regarding workers’ compensation insurance rate filings. More specifically, the bill seeks to amend the workers’ compensation filings statute, Section 2053.004, Insurance Code, to provide proprietary confidentiality protections through Chapter 552, Government Code. According to Sen. Creighton’s statement of intent:

Existing laws do not adequately protect workers’ compensation filings from competitors that wish to use proprietary information received through disclosure. Filings for property and casualty lines, however, are subject to Chapter 552, Government Code, which protects intellectual property in such filings from public disclosure to those who wish to use the filer’s innovations without having to invest in creating such innovations themselves. Similar protections are needed as the Texas Basic Manual of Rules, Classification and Experience Rating for Workers’ Compensation now includes a company’s modeled rating factor and supportive documents.

One insurer was recently required to file a model used in the pricing of its workers’ compensation products. Another insurer requested the filed model, and under Section 2053.004 (Public Inspection of Information), Insurance Code, it had to be disclosed. The model reflected approximately 6,000 hours of work by that company’s actuaries, statisticians, and analysts. The disclosure of this information allowed competitors to obtain proprietary innovation without a similar expenditure of time, effort, and money.

If the House passes the bill in its present form, it will be sent to the Governor’s office for his signature. The bill would then take effect September 1, 2015.

HB 1094 by Rep. Charlie Geren (R-River Oaks), which passed in the Texas House on May 1, 2015 has been referred to the Senate Business & Commerce Committee. The bill provides that surviving spouses of first responders will receive benefits for life, regardless of remarriage. One effect of the bill is to preclude redistribution of benefits to eligible children after a spouse has remarried. The bill now moves to the Texas Senate for consideration by that body.