Texas Department of Insurance

The Delivery of Temporary Income Benefits under the Texas Workers' Compensation System: Receipt of First Payment

EXECUTIVE SUMMARY

A primary component of all workers' compensation insurance programs is the replacement of lost earnings. This is accomplished through the provision of cash payments, commonly referred to as income benefits. Although there are several classifications of income benefits, the first payments normally received by injured workers in Texas are temporary income benefits (TIBs). These benefits are intended to provide injured workers with monetary support during their convalescence. To alleviate worker hardship and to ensure efficiency in the workers' compensation system, it is important that the initial payment of benefits occurs in a timely manner.

The purpose of this study is to provide an objective analysis of the elapsed time period prior to the receipt of the first TIBs payment and to provide baseline data for comparative purposes in subsequent years. This study compares the delivery of benefits under the old and new laws. The study also examines late payments under the new law in an attempt to identify characteristics and/or behaviors that were more likely to result in an injured worker receiving a late payment. Data collected by the Industrial Accident Board for reported injuries occurring in 1989 and data collected by the Texas Workers' Compensation Commission for reported injuries occurring in 1991 formed the basis for analysis. The comparison of the delivery of benefits under the old and new laws analyzed 119,922 1989 claims and 73,011 1991 claims.1 The analysis of late payments under the new law was based on 66,614 claims. A total of 6,397 controverted claims were excluded. Key findings are presented below.

Comparison of Benefit Delivery: 1989 and 1991

• The average number of days from the date when lost time began to the receipt of TIBs decreased from 31.4 days in 1989 to 24.2 days in 1991. Between 1989 and 1991, the average number of days was reduced by 22.9 percent or 7.2 days.
• When controverted claims were excluded from the 1991 data, the average number of days dropped to 20.8.
• In 1991, 58.4 percent of all claims were paid within 15 days as compared to only 37 percent in 1989.

1991 Late Payments

• Eighty-six percent of 1991 claims were paid by the payment due date.
• Of the 14 percent of claims paid late, the average number of days from the date lost time began to payment was 52 days. Late payments, on average, were made 27.9 days after the payment due date.

Characteristics Associated with Late Payment of 1991 Claims

• No strong socio-demographic patterns associated with late payments were found. Minor differences by gender, occupation and tenure, and the likelihood of an injured worker receiving a late payment were observed.
• Females were 2.8 percentage points more likely to receive a late payment than males.
• Injured workers in service occupations were from 2.6 to 4.1 percentage points more likely to receive a late payment than workers in other occupations.
• Injured workers with less than one year of employment with a current employer were two percentage points more likely to receive a late payment than those with 10 or more years.

Behaviors Associated with Late Payment of 1991 Claims

• Injured workers who reported injuries to employers "late" were almost twice (1.8) as likely to receive a late payment as those who reported "timely".
• In claims where the employers' TWCC-1s were filed "late", injured workers were five times as likely to receive a late payment as compared to those who filed "timely".
• The volume of claims handled by an insurance carrier did not have a statistically significant impact on an injured wokrer receiving a late payment.

Footnotes:

1. In this study, the term claim is defined as an indemnity claim with an injury date in 1989 or 1991, reported and paid as of December 31 of the following year. Return to Footnote Link 1

For more information contact: WCResearch@tdi.state.tx.us