Current through Reg. 49, No. 38; September 20, 2024
(a) Upon the
request of an injured employee entitled to lifetime income benefits (LIBs) as
defined in the Act, the insurance carrier and an injured employee may agree to
change the frequency of LIBs payments from the standard weekly period to a
monthly period. The agreement to change the payment frequency must be in
writing and is only required to be filed with the Commission if the Commission
requests a copy. To relieve the insurance carrier of the responsibility to pay
LIBs weekly a valid written agreement must include the following terms and
conditions:
(1) the agreement for the monthly
payment of LIBs shall be effective the first calendar day of the month
following the month in which the written agreement was entered into by the
insurance carrier and the injured employee;
(2) monthly LIBs shall be issued on or before
the seventh day of the month for which benefits are due;
(3) weekly LIBs payments shall continue
through the end of the month in which the agreement was signed;
(4) payment of the last week of LIBs to
transition from weekly payment of LIBs to monthly payments shall be prorated to
the end of the month to ensure the injured employee receives LIBs through the
last day of the month;
(5) the
monthly compensation rate shall be calculated by multiplying the weekly
compensation rate by 4.34821;
(6)
if less than the maximum weekly compensation rate in effect on the date of the
compensable injury is being paid, a completed Employer's Wage Statement must be
included with the injured employee's copy of the written agreement;
and
(7) A clear statement regarding
the due date of the annual three percent increase in LIBs must be
included.
(b) At any
time after signing the agreement for the monthly payment of LIBs, the injured
employee or the insurance carrier may notify the other party in writing that it
no longer agrees to the monthly payment of LIBs. In this case, the insurance
carrier shall pay all accrued but unpaid LIBs at the end of the current monthly
cycle and shall continue to pay LIBs weekly as and when they accrue and are
due. The last monthly payment shall be prorated to ensure the insurance carrier
pays the appropriate amount of LIBs.
(c) The insurance carrier and the injured
employee entitled to LIBs may agree that the carrier will purchase an annuity
for payment of LIBs. An application for payment of LIBs by annuity must be
submitted to the Commission for approval in the form, format, and manner
required by the Commission. If less than the maximum weekly compensation rate
in effect on the date of the compensable injury is being paid, a complete
Employer's Wage Statement must be included with the application.
(d) An annuity for the payment of LIBs shall
meet the following terms and conditions.
(1)
LIBs payments shall be initiated no later than the 45th day after the date the
written agreement was approved by the Commission.
(2) The company providing an annuity for the
payment of LIBs must be licensed to do business in Texas and must have a
current A. M. Best rating of B+ or better or have a Standard & Poor's
rating of claims paying ability of A or better.
(3) The workers' compensation insurance
carrier must guarantee the payments provided by the annuity company in the
event of default.
(4) The annuity
contract must include funds for payment of the annual three percent increase in
LIBs required by the Act, compounded annually.
(5) The injured employee, or guardian if
applicable, shall not be allowed to assign the right to receive LIBs from an
annuity. All LIBs must be paid to the order of the injured employee or the
legal guardian, if applicable.
(6)
An annuity cannot be purchased to fund the payment of medical costs incurred by
an injured employee entitled to LIBs.
(7) The annuity company shall pay LIBs either
weekly or monthly as indicated in the application for payment of LIBs by
annuity.
(8) If monthly payments
are agreed to by the insurance carrier and the injured employee, the transition
from weekly to monthly benefits paid by annuity shall be the same as that for
LIBs paid by the responsible insurance carrier set out in subsection (a) of
this section.
(e) This
section applies only to agreements entered into on or after January 1, 2000,
for payment of LIBs under the provisions of the Act.
