28 Tex. Admin. Code § 131.4 - Change in Payment Period; Purchase of Annuity for Lifetime Income Benefits
(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.
Notes
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