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The Employer’sGuide toWorkers’ CompWORKERS’ COMPENSATION INSURANCEW O R KS A F E , T E X A SSM

Table of ContentsnWorkers’ Comp: What Is It and Why Do You Need it? 1Legal protection for you 1Medical and income benefits for your employees 1nLower Your Premium 2Safety groups 2Health care network 3Dividends 4nManage Your Claims 5Prevent accidents 5Launch a return-to-work process 7Fight fraud 8nFind a Pharmacy 9nSave Time With Texas Mutual Online 9nLearn About Our Scholarship Program 10nSpeak the Language of Workers’ Comp 11nRelated Sources 13nAbout Texas Mutual Insurance Company 14nContact Us 15

Workers’ Comp: What Is It and Why Do You Need It?Legal protection for youEmployers who do not carry workers’ compensation coverage bear complete financialresponsibility for an employee’s injury or death if the company is found negligent.The total amount they could be responsible for is unlimited. In short, going “bare”could cost them their business.Section 408.001 of the Texas Labor Code explains that, with only a few exceptions,workers’ comp benefits are the injured employee’s sole source of recovery from anemployer who carries valid workers’ comp coverage.Medical and income benefits for your employeesIf one of your employees is injured on the job, your workers’ compensationinsurance will:XXPay all reasonably required medical bills for a work-related injuryXXReplace some lost wages and compensate the injured employee for permanentimpairment caused by a compensable work-related injuryXXPay benefits based on the employee’s pre-injury income and the severityof the injuryXXPay income benefits to qualifying beneficiaries of an employee who died as theresult of a compensable work-related accident and reimburse them for actualburial costs (up to 10,000)1 The Employer’s Guide to Workers’ CompWorkers’ compensation is a state-regulated insurance program that protectsinjured workers and employers in the event of an on-the-job injury. Workers’ compprovides the best protection against the consequences of on-the-job injuries, for youand your employees.

Texas Mutual Insurance Company 2Some employers think that they have found a cheaper substitute for workers’compensation by purchasing alternative policies. They may not know that alternativepolicies often leave huge gaps in coverage, limit medical benefits, and refuse to coversome illnesses, diseases and accidents.More informationVisit www.tdi.texas.gov/wc/employer/ for more information about the benefits ofchoosing a workers’ comp policy. Lower Your PremiumWorkers’ compensation is one of many expenses employers have to consider, but youcan make it a smaller piece of your budget by joining a safety group, choosing ourworkers’ comp health care network option and earning dividends.Safety groupsState law allows employers in similar industries to purchase their workers’ compcoverage as a group. Employers who join a safety group can:XXTake advantage of free workplace safety resources designed specifically fortheir industryXXReceive a premium discountXXParticipate in our group and individual dividend programs** Dividends are based on performance and therefore are not guaranteed.

More informationTexas Mutual offers safety group opportunities for a range of industries, including oiland gas, restaurants, construction, health care and auto repair. Ask your agent for moreinformation or visit texasmutual.com.Helping our policyholders control their workers’ compensation costs is an importantpart of what we do. One of the ways we put that into action is with our workers’compensation health care network. Policyholders who enroll in the network receive a12 percent network discount, and also benefit from improved care, better outcomesand lower claim costs for their injured workers.More informationTexas Mutual policyholders do not have to wait for their policy to renew tojoin the network. Speak to your agent or visit texasmutual.com/hcn. The Employer’s Guide to Workers’ CompHealth care network3

DividendsTexas Mutual Insurance Company 4The costs of the benefits we pay to injured workers affect the overall cost of workers’compensation insurance, which is why we reward employers who help us controlthose costs. A dividend is essentially a monetary reward for policyholders who help usprovide affordable workers’ compensation coverage by controlling their claim costs.XXYour dividend has the potential to increase every year through your fifthconsecutive year with Texas Mutual. You continue to be rewarded for the mostrecent five years’ experience thereafter. If you leave before your fifth consecutiveyear, you start over if you return to Texas Mutual.XXYou can improve your chances of earning a dividend by preventing accidents,committing to a return-to-work process and fighting workers’ comp fraud.XXPolicyholders have the potential to earn both individual and safetygroup dividends.*XXNewer policyholders have the opportunity to earn early-qualifier dividends.These dividends reward policyholders for safe workplaces before they are eligibleto receive a regular dividend.2,2002,1002,0001,9001,800Individual Policyholder DividendsInception to Date[in 6006050050400403003020020101000Safety Group DividendsInception to Date[in millions]0’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10’11 ’12 ’13 ’14 ’15 ’16 ’17’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17

More informationFor more information about dividends, visit texasmutual.com/ownershippays.* Dividends are based on performance and therefore are not guaranteed.Manage Your ClaimsTexas Mutual manages your claims by investigating injuries for compensability,helping injured workers get back on the job, and ensuring that medical treatments arereasonable, necessary and related to the compensable injury. You can take a hands-onapproach to managing claims by preventing accidents, launching a return-to-workprocess and fighting fraud.Prevent accidentsThe easiest way to control your claim costs is to prevent accidents. For every dollar youinvest in safety, you could get four to six dollars in return.Launching a safety program can be challenging, but we’re here to help.Free webinarsPolicyholders can attend free safety webinars each month to learn about workplacesafety issues, OSHA compliance, safe driving and more. To register, visit the Trainingand Education tab at texasmutual.com.Safety professionalsWe employ more than 30 safety professionals across the state who averageapproximately 20 years of experience. They conduct about 8,500 on-sitepolicyholder visits per year, which is more than any other company. The Employer’s Guide to Workers’ Comp 5

Texas Mutual Insurance Company 6TexasMutual.comTexas Mutual policyholders have exclusive access to thousands of free safety materialsin the Safety Resource Center at texasmutual.com. Policyholders can visit the resourcecenter to:XXWatch online safety videosXXIdentify and correct the root causes of workplace accidentsXXGet DVDs, videos, brochures and other safety training materials. Many of thematerials are also available in SpanishXXFind out how much money accidents cost their businessTexasMutual.com/blogThe Texas Mutual blog is a valuable resource for information about workplaceaccident trends, practical ideas for creating safe work environments, industry newsand much more.WorkSafeTexas.comAnyone can visit worksafetexas.com for free workplace safety materials ontopics such as ergonomics, distracted driving, teen workers, aging workersand return-to-work programs.SafeHandTexas.orgTraffic incidents are the leading causes of work-related fatalities. Texas Mutualdeveloped this free site to teach employers and their workers how to stay safebehind the wheel.TexasOilAndGasSafety.comThis website is dedicated to keeping oil and gas workers safe. The website featuressafety information and educational resources that oil and gas workers and employerscan use to stay safe on the job.

Launch a return-to-work processAn experienced worker is a valuable part of your team. The quicker they recover andreturn to work, the more you’ll save.What’s in it for you?XX Lower claim costsXXControl your premium by improving your loss historyXXRetain experienced workers: the cost of replacing an injured employee can be 50 to150 percent of the employee’s salaryXXReduce the costs of making up for lost production, such as hiring extra help orpaying overtimeWhat’s in it for your employees?XX Steer clear of the stress and depression that often come with being unableto workXXRetain their job skills, company benefits and seniorityXXMaintain their pre-injury income: remember, workers’ compensation benefitspay only a portion of the injured employee’s salaryXXAvoid the disability mindset of “I’m injured, and I cannot work”More informationVisit texasmutual.com/safety/safety.shtm to download our free Return-to-Work Kit.More information about return to work is available through the Texas Department ofInsurance at www.tdi.texas.gov/wc/rtw/.7 The Employer’s Guide to Workers’ CompTexas Mutual encourages employers to launch a return-to-work process to reducethe costs of workplace injuries. The goal of the process is to help injured workersrecover and return to productive employment as soon as medically reasonable.

Fight fraudTexas Mutual Insurance Company 8Workers’ compensation fraud costs consumers like you 7.2 billion a year.Texas Mutual Insurance Company works hard to protect our policyholders’ premiumdollars. Our three teams of experienced, full-time investigators get results, but theyneed your help.If you identify two or more of these indicators in a Texas Mutual claim, contact usimmediately at (800) 488-4488 or by email at fraudstoppers@texasmutual.com:XXTip from a credible sourceXXNew or disgruntled workerXXNo witness to alleged injuryXXInconsistent or illogical description of incidentXXHard to contact injured workerXXInjured worker acts upset when contactedXXSuspicious injury on Monday or FridayMore informationVisit texasmutual.com/fraud/fightfraud.shtm to read our fraud-fighting success stories,learn more about our FraudStoppersSM cash reward program and download a freeFraudStoppersSM poster.If you suspect fraud against an insurance carrier other than Texas Mutual,email the Texas Department of Insurance at fraudunit@tdi.texas.gov, call(888) 327-8818 or visit www.tdi.texas.gov/fraud/onlinereport.html.

Find a PharmacyWe work with numerous pharmacies across the state, but some pharmacies may notaccept workers’ compensation claim prescriptions or may only accept cases from asmall number of insurance companies. Save Time With Texas Mutual OnlineWe want to help you spend less time on workers’ compensation and more timefocusing on your business. Texas Mutual online services make it easy and convenientfor policyholders to:XXSubmit direct-draft paymentsXXSign up to receive alerts about significant changes in existing claimsXXImprove workplace safetyXXReport workplace injuriesXXReview claim detailsXXCreate loss run reportsXXFile interim payroll reports and make online payments The Employer’s Guide to Workers’ CompTo help ensure your injured workers get the prescriptions they need for theircompensable work-related injuries and to save you money, we partnered withOptum pharmacy account network. To find a network pharmacy near you,go to optum.com, call the Optum help desk at (888) 220-2805, ordownload the Texas Mutual app for Apple or Android devices.9