Workers’ Compensation Dividend Program For Landscape Contractors in Texas

The Texas Department of Insurance allows employers with similar businesses to form purchasing groups to save on their workers’ compensation premiums and to promote safety in the workplaces. The Texas Green Industry formed a purchasing group for workers’ compensation in February 2004. Texas Mutual is the insurance company underwriting the group. The first dividend was paid in 2005. The dividend was $72,519. The dividend for 2009 was just announced November 19, 2009. The dividend was $760,070. Due to increased participation by eligible employers, the dividend has grown over 100% in just 5 years. Texas Mutual Insurance Company is the leading writer of group purchase programs in Texas.

By joining a purchasing group in Texas, the employer gets the premium discount for the premium volume of the whole group, not just his/her own premium. The premium discount for The Texas Green Industry for 2009 was 10.9%. Combining this discount and then participating in a work comp health care network can achieve substantial savings. The work comp health care network savings is an additional 12%. The employer then is eligible for a dividend based on his/her own experience and another dividend based on the experience of the group as a whole. The combination of all these discounts can reduce the employer’s standard workers’ compensation premium over 30 to 40%. Texas employers will retain their own workers’ compensation experience modifier. In addition to landscape contractors, The Texas Green Industry Workers’ Compensation Group Purchasing Program is open to qualifying wholesale and retail nurseries. Irrigation contractors and other green industry businesses may also qualify. The qualifying class codes for the Texas Green Industry group are: 0005, 0035, 0042, 5183, 8017, 8018, and 9014.

Code 0042 is the workers’ compensation code for landscape contractors. This code is considered a construction classification, and includes planting trees, shrubs, plants or flowers, as well as planting or sodding grass for lawns or commercial landscapes. A landscape contractor my also perform lawn maintenance services. Those payrolls are rated separately under code 9014, Lawn Maintenance – By Contract.

In addition to dividends and premium discounts, Texas Mutual assigns a loss prevention consultant to the group. The Texas Green Industry has a consultant that is an expert in the group’s common operations. All members of the group adopt a Safety Manual – written exclusively for Texas Green Industry policyholders that includes workers’ safety programs, guidelines on how to implement a safety plan plus loss control engineering provided by Texas Mutual. All of this is at no additional cost to the employer.