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Workers’ compensation insurance glossary

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The Texas Department of Insurance, Division of Workers’ Compensation (DWC) created this plain language glossary for your general use. Please see the Texas Labor Code if you need an exact definition of a workers’ compensation term.

Spanish glossary/glosario en español

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Act – A set of Texas workers’ compensation laws created to protect both the employer and the employee.

Act of God – An event that happens from natural causes with no human involvement and that could not have been predicted or prevented. Examples are floods, lightning, and earthquakes.

Adjuster – A person who works for the insurance carrier to determine if the insurance carrier is responsible for the claim and then pays benefits if they are due.

Administrative review – When an agency considers the outcome of a dispute. For instance, the DWC Appeals Panel reviews an administrative law judge’s decision. Judicial review is when a court considers the DWC Appeals Panel’s decision.

Adverse determination – When a utilization review agent finds that the health care services provided or prescribed for an injured employee are not medically necessary or are experimental or investigational.

Agent – A person who sells and services insurance policies. Agents must get a license from the Texas Department of Insurance (TDI) to sell insurance in Texas.

Agent’s license – A certificate of authority from the state, which allows an agent to do business.

Agreement (in workers’ compensation) – A legal contract. An agreement exists when one party makes an offer, and the other party accepts it. Parties must write agreements on DWC Form-024, Benefit Dispute Agreement, and sign it. Certain DWC staff, such as a benefit review officer or an administrative law judge, must also approve and sign the agreement. It can also be stated on the record in a contested case hearing.

Annuity – An amount of money paid yearly or in a series of payments. An agreement by an insurer to make regular payments for the life of the injured employee or to their beneficiary for a certain period.

Appeal – A party’s right to take their case to a higher level for review if they get a decision they disagree with during the DWC’s dispute resolution process.  

Average weekly wage  The average amount of money your employer paid you each week in the 13 weeks before your injury or illness.


Balance billing – When a doctor or hospital bills the injured employee for the difference between what they were charged for services and the amount insurance paid. For example, if the medical fee is $100 and insurance only pays $70, a provider may try to bill an injured employee for the remaining $30. Billing injured employees for medical services is not allowed in the Texas workers’ compensation system.

Benefit review conference – An informal meeting with the parties and a DWC benefit review officer to talk about claim disputes.

Benefits (in workers’ compensation) – Income payments or medical care paid to an injured employee through an employer’s insurance policy.

Beneficiary – A person who is able to get or is getting benefits under an employer’s workers’ compensation insurance policy after the death of an injured employee.


Case management – The process of coordinating medical services to treat an injured employee to improve care and reduce costs.

Case manager – A person, usually an experienced professional, who coordinates necessary health care services for an injured employee.

Catastrophic event – An event that cannot reasonably be controlled or avoided and that interrupts submitting or processing claims for more than two business days in a row.

Certified network (workers’ compensation) – A TDI-certified health care delivery system made up of physicians and providers who are on contract to deliver necessary medical and health care services to injured employees.

Certified self-insurer – A private employer who is approved for a certificate of authority to insure its own workers’ compensation claims.

Certificate of authority – This gives an insurer the power to write insurance contracts in Texas. DWC issues this certificate to private employers that want to insure their own workers’ compensation claims. This could also be a document showing the powers that an insurance carrier grants to its agents.

Claim – A demand for benefits or a report of a workplace injury. It can be filed by or on behalf of the injured employee.

Claimant – The person seeking payment of benefits.

Claimed injury – The work-related injury, disease, or illness for which the employee is claiming workers’ compensation benefits from the insurance carrier.

Classification – A group of employees insured by a workers’ compensation policy who have the same general job characteristics and risk. These groups help an insurance carrier determine a company’s insurance rates.

Compensable injury – An injury or illness that happened while the injured employee was performing duties related to their employment (see course and scope).

Complaint – A written statement claiming a workers’ compensation law or rule has been violated.

Concurrent review – A review to determine if current or previously authorized health care is medically necessary.

Contested case hearing (CCH) – This hearing is usually scheduled when disputes cannot be resolved at a more informal meeting (benefit review conference). During this hearing, parties offer evidence about disputed issues before a DWC administrative law judge (ALJ). The ALJ listens as each party explains its side of the case and then decides each issue.

Contested case hearing decision – After a contested case hearing, a DWC administrative law judge will issue a written decision. The decision will have findings of fact and conclusions of law that resolve the disputed issue or issues. The decision includes whether benefits are due.

Contributing injury – A past work injury to the same body part as the current injury. There must be medical proof of an impairment (lasting harm) from the past work injury that continues to affect the injured employee.

Contribution – The insurance carrier can ask DWC to reduce the amount of certain benefits they pay an injured employee if there was a past work-related injury to the same body part. DWC may allow this only if the insurance carrier can show the past work injury still causes impairment or lasting harm (contributing injury).

Course and scope – An injury that happens while an employee is doing activities related to the business of their employer and while furthering the interests of their employer.

Coverage verification – A way to find out if an employer had workers’ compensation insurance coverage on a certain date using the “verify coverage” link on the TDI website.


Date of service – The date a service is provided; by a healthcare provider or an attorney.

Death benefits Benefit payments that help families replace some of the money lost when an employee dies from a work-related injury or illness.

Delegation – The process of appointing a person or a group to take certain actions on behalf of another.

Designated doctor – A doctor or health care provider selected and trained by DWC to resolve questions about an injured employee's medical condition or dispute about a work-related injury or illness. 

Disability – An employee may have a disability if their work-related injury keeps them from earning what they were paid in the 13 weeks before they were hurt. In workers’ compensation, disability means a loss of income from a job, not a physical or mental condition.

Direct result – This is one of the requirements for supplemental income benefits. To meet this requirement, an injured employee must show that the work-related injury was serious, had lasting effects (impairment), and keeps them from doing the work they did at the time of their injury.

Dispute – A disagreement between parties in a workers’ compensation claim. Most disputes are about whether an injured employee can get medical or income benefits and the amount to be paid.

Documentary evidence – Anything you want the DWC administrative law judge to considered at your hearing. This can include written documents such as reports from expert witnesses, medical records, written witness statements, employer records, DWC forms, and police reports. It can also include photos, recordings, and electronic files.

DWCThe Texas Department of Insurance, Division of Workers’ Compensation. DWC oversees the administration and operation of the Texas workers’ compensation system. 


Electronic Data Interchange (EDI) – A process that allows a party to securely send information to another party electronically rather than with paper. Workers’ compensation insurance carriers in Texas must report claim, medical, and proof of insurance coverage data to DWC using EDI.

Emergency care – Medical or behavioral health services provided in a hospital or similar facility. This includes severe pain that, if left untreated, could place a person’s health in danger, impair bodily functions, or cause serious disfigurement, and for a pregnant woman, harm the health of the unborn child.

Exceptions to liability – Reasons that allow the insurance carrier to dispute the injured employee’s claim. An exception could be a work injury that was not reported or filed on time, or events leading up to an injury such as intoxication, horseplay, or injuries that happen off duty.

Exchange Information that all parties must share before a benefit review conference or hearing.

Existence, duration, or extent of disability  These are some of the more common disputes in workers’ compensation. There may be a dispute about whether a disability exists (existence), the period of disability (duration), or whether the disability is related to the compensable injury (extent of disability).

Expedited – To make an action or process happen more quickly.

Experience – The amount of workers’ compensation claims (losses) an employer has.

Experience modification – The percentage increase or decrease in insurance premiums an employer pays depending on their amount of loss.

Experience rating – A way of adjusting the workers’ compensation insurance premium for a specific risk, by comparing losses of an insured party with the average losses for employers in a similar industry.

Expert witness – A person who, because of education, training, or experience, has special knowledge of a subject that the average person does not.

Extent of injury – The medical conditions that are part of an injured employee’s work-related injury.


Facility-based provider – A physician or provider who treats patients of a health care facility, such as an orthopedic surgeon, physical therapist, physician’s assistant, or emergency room physician.

Formulary – A list of prescription drugs, both generic and name brand. These drugs are listed as pre-approved, not approved, or require authorization before they can be given out.

First responder – Employees such as peace officers, paramedics, firefighters, detention officers, county jailers, or emergency medical services staff, who work for a political subdivision in Texas, like a city, county, or school district. Volunteer first responders should ask their manager if they have workers’ compensation.

Fringe benefits – Wages paid to an employee beyond their annual salary, such as health insurance, car allowance, or dry cleaning.


Geographic service area – An area where health care benefits are available and accessible if injured employees live or work within that area. If an employer is part of a workers’ compensation network, an injured employee who lives in the network’s service area must get health care services from a doctor or hospital in that service area.

Good cause – A legal term that means there was a good reason to take, or not take, a certain action.


Health care facility – A hospital, emergency clinic, outpatient clinic, or other facility that provides health care.

Health care practitioner – A person licensed to provide health care, or a person without a license, providing health care under the supervision of a doctor.

Health care provider – Either a health care facility or health care practitioner.

Health Insurance Portability and Accountability Act of 1996 – This Act, also known as HIPAA, required the Department of Health and Human Services to create national standards for electronic health care transactions and national I.D. numbers for providers, health plans, and employers. It also addresses the security and privacy of health data.


Impairment income benefits (IIBs) – Payments an injured employee may be able to get if they have a work-related injury or illness that affects their body as a whole. The amount of IIBs an injured employee can get is based on an impairment rating that is assigned by a health care provider.

Impairment rating  A rating that shows what percent the work-related injury affects your body as a whole.

Independent review organization (in workers’ compensation) – An organization that the insurance commissioner certifies to review workers’ compensation cases. This review determines whether health care services provided to or proposed for an injured employee are medically necessary and appropriate.

Injured employee – A person hurt while doing activities related to the business of their employer.

Insurance carrier – Could be an insurance company, a certified self-insurer, a certified self-insurance group, or a government entity that self-insures. An insurance carrier contracts with an employer to provide medical and income benefits to an injured employee if they are hurt or get sick at work.

Interlocutory order request – In workers’ compensation, a request from a party to pay or to stop paying medical or income benefits until there is a final decision about a dispute from a DWC contested case hearing. This is usually requested during a benefit review conference.

International Association of Industrial Accident Boards and Commissions (IAIABC) – An organization that workers’ compensation commissioners and agency heads from the United States and other counties govern. The organization provides data collection standards and analysis to promote uniform data collection, monitors workers’ compensation policies, and develops model laws for state legislatures to enact.

Interrogatories – Questions used during discovery before a DWC hearing to get written responses from the other party. There are questions an injured employee can send to the insurance carrier and questions an insurance carrier can send to the injured employee.


Judicial review – When a party goes through the DWC dispute resolution process (an administrative review) and still disagrees with the decision about their benefits, they may appeal the decision to another level such as a district court for judicial review.

Justified complaints – A valid concern about an activity that violates a policy, contract, rule, or statute. Something that a person with average knowledge of medicine and health would think is below the standards they would expect of a business or medical practice.


Large group employer – A person or organization that employed at least 51 eligible employees during the previous calendar year and that employs at least two employees on the first day of the plan year.

Lifetime income benefits (LIBs) – An injured employee may be able to get these benefits for certain severe injuries. LIBs are paid for the life of the employee.

Letter of clarification – Letter that an insurance carrier, injured employee, or their representative sends to DWC asking for more information about a designated doctor’s report. The designated doctor will get this letter only if DWC approves the request.


Malinger – When an injured employee pretends to be sick or have an injury worse than it is to collect benefits longer than necessary.

Maximum medical improvement  When no further healing or recovery from an injury can be expected.

Medicaid – A state and federally funded health care coverage program for eligible residents of the state. The Texas Health and Human Services Commission manages and monitors the Medicaid program.

Medical Fee Dispute Resolution – An area of DWC that resolves disputes about fees health care providers charge the insurance carrier to treat an employee’s work-related injury.

Medical necessity – Health care services or supplies needed to prevent, diagnose, or treat an injury, illness, condition, disease, or its symptoms and that meet accepted standards of medicine.

Medically necessary – A service or treatment that, if not done, could negatively affect the patient’s condition.

Misrepresentation – Oral or written statements that do not truly reflect the facts either by a person applying for insurance or by an insurance carrier about the terms or benefits of a policy.

Multiple employment – When an employee is not able to work because of their injury and had more than one job at the time they were hurt. The insurance carrier can include the average weekly wages from these other employers when determining income benefits owed.


National Association of Insurance Commissioners (NAIC) – An organization that insurance commissioners from all 50 states govern. NAIC provides data and analysis to promote uniform insurance regulation, monitors insurance financial health, and develops model laws for state legislatures to enact.

National Council on Compensation Insurance (NCCI) – An association of insurers selling workers’ compensation coverage and operating as a rating organization. NCCI collects statistics, develops rates and policy forms, and makes state filings for its members. NCCI collects proof of coverage information from insurance carriers for DWC.

National Provider Identifier (NPI) – A unique I.D. number that all health care providers are required to have and use on all health care forms. A provider can apply for an NPI number at the Centers for Medicaid and Medicare Services.

Network (in workers' compensation) – Doctors or providers who have contracts with an insurance carrier to treat injured employees of an employer who chooses to use a health care network. A workers' compensation health care network must be certified according to Texas Insurance Code Chapter 1305, Texas Administrative Code Chapter 10, and other rules..

Non-network (in workers' compensation) – Medical services provided to an injured employee when the employer has chosen not to use a network. Services in a non-network are provided, billed, and reimbursed according to the Texas Labor Code and TDI rules.

Non-pecuniary wages - Wages that are not paid in money, such as health insurance premiums, a vehicle or housing allowance, or clothing.

Non-subscriber – Employers that do not provide workers' compensation coverage to their employees.

Notice of denial – (in compensability disputes) Insurance carriers send this letter to an injured employee or their beneficiaries to let them know they are not going to pay benefits on their claim.

Notice of continuing investigation – A letter insurance carriers must use to let an injured employee or beneficiary and DWC know that they are still looking into whether the claim is presumed to be work-related under Government Code Chapter 607.

Notice of network requirements – Information from the employer that tells employees what to do if they are hurt at work. An employer who has workers’ compensation coverage through a network must give employees information such as how to contact the network and how to get emergency care.


Occupational disease – Sickness or disease that happens while an injured employee is performing duties related to their employment (course and scope).

Occupational hazard – A workplace condition that increases the risk of an injury or illness.

Office of Injured Employee Counsel (OIEC)An agency apart from DWC that helps injured employees with their workers' compensation disputes.

OIEC ombudsman – A specially-trained OIEC employee who can help an injured employee for free if they have a dispute about their workers' compensation claim and do not have an attorney.

Official Disability Guidelines – A database of recommendations that health care providers use to decide the best treatment for an injured employee and when they can safely return to work.

Over the counter drugs – A drug you can buy without a prescription.

Out-of-network – A physician, health care provider, or hospital that is not under contract with a health maintenance organization, preferred provider organization, or workers’ compensation network.


Parent company – The senior company in a group of insurers or other businesses.

Pecuniary wages - Wages paid in money, such as salary, commissions, and bonuses. Wages include all forms of payment for a given period. Pecuniary wages include the market value of room and board, laundry, fuel, and any other benefit that can be estimated in money.

Peer review – A review of health care from a person who has medical training equal to that of the employees who provided the treatment.

Performance based oversight assessment – The Texas Labor Code requires DWC to measure the performance of insurance carriers and health care providers in the Texas workers’ compensation system every two years. Based on the results, they are placed into poor, average, and high performing tiers.

Permanent impairment – Lasting damage to an injured employee from a work-related injury. Injured employees who have permanent damage from an injury and get an impairment rating from a doctor may be able to get impairment income benefits.

Pertinent information Information that the party asking for a benefit review conference must provide to all parties to help resolve the dispute. Examples may include witness statements, police reports, or medical records.

Plain language – Language you understand the first time you read or hear it. Federal agencies must use plain language, and Texas insurance carriers must write health insurance policies and contracts in ways that people can easily understand.

Policy – The written contract between an insurer and a policyholder that outlines the claims the insurer legally must pay.

Political subdivision – A local government, such as a county, city, school district, or housing authority that provides workers’ compensation coverage to their employees through a self-insurance pool.

Preauthorization – The process of asking the insurance carrier to approve a specific treatment or service before it is provided.

Precertification authorization – A way to control costs by requiring doctors to submit a treatment plan and an estimated bill before providing treatment. This allows the insurer to determine if procedures are appropriate. It also lets the insured and the doctor know which procedures the insurance carrier will cover and at what rate.

Pre-existing condition – A health condition that was present before an injury.

Premium – The price of insurance protection for a specific risk over a certain period.


Quality improvement – A program that examines, monitors, and revises processes and systems to improve the functions of an insurance carrier or health care network.


Reconsideration – A request to an insurance carrier or health care network to review its denial of medical services or income payments (adverse determination). This request comes from an injured employee or from a health care provider on behalf of an injured employee.

Referrals (in network) – A request from a primary care physician or treating doctor that allows the patient to get care from a specialist or other provider within the network’s geographic service area.

Referrals (out-of-network) – A request from a physician or provider to allow an injured employee to get health care services outside their geographic service area when care is not available in the network.

Remand – When the DWC Appeals Panel sends a case back to a contested case hearing for more action.

Representative – A person, including an attorney who helps an injured employee, beneficiary, or insurance carrier when there is a dispute about payment of benefits.

Required medical exam – DWC orders injured employees to get this exam at the request of an insurance carrier when there are questions about whether the injured employee’s health care was appropriate or when they disagree about the designated doctor’s report on the injury.

Retrospective review – A review of whether health care services were medically necessary and appropriate after the services are complete.

Rules – DWC's statements of law or policy, generally published in Texas Administrative Code Title 28, Part 2.


Seasonal employee – Employees who work to meet an employer’s temporary needs during certain times of the year.

Secure File Transfer Protocol (SFTP) – A secure, electronic way to send documents to DWC.

Self-insured governmental entity – State, county, and local entities, such as the state of Texas, Travis County, or the City of Austin, that must self-insure their employees for workers’ compensation.

Self-funded/self-insured benefit plans – A benefit plan an employer may provide as an alternative to workers’ compensation. The employer arranges and pays claims from its employees or others enrolled in the plan.

Showing good cause – To prove or explain why you had a good reason to take, or not take, a certain action.

Small group employer – A person or entity who had an average of at least two employees but not more than 50 eligible employees during the prior calendar year and who employs at least two employees on the first day of the policy year.

Solvency – Having the financial assets required to conduct insurance business and take care of liabilities.

Statewide average weekly wage – The average of wages paid to workers in Texas for a set period. The Texas Workforce Commission calculates this amount each year. This amount is used to set the minimum and maximum amounts of workers' compensation benefits that an injured employee will be able to get.

Statement – Written, spoken, or recorded facts or information that may be signed or approved by the person who provided it.

Statutory – Something required by statute. Texas workers' compensation statutes are in Texas Labor Code, Title 5. Workers' Compensation.

Statutory maximum medical improvement – When an injured employee reaches the end of the 104 weeks of temporary income benefits allowed by law. This date is based on when the employee first began losing wages from their injury (disability).

Subscriber – Employers that provide workers’ compensation benefits to their employees.

Subrogation – The right of an insurance carrier who pays a workers’ compensation claim to take over the person’s right to pursue remedies against a third party.

Subsequent Injury Fund – DWC administers this fund to encourage employers to hire employees with pre-existing conditions. If an employee gets a new injury while at work, the fund can help pay a portion of lifetime income benefits they might be due.

Supplemental income benefits (SIBs) – Income benefits that the insurance carrier pays to an injured employee after their impairment income benefits end. Unlike with other income benefits, an injured employee must apply for SIBs, have an impairment rating of 15% or more, and complete certain work search requirements.


Temporary income benefits (TIBs) – An injured employee may be able to get TIBs if a work-related injury or illness causes them to lose some or all of their wages for more than seven days.

Third party administrator – A company that collects insurance premiums, contributions, or adjusts claims for an insurance carrier.

Treating doctor – The physician who provides primary care and treatment to an injured employee and refers injured employees to specialists to treat their work-related injury or illness.


Unjustified complaint – A concern where there is no apparent violation of a policy, contract, rule, law, or service that is below the standards you would expect of a business or medical practice.

Underwriter – A person trained to evaluate risks involved and determine rates and coverages for an insurance carrier.

Underwriting – The process of selecting risks for insurance and classifying them by their degree of insurability so that insurance carriers can assign the appropriate rates. The process also includes rejecting risks that do not qualify for insurance.

Utilization review – A process that insurers and employers use to monitor the quality of health care and how appropriate and necessary it is, to try and reduce costs.

Utilization review agent (URA) – A person or organization that reviews how medically necessary and appropriate health care services are before, during, or after services are provided.

Utilization management – A process to determine whether various health care services are necessary and appropriate.


Wage – Income and anything else of value that is paid to an employee for their services. This could include things like a car allowance, dry cleaning, or meals.

Wage statement – When an employee is hurt at work, the employer must fill out the DWC Form-003 – Employer’s Wage Statement. This form shows the average amount of money they paid the employee each week in the 13 weeks before they were hurt and is used by the insurance carrier to determine the amount of benefits due.

Workers’ compensationInsurance coverage that provides income and medical benefits to employees who have a work-related injury or illness. Texas employers are not required to provide workers' compensation insurance coverage, but most do. Your employer must have workers' compensation insurance coverage for you to get benefits.


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Last updated: 2/8/2024