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Bill

SB 264

Relating to discontinuing group self-insurance coverage and dissolving the Texas self-insurance group guaranty fund and trust fund under the Texas Workers' Compensation Act.

89th Legislature (2025) Introduced by Angie Button and 1 co-sponsor

Texas eliminates the self-insurance group guaranty fund, removing financial protection for workers' compensation claims when employer groups become insolvent, effective September 1, 2025.

Effective on 9/1/25
#guarantyfundboardofdirectors(vw9li) #insurance #commissionerof(v0396) #labor--workers'compensation(i0470)
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Bill Summary · SB 264

Legislative bill overview

SB 264 eliminates the Texas self-insurance group guaranty fund and trust fund, which previously provided financial protection for workers' compensation claims when self-insured employer groups became insolvent. The bill discontinues group self-insurance coverage under the Texas Workers' Compensation Act and dissolves the associated guarantee mechanisms, effective September 1, 2025.

Why is this important

This change affects thousands of Texas employers who participate in self-insurance groups—pooled arrangements allowing businesses to self-fund workers' compensation coverage rather than purchase traditional insurance. The elimination of the guaranty fund removes a safety net that protected injured workers' claims if their employer group failed financially, potentially shifting risk away from employers and toward injured workers or the state.

Potential points of contention

  • Worker protection concerns: Injured workers in failed self-insurance groups may lack recourse for unpaid claims if no guaranty fund exists to cover shortfalls
  • Small business impact: Smaller employers relying on group self-insurance may face higher costs or limited coverage options after transitioning to traditional insurance
  • Transition logistics: Companies currently in self-insurance groups must restructure their coverage arrangements within the implementation timeline, creating operational and financial uncertainty

Compiled from official sources — confirm details with the bill’s official record.

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