The Texas Division of Workers’ Compensation closed its informal comment window today, August 13, 2026, on a draft rule that would replace the AMA Guides Fourth Edition (1993) with the Sixth Edition (2024) for all impairment exams conducted on or after January 1, 2028. A TDI study published in April 2026 quantifies what that shift means: average impairment ratings (IRs) fall from 5.4% to 3.8% across 363 claims sampled from 2022, and projected system-wide impairment income benefits drop by $42.83 million, or 31%.
For self-insured Texas employers, those figures are not a policy debate. They are a reserve assumption that requires revisiting before the rulemaking concludes.
Who it affects
Self-insured Texas employers carry the most direct exposure. Texas uses a scheduled indemnity structure: impairment income benefits (IIBs) are calculated as a direct function of the assigned IR percentage, so a 30% average rating reduction produces roughly proportional cuts in projected IIB cash flows.
The secondary effect is larger in dollar terms. Of the 500 employees in the study population who qualified for supplemental income benefits (SIBs) under the Fourth Edition’s 15% IR threshold, approximately half would drop below that threshold under the Sixth Edition, eliminating an estimated $185,250 per week in ongoing system-wide costs.
Spine claims warrant special attention: the TDI study found average IRs for spinal cases fell from 5.1% to 2.6%, a 49% compression. Employers with heavy back-injury frequency will see the sharpest shift in their indemnity tails.
Reserve mechanism
The exam-date trigger creates the actuarial complication. The proposed rule applies only to exams conducted on or after January 1, 2028. Claims already rated under the Fourth Edition stay grandfathered. Claims that have not yet reached maximum medical improvement (MMI) as of that date will receive a Sixth Edition rating instead.
This produces a mixed-edition cohort problem for any open-claims reserve straddling 2027 and 2028. Long-tail injuries, including spinal cases and occupational disease, are most affected because MMI can arrive years after the accident date. If your actuary applies a single expected IIB severity factor across all open claims, that assumption overstates cost for the post-2028 cohort while correctly projecting the pre-2028 cohort.
Tail factor selection runs in the same direction: a shorter average benefit payment compresses the indemnity development triangle, and reserve redundancy can build in the years following the switch if benchmarks are not updated. The Workers’ Compensation IBNR methodology overview explains how scheduled-benefit changes flow through a development analysis. The Bornhuetter-Ferguson method guide covers how to revise the a priori expected loss assumption when the benefit rulebook changes mid-development.
What this means for your next review
Three questions to bring to your actuary before the next reserve study:
- Are open claims segmented by anticipated MMI date, with a lower IIB severity assumption for the post-January 2028 cohort?
- Which open claims sit near the 15% IR threshold? Reserve sensitivity at that margin is disproportionately large because SIB eligibility is binary.
- For future accident years, does the a priori expected IIB severity carry a downward trend beginning in 2028, and at what development age does that assumption phase in?
Watch for the formal proposed rule in the Texas Register, anticipated late 2026 or early 2027. That filing opens a second public comment period and will confirm or revise the January 2028 exam-date trigger, giving self-insured employers a firmer timeline for resetting reserve assumptions.