Every state has its own way of running its workers’ compensation insurance system. Four in particular―North Dakota, Ohio, Washington, and Wyoming―are monopolistic workers’ compensation states because they do not allow business owners to purchase coverage from private carriers. Instead, employers must get workers’ compensation insurance from the state.
What Is a Monopolistic State?
A monopolistic state requires employers to either buy workers’ compensation insurance from a state-run fund or to self-insure. Because it’s the only option for buying a policy, the state fund has a monopoly. This is different from competitive state funds that compete for business against private carriers.
Currently, there are only four monopolistic workers’ compensation states: North Dakota, Ohio, Washington, and Wyoming. All the others allow business owners to buy policies from workers’ compensation insurance companies.
North Dakota Workers’ Compensation
Requirements |
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State Fund Information | Workforce Safety & Insurance 1600 E Century Ave Ste 1 PO Box 5585 Bismarck ND 58506-5585 Phone: 701-328-3800 |
Average Cost for Workers’ Compensation Insurance | $1.28 per $100 of covered wages1 |
Is Self-insurance Allowed? | No |
Ohio Workers’ Compensation
Requirements |
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State Fund Information | |
Average Cost for Workers’ Compensation Insurance | 67 cents per $100 of covered wages1 |
Is Self-insurance Allowed? | Yes. Employers must have had a policy through the state fund for at least two years and demonstrate the financial and administrative ability to handle claims. |
Get additional details in Ohio Workers’ Compensation Insurance: Rules and Coverage.
Washington Workers’ Compensation
Requirements |
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State Fund Information | Washington State Department of Labor and Industries PO Box 44000 Olympia, WA 98504-4000 Switchboard: 360-902-5800 |
Average Cost for Workers’ Compensation Insurance | $1.57 per $100 of covered wages1 |
Is Self-insurance Allowed? | Yes. Employers must have been in business for three years and possess at least $25 million in assets. |
For more details, see Washington Workers’ Compensation Insurance: Laws, Rules & More.
Wyoming Workers’ Compensation
Requirements |
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State Fund Information | Wyoming Workers’ Safety and Compensation Division 1510 E. Pershing Blvd. Cheyenne, WY 82002 Phone: 307-777-7441 |
Average Cost for Workers’ Compensation Insurance | $1.70 per $100 of covered wages1 |
Is Self-insurance Allowed? | No |
Read more in our Wyoming Workers’ Compensation Insurance guide.
Key Concerns for Employers in Monopolistic States
Workers’ compensation insurance in monopolistic states covers most of the more common situations business owners face, namely their employees’ work-related injuries and occupational diseases. However, employers can have additional concerns related to workers’ compensation coverage.
Stop Gap Coverage
Workers’ compensation insurance comes in two parts. The first is the part everyone knows that pays for an injured employee’s lost wages and medical bills. The second part, however, is called employer’s liability insurance, and it covers a business owner’s legal costs if an employee claims his or her injuries were the result of your negligence.
None of the monopolistic states include employer’s liability in their workers’ comp plans, so business owners have a gap in their coverage. To protect themselves fully, they need to get stop gap coverage. Most do this with an endorsement to their general liability insurance, which they buy through a private insurance carrier.
Employees in Other States
Workers’ compensation can get complicated when you have employees located in other states. The easiest situation to describe is an out-of-state business owner with employees in one of the workers’ compensation monopolistic states. In that case, you most likely need a policy from that state’s workers’ comp fund.
However, what if your employees only travel to a monopolistic state temporarily? Is your business is located in a monopolistic state, but your employee is injured in another? Each state can have its own way of determining which employees are covered by their workers’ compensation requirements, so it’s a good idea to look into the laws in your home state and the states where your employees go. ‘
1National Academy of Social Insurance. Workers’ Compensation: Benefits, Costs, and Coverage
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