Monopolistic Workers' Compensation States

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	All employers must insure all full-time, part-time, seasonal, and occasional workers before they begin working. Some employees are exempt from coverage like domestic workers, farm and ranch laborers, and an employer’s children under the age of 22.
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	Business owners with one or more employees must carry workers’ compensation insurance. Employers and employees whose religion prohibits the payment and acceptance of insurance benefits may apply for an exemption.
State Fund Information	Bureau of Workers’ Compensation 30 W. Spring St. Columbus, OH 43215-2256 Phone: 800-644-6292
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	All employers with one or more employees must have workers’ compensation insurance. Some exemptions include certain domestic workers and musicians or entertainers at specific events.
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	Most employers must carry workers’ compensation insurance. Some employees are exempt, such as domestic workers and farm employees.
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

Monopolistic Workers’ Compensation States