In most states, workers compensation insurance, a compulsory requirement for employers, is purchased in the private insurance market. Some states however prohibit the sale of workers compensation by private insurers and, instead, require employers to purchase coverage from a government-operated fund.
North Dakota, Ohio, Wyoming, and Washington are the four states with this specific requirement and are referred to as monopolistic states. Below is what you need to know about each state and their government-operated fund.
Workers Compensation in North Dakota
The provider in North Dakota is North Dakota Workforce Safety & Insurance (WSI). Businesses must purchase workers compensation if they employ any personnel to work in the state or send employees to work at a business located there. To purchase a policy, employers must complete an application, which can be done through their website here.
In North Dakota, workers are classified using the state’s own system, which is based on a four-digit code. The rates and classifications are posted to their website. Experience modification applies to employers who meet a certain premium threshold. Those who fall beneath the threshold are ineligible for experience rating and are thus enrolled in the WSI’s small account/debit program, the goal of which is to create incentives for small businesses to manage their claims and implement safety programs. For more details, click here. Self-insurance is not allowed but there is an option for a large deductible plan.
Lastly, the WSI offers a return-to-work program for employees who have been out due to injury. The program’s intent is to get injured employees back to work as soon as possible and includes assistance in medical claim management, vocational case management, as well as assistance for those seeking reemployment.
Workers Compensation in Ohio
In Ohio, businesses employing one or more workers must purchase workers compensation insurance from their state fund, the Ohio Bureau of Workers Compensation (BWC). Employers can apply for coverage in one of two ways:
- Completing an electronic application at the BWCs website here; or
- Mailing a hard copy to the Bureau:
Ohio Bureau of Workers’ Compensation
P.O. Box 15698
Columbus, OH 43215-0698
The BWC determines rates charged. Employers are classified using the NCCI classification system and all employers meeting certain qualifications are entered into the state’s experience rating plan. Each employer’s experience modifier is calculated by the BWC.
To encourage employers to focus on safety, efficiency, cost control and return-to-work, the BWC also offers discount plans. These plans include group experience rating, retrospective rating, and a deductible plan.
Unlike other monopolistic states, Ohio does allow employers to self-insure, contingent on certain eligibility requirements, including financial stability and minimum two-years’ experience with the BWC.
Workers Compensation in Wyoming
Business with workers in Wyoming have to purchase workers compensation insurance from the state fund, the Wyoming Department of Workforce Services (DWS). Registration is required prior to purchase of policy.
Wyoming classifies workers using the North American Industry Classification System (NAICS), which is based on six-digit codes. The DWS is responsible for assigning each employer the appropriate classification. Base rates are listed on the website. Additionally, the DWS calculates experience modifiers for all eligible employers based on experience rating.
Wyoming does not allow for self-insurance, but it does offer a high deductible program for eligible employers. Deductibles range from $1,000 to $100,000.
Workers Compensation in Washington
Businesses that employ any workers in the state of Washington must purchase workers compensation insurance from the Washington State Department of Labor and Industries (L&I).The L&I is also responsible for Washington’s OSHA-approved occupational and safety program.
Business operating in Washington must obtain a business license from the L&I and create an account. Upon review of the application, the L&I determines the correct classification. Washington uses its own classification system based on four-digit codes. Rates can be found on the L&I website. If experience rating applies, the L&I calculate applicable experience modifier.
Washington does not offer a deductible plan for workers compensation but does allow for self-insurance if certain requirements are met.
Stop Gap Coverage
The last thing to note is that the workers compensation policies in monopolistic states do not include employer’s liability. Therefore, businesses must add it under endorsement attached to either a private, multi-state workers compensation policy or a general liability policy. This is referred to as stop-gap coverage.
If you are curious about how this will impact your workers compensation policies, please contact your Sequoia Risk Advisor, or connect with them in HRX.
Disclaimer: This content is intended for informational purposes only and should not be construed as legal, medical or tax advice. It provides general information and is not intended to encompass all compliance and legal obligations that may be applicable. This information and any questions as to your specific circumstances should be reviewed with your respective legal counsel and/or tax advisor as we do not provide legal or tax advice. Please note that this information may be subject to change based on legislative changes. © 2020 Sequoia Benefits & Insurance Services, LLC. All Rights Reserved