June 9, 2023Compliance

Understanding workers compensation in monopolistic states

Workers compensation is a form of insurance that provides financial benefits and medical care to employees who suffer work-related injuries or illnesses. Every state in the U.S. has its own workers compensation system, but in a handful of states, there is a unique system known as monopolistic state.

What does it mean to be a monopolistic state for workers compensation?

These states operate their own workers compensation insurance program and do not allow private insurers to participate in the market. If you are responsible for managing employee benefits and risk management in a monopolistic state, it’s important to have a thorough understanding of how the system works and what it entails. This post explores what you need to know about workers compensation in monopolistic states.

Defining workers compensation

Workers compensation is a form of insurance coverage that provides medical treatment, disability benefits, and lost-wage compensation to employees who suffer work-related injuries or illnesses. It is a no-fault system, which means that employees do not have to prove that their employer was responsible for their injury or illness in order to receive benefits. Instead, employees are provided benefits as long as the injury occurred within the scope of the employee’s job responsibilities.

What’s unique about monopolistic states?

There are four states in the U.S. that operate under monopolistic state laws: North Dakota, Ohio, Washington and Wyoming.

Each of these states has created its own workers compensation insurance program that is run by the state government, rather than being privatized. As a result, private insurance companies are not allowed to provide coverage for workers compensation in these states.

The coverage requirements for each of the monopolistic states differ, but there are some commonalities. For example, in Ohio, the state’s insurance fund provides coverage for most employees in the state. That includes workers in the private industry as well as public employees. In Washington, the state fund covers employers for all industrial insurance including workers’ compensation and occupational disease. They’re all exclusive statutory insurance, meaning employers in monopolistic states are required by law to obtain their cover from the state-run workers compensation program.

One of the unique aspects of workers compensation in monopolistic states is that the coverage and pricing for this insurance is dictated by the state, and National Council on Compensation Insurance (NCCI) classifications and pricing do not apply. This means that monopolistic state coverages do not follow NCCI rules and regulations. While the intended function is the same across the board, the coverage and details differ from state to state. There is no standardization across monopolistic states, and each has its own governing body responsible for monopolistic workers comp.

Summary and resources

Monopolistic state workers compensation is a government-regulated insurance program that provides benefits to employees who are injured or become ill as a result of work-related activities. It is currently available in four states: North Dakota, Ohio, Washington, and Wyoming. Each state operates its own program, which is different from the rest with unique features and coverages, and private insurers are not allowed. They are governed by their own laws and ratings rules and, thus, operate outside the NCCI rating system. If you are an HR leader or responsible for managing employee benefits, it is crucial to understand the system and coverage requirements in order to ensure that your employees are properly protected in case of work-related accidents or illnesses.

Below are helpful links to resources by state:

North Dakota




Having the right payroll software can ensure your workers compensation policies are always in compliance. If you’re looking for payroll that’s easy and gets workers paid faster, let’s talk