Employee Benefits

Types of Workers' Compensation Plans

Depending on your state's workers' compensation laws, the size and type of your business, and other factors, you may have several types of workers' comp plans to choose from. Examples:

  • Private Insurance. Several private insurance companies may offer workers' compensation plans to businesses in your state. Companies price insurance at different rates and charge premiums, much like health insurance. Under some plans, employees may be required to use doctors and other providers that are in the plan's network.
  • State Insurance. Many states operate a state-run workers' compensation plan and risk pool, which may either compete with or work in partnership with private insurers.
  • Self Insurance. In some states, employers are allowed to shoulder workers' compensation risks and provide a self-funded plan. Self-insured employers pay workers' compensation claim costs out of their own pockets instead of paying premiums to an insurance carrier.

Note: Workers' compensation insurance costs may be higher if you work in a business that carries a high risk of accidents or illness, such as manufacturing, construction, or transportation of hazardous materials.

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