Does Your Employer Use State or Self-Insured Workers’ Compensation Insurance? Find Out If it Matters

Workers' Compensation SystemsOhio state law requires most employers to carry workers’ compensation insurance. This insurance pays medical bills and disability compensation for employees who are injured or fall ill on the job. It may also provide benefits for the surviving family members of workers who die because of a work-related injury. Ohio operates the largest state workers’ compensation insurance program in the country, but also allows certain employers to self-insure rather than purchase insurance from the state. So, what does this mean? What does it mean for Ohio workers who find themselves in need of workers’ compensation benefits?

Defining State and Self Workers’ Compensation Insurance in Ohio

Most Ohio businesses must have insurance to aid injured workers with payment of medical bills and wage replacement. When an employee is injured or falls ill at work, he may have benefits that can aid his recovery and financial security. The two options for that insurance in Ohio are:

  • State insurance – Ohio has a constitutionally established state insurance fund known as the Bureau of Workers’ Compensation (BWC). The BWC insures about 244,000 employers. Employers pay premiums to the BWC, which pays injured employees’ medical bills and wage replacement costs. Workers file claims with the state Bureau of Workers’ Compensation (BWC) to obtain these benefits, and the BWC manages their care.
  • Self-insurance – Some large Ohio businesses elect to insure themselves. This means they are directly responsible for paying the medical bills and wage replacement costs for their injured employees. Injured workers file a claim directly with the employer, and the employer pays the benefits out of its own funds. With self-insured employers, the BWC does not pay the claims, but oversees them.

Ohio Self-Insured Employers Are Still Accountable to the State

The state must permit to an employer to be self-insured, and the BWC assists with accountability going forward. This helps ensure that employees can obtain the injury benefits they deserve. To be self-insured in Ohio, the state requires an employer to meet certain criteria, including:

  • Have at least 500 employees working in Ohio
  • Operate in Ohio at least two years
  • Actively participate in the state insurance fund
  • Provide five years of financial statements
  • Provide an appropriate organizational plan for the administration of workers’ compensation claims

Employers may want to pursue this option to satisfy their workers’ compensation requirements as it can provide significant cost-saving benefits, and they only have to pay when an injury is sustained. There can be higher risks, though, as they still have to cover the same benefits that the state system offers.

What Do the Systems Mean for Injured Ohio Workers?

For practical purposes for Ohio workers, there is little difference between state insured and self-insured employers. The systems are similar—after an injury, a worker must report the injury and file a workers’ compensation claim. The claim is reviewed and either approved or denied. If an employee is unhappy with the determination, he may appeal the decision. Even in the state-funded system, employees are encouraged to resolve any disputes with the employer directly before pursuing more official avenues.  

And the BWC offers some oversight for self-insured employers. Employees who feel that their self-insured employer is not appropriately handling their claim can file a complaint with the BWC. The state also maintains a fund (supported by an assessment to self-insured employers) to aid injured workers whose employers default on their workers’ compensation obligations. Employers in either insurance situation are barred from forcing employees to share the costs of workers’ compensation.

Regardless of which system an employer utilizes, injured workers in Ohio have rights to medical care and compensation. If you or someone you love has suffered a work-related injury, the experienced workers’ compensation legal team at Monast Law Firm is here to help. Call our Upper Arlington office today to speak with a member of our team and schedule a free, no-obligation consultation.


James Monast
Fighting for Ohio’s Injured Workers and their Families