Which best defines a monopolistic state in the context of workers' compensation?

Which best defines a monopolistic state in the context of workers' compensation?

• A. A state where employers must carry WC through private insurers
• B. An optional WC state with no requirements
• C. A state where the employer can purchase WC only from the state
• D. A state with no WC obligations

Answer: (C)

In a monopolistic state, the state runs the workers’ compensation program and is the sole source of coverage for employers. Private insurers cannot issue WC policies in that state, so employers are required to obtain coverage only from the state fund. That’s why the best description is that an employer can purchase workers’ compensation only from the state. The other scenarios describe arrangements where private carriers are involved or where coverage isn’t required, which doesn’t fit a monopolistic setup.

In a monopolistic state, the state runs the workers’ compensation program and is the sole source of coverage for employers. Private insurers cannot issue WC policies in that state, so employers are required to obtain coverage only from the state fund.

That’s why the best description is that an employer can purchase workers’ compensation only from the state. The other scenarios describe arrangements where private carriers are involved or where coverage isn’t required, which doesn’t fit a monopolistic setup.