Self insured workers compensation is a setup where your employer pays injured workers’ benefits from its own money instead of buying a policy from an insurance company. The state must approve the employer first. The employer then handles claims itself or hires a company to do it. If you are hurt at a self-insured employer, you still have the same basic rights as any other worker in your state. This guide explains what the term means and what to do when you hear it.
What Self Insured Workers Compensation Means
Most employers buy workers’ comp coverage from an insurance company. Large employers sometimes choose another path. They ask the state for permission to cover their own claims. This is called self insured workers compensation. Big companies, cities, counties, school districts, and state agencies often use it. They have enough money and enough workers to predict their costs.
However, self-insurance is not a free pass. In most cases, the state checks the employer’s finances before approval. The employer typically must post a security deposit, such as a bond or letter of credit. As a result, there is money set aside if the employer goes out of business. Many states also run a guaranty fund that steps in if a self-insured employer fails. The Insurance Information Institute describes self-insurance as a common option for large employers.
How Self Insured Workers Compensation Works in a Real Claim
The day you get hurt looks the same as any claim. You report the injury to your supervisor. You get medical care. Then a claims adjuster reviews your case. The difference is who that adjuster works for. With self insured workers compensation, the adjuster works for your employer directly. Or the adjuster works for a third-party administrator, often called a TPA, that your employer hired.
For example, say you work at a large hospital system and hurt your back lifting a patient. You report it the same day. A week later, you get a letter from a company you have never heard of. That company is the hospital’s TPA. It is not an insurance company, but it manages your claim. It approves treatment, pays wage-loss checks, and may later talk about a settlement.
This can feel confusing. Some workers worry that their employer controls everything. That worry is understandable. However, state law still sets your benefit amounts and deadlines. A self-insured employer must follow the same rules as an insurer. If they deny your claim or cut your checks, you can typically appeal to your state workers’ comp board.
How It Varies by State
Nearly every state allows some form of self insured workers compensation. Each state has its own office that approves and monitors self-insured employers. In California, the Office of Self-Insurance Plans oversees them. In New York, the New York Workers’ Compensation Board runs a self-insurance office. In Texas, the Texas Department of Insurance, Division of Workers’ Compensation certifies self-insurers. Texas is also unusual because some employers can opt out of the system entirely. Those “non-subscribers” are not the same as self-insured employers.
A few states run a state-only insurance fund. Ohio and Washington are examples. Even there, large employers may qualify to self-insure. North Dakota and Wyoming generally do not allow private self-insurance for workers’ comp. In every state, your filing deadlines stay the same whether your employer is insured or self-insured. The table below shows key deadlines in several states. Federal workers fall under a separate program run by the U.S. Department of Labor.
| State | Who oversees self-insured employers | Notice to employer | Deadline to file a claim |
|---|---|---|---|
| California | DIR Office of Self-Insurance Plans | 30 days | 1 year from injury (in most cases) |
| New York | Workers’ Compensation Board, Self-Insurance Office | 30 days | 2 years from injury |
| Texas | TDI Division of Workers’ Compensation | 30 days | 1 year from injury |
| Pennsylvania | Bureau of Workers’ Compensation, Self-Insurance Division | 120 days | 3 years from injury |
| Ohio | Bureau of Workers’ Compensation (self-insured department) | As soon as possible | 1 year from injury |
What to Do When You Hear This Term
First, take a breath. Self insured workers compensation does not mean you have fewer rights. Ask your employer or HR for the name of the claims administrator. Write down the claim number. Keep copies of every letter, medical note, and pay stub. Report your injury in writing, even if you already told your supervisor out loud. Typically, written notice protects you if there is a dispute later.
Next, check whether your employer is truly self-insured. Your state board can usually confirm this. Many boards have an online coverage lookup tool. If your claim is denied or delayed, you may be entitled to a hearing. Any settlement estimates you see online are illustrative only, and every case is different. Confirm figures and deadlines with your state board and a licensed attorney. For other terms you may run into, see our workers’ comp glossary.
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Frequently Asked Questions
Do I get lower benefits if my employer is self-insured?
No, not under state law. Self insured workers compensation employers must pay the same benefit rates as insured employers. Your state’s weekly cap and benefit formulas still apply.
What happens if a self-insured employer goes bankrupt?
In most cases, the state uses the employer’s posted bond or security to keep paying claims. Many states also have a self-insurer guaranty fund. Contact your state board right away if your checks stop.
Can I sue my self-insured employer instead of filing a comp claim?
Generally, no. Workers’ comp is usually the only remedy against your employer, whether insured or self-insured. There are narrow exceptions, so talk to a licensed attorney about your situation.
Self insured workers compensation: Quick Recap
If you remember one thing about self insured workers compensation, make it this: the rule is set by the state (or the federal program), not by the insurer, and the official source is linked above. Every figure on this page about self insured workers compensation should be confirmed with the agency before you act on it.
Questions about self insured workers compensation that this page does not answer are usually answered for free by the state workers’ comp agency’s information line — and, for a disputed claim, by a licensed attorney in a first consultation.
See your state’s exact numbers
What you are owed depends on your state’s benefit caps and deadlines. Start with your state’s settlement and claim guides for the exact figures.
Sources & How to Verify
The figures on this page come from official government and industry sources. Workers’ comp benefit caps, deadlines, and rules change, so always confirm the exact figure with your state’s workers’ comp board or a licensed attorney before acting. Settlement estimates are illustrative, and every case is different.
- Your state workers’ comp board, division, or commission: the official source for your state’s exact caps, deadlines, and forms — search “[your state] workers compensation board”
- U.S. Department of Labor (OWCP): dol.gov — federal workers’ compensation overview
- NCCI: ncci.com — workers’ comp rating and benefit data
- Social Security Administration: ssa.gov — benefit-cap and SSDI offset data
- Insurance Information Institute: iii.org — neutral workers’ comp background
Content last reviewed October 2026. If you notice an outdated figure, please contact us.
Related Guides
- Workers Comp Settlements by State (All 50)
- Workers Comp Claims by State (All 50)
- More in This Category
- Settlements by Injury
- Benefits Explained
- Workers Comp Glossary
Informational only — not legal, medical, or financial advice. Workers Comp Explained is an independent educational resource, not a law firm, insurer, or medical or financial advisor, and this page does not provide legal, medical, or financial advice. Workers’ compensation benefits, deadlines, and rules vary by state and change over time, and settlement estimates are illustrative only. Always confirm the exact figure and any deadline with your state’s workers’ compensation board and a licensed attorney before you act.