Self-Insured Employer Counseling And Case Resolution

Can Employers Self-insure For Workers’ Compensation In California?

Yes, employers in California are allowed to self-insure their workers. According to the California Department of Industrial Relations, there are approximately 2.2 million California workers covered by self-insured employers. However, if you are considering doing this as an employer, there are various requirements in place. It is strongly suggested that you work with a skilled workers compensation defense attorney to ensure you go through this process appropriately.

Those who wish to self-insure their workers’ compensation liabilities will need to apply to the Office of Self-Insurance Plans (OSIP) for approval. Any organization wishing to self-insure employees must meet the following requirements:

• Three calendar years in business in a legally authorized business form
• Three years of employer defense and independently audited financial statements
• Acceptable credit rating for three full calendar years (for those that do not meet the credit standards, it may be possible to provide a security deposit as collateral)

Employers that self-insure employees are required to provide the same scope of benefits as an insurance company. New self-insurers in California will be required to use a licensed third party administrator during the first three years of their self-insurance. Self-insurers will still be subject to audits by the Division of Workers’ Compensation.

At Sacks Law Group, APC, our attorneys have extensive experience helping employers with all workers’ compensation matters. We understand that it is a serious violation to not have proper coverage for employees. Not only will an employer face significant financial penalties for failing to provide appropriate workers’ compensation insurance, but they could also face criminal penalties.

Our attorneys will also be able to assist in resolving any workers’ compensation insurance disputes that arise for self-insured entities. Because we understand the law and the requirements, we are well-suited to get you through any dispute that needs resolution.