What key feature distinguishes monopolistic workers’ compensation states from competitive ones?

The key feature that distinguishes monopolistic workers’ compensation states from competitive ones is that, in monopolistic states, coverage must be sourced directly from the state program. This means that employers are required to purchase workers’ compensation insurance exclusively from a state-run fund, rather than having the option to select from various private insurers.

This unique characteristic ensures that the state can control the pricing and distribution of workers’ compensation insurance to provide consistent coverage across all employers within its jurisdiction. Unlike competitive states, where employers can shop around for the best private insurance rates and options, monopolistic states centralize the provision of workers’ compensation insurance, effectively removing competition among private insurers in that sphere.

Understanding this distinction is crucial for adjusters and other professionals dealing with workers' compensation, as it influences how claims are managed, and how employers navigate their insurance requirements within different states.