What is worker’s compensation self-insurance?

An employee who suffers a workplace or work-related injury or illness may file a workers’ compensation claim for wage compensation, medical benefits, and if necessary, disability benefits. Worker’s compensation is the exclusive remedy of relief for an employee for an job-related injury or illness under New Jersey law. The employer covers the injured or ill employees wages and benefits throughs its workers’ compensation insurance. Once the employee gives the employer notice of a job injury or illness, the employer or the employer’s insurance provider reviews the claim. If the claim is approved, the worker’s compensation insurance pays the appropriate compensation to the employee.

Under New Jersey law, employer must carry workers’ compensation insurance that specifically provides insurance coverage of their employees for workplace or work-related accidents, injuries, and illnesses. State law gives employers four options for workers’ compensation insurance coverage: 1) an insurance policy through an insurance agency; 2) coverage directly from a private insurance carrier; 3) insurance from the State Worker Insurance Fund or 4) self-insurance status. An employer must obtain approval from the New Jersey Department of Labor and Workforce Development to self-insure their employees. When an employer has self-insurance status, it has the direct responsibility for payment of liability and compensation for an employee’s work-related injury or illness.