Who Pays for Workers’ Compensation Benefits?

Employers are generally required to pay for workers’ compensation benefits for their employees through self-insurance or by paying premiums to private insurance companies. While there are some exceptions, most employers carry workers’ compensation insurance as a type of business insurance. Learning who pays for workers’ compensation can help you understand how the system works and what you can expect from the process, which may increase your likelihood of securing the benefits to which you’re entitled. 

Who Pays for Workers’ Compensation Benefits?

Employers pay for workers’ compensation benefits for injured workers in one of three ways. Some states have state-run insurance funds for workers’ compensation. In other states, employers purchase private workers’ compensation insurance policies to provide coverage for their employees. Finally, large corporations may self-insure, which means that they are allowed to not carry workers’ compensation insurance because they have substantial assets that allow them to pay for their employees’ injuries in work-related accidents. In both Arkansas and Oklahoma, employers that are required to participate in the workers’ compensation system either carry insurance from private companies or self-insure.

Private Workers’ Compensation Insurance Companies

In Arkansas, employers with three or more employees are required to carry workers’ compensation insurance if an exception does not apply. Employers cannot deduct any portion of the premiums that they pay for workers’ compensation insurance from their employees’ paychecks. Employees do not pay for workers’ compensation insurance.

In Oklahoma, all employers who have at least one worker must carry workers’ compensation insurance if an exception does not apply. Employers choose policies from private insurers operating in the state. Like in Arkansas, Oklahoma employers are not allowed to deduct any portion of the cost of workers’ compensation insurance from their employees’ paychecks.

If you are injured and file a workers’ compensation insurance claim, your benefits will be sent to you by your employer’s private insurance carrier. Employers sometimes fight against workers’ compensation claims because their premiums can be increased when injury claims are approved.


To self-insure in either Oklahoma or Arkansas, employers must be big enough to demonstrate that they have enough assets to pay for their expected liability for workers’ compensation. Employers that want to self-insure must be approved by the state. Many employers that self-insure use third-party administrators, which are companies that handle the paperwork and claims processing for self-insured employers. When someone is injured, the employer sends money for the benefits that are owed to the administrator, and the administrator then disburses the funds to the injured employee.

Hiring an attorney may be especially important if your employer is self-insured. Since self-insured employers have vast resources, they are better positioned to fight against claims.

How Workers’ Compensation Works

The workers’ compensation system is advantageous for both employees and employers. Employees who are injured at work can file claims for benefits without having to prove fault. Employers that carry workers’ compensation insurance cannot be sued for negligence by their injured workers. Since workers’ compensation means that you are giving up your right to sue your employer, consulting with an experienced attorney is important. If your attorney can identify a third party that contributed to your accident and injuries, you may be able to recover damages for the third party’s negligence while also recovering benefits from your employer’s workers’ compensation insurance company. Through workers’ compensation, injured workers may recover money for medical expenses and related costs. They may also receive disability benefits if they are unable to return to their jobs either temporarily or permanently.

Some of the common types of workers’ compensation benefits that you might receive include the following:

  • Medical benefits
  • Rehabilitation costs
  • Temporary partial or total disability benefits
  • Permanent partial or total disability benefits
  • Death benefits

Under the workers’ compensation system, you cannot recover compensation for pain and suffering damages.

Contact the Law Offices of Craig L. Cook

If you have suffered injuries at work, you have rights as an employee. At the Law Offices of Craig L. Cook, we have built a successful record of securing compensation for our clients. Depending on the circumstances of your case, you may be entitled to compensation beyond what you can recover from workers’ compensation. To schedule your free consultation, give us a call at 479-783-8000 or send us a message online.