Who is responsible for paying Workers' Compensation benefits?

A: All non-federal employers are required to purchase Workers' Compensation insurance from an insurance carrier to protect its employees. State laws vary somewhat; however, in general, small companies with less than three or four employees are not required to purchase Workers' Compensation insurance, while larger companies may "self-insure," acting as their own insurance company. When a worker is injured, he or she files a claim with the insurance carrier or self-insured employer and is paid benefits based upon a state-approved formula.