Individual Self-Insurance

Self-insurance on an individual basis allows for a large employer to retain the risk of its workers’ compensation liability. Self-insurance involves administration, record keeping, and appropriate funding of losses.

What is Individual Self-Insurance?

Self-insurance on an individual basis allows for a large employer to retain the risk of its workers’ compensation liability. The employer is financially liable for the administration and payment of all workers’ compensation benefits to its injured workers. There is no insurance company that assumes the responsibility of paying benefits to the employer’s injured employees. An employer who believes it can safely absorb this financial risk can apply to the Division of Workers’ Compensation for self-insurance authority. The Division can grant approval to an employer to operate as a self-insured employer if it meets the requirements set forth in the regulations. Self-insurance involves administration, safety, record keeping, appropriate funding of losses, and filing the necessary reports with the Division as indicated in 8 CSR 50-3.010, Rules Governing Self-Insurance.

Self-Insured Employers: Responsible for Paying SIF Surcharge

The Second Injury Fund (SIF) is funded through a surcharge on employers’ workers’ compensation net deposits, net premiums or net assessments and net premium equivalent for individual self-insured employers. Each year by October 31, the Director of the Division of Workers’ Compensation estimates the benefits payable from the Second Injury Fund during the following calendar year in order to set the surcharge rate. The rate is based on a statutory formula to generate 110% of the moneys to be paid from the Second Injury Fund in the following calendar year less any moneys contained in the fund at the end of the previous calendar year. The rate has been capped at 3 percent.

The surcharge is collected quarterly from insurance companies and self-insurers. In order to satisfy your obligation under Section 287.715 RSMo, employers/group trusts that have been authorized to self-insure in Missouri need to register with the SIF Surcharge Unit by sending an e-mail to or by calling 573-526-5756.

Read more about how to pay your surcharge

Self-Insured Employers: Responsible for WC Tax

The Division of Workers’ Compensation is funded through the Workers’ Compensation Administrative Tax (WC Tax)/ Workers’ Compensation Administrative Surcharge (Admin Surcharge). Pursuant to Section 287.690 RSMo and Section 287.710 RSMo, the WC Tax is a tax based upon the net deposits, net premiums or net assessments received, whether in cash or notes in this state, or on account of business done in this state by workers' compensation insurance companies or is based upon the net premium equivalents for those self-insured employers (individual self-insured employers and group trusts) authorized to self-insure in Missouri.

The rate for the WC Tax and the Admin Surcharge is the same for both and is set each year by October 31 by the Director of the Division of Workers’ Compensation. The WC Tax rate can vary between 0% and 2%; however, it is based on the funding needs of the Division and is calculated using the formula in the statute.

Each year, the authorized self-insured employers and group trusts file an annual report by March 1 (Table 1 Payroll and Premium Tax Report for self-insured employers) with the Missouri Department of Insurance, Financial Institutions and Professional Registration (DIFP). Based on the premium certified by April 30 by the DIFP the Department of Revenue (DOR) assesses the annual WC Tax to the self-insured employers. Any additional annual WC Tax is due to the DOR by June 1.

Self-insured employers are assessed quarterly prepayments by the DOR based on 25% of their prior year direct written workers’ compensation premiums (insurance companies) or premium equivalents (self-insured employers) multiplied by the current year tax rate. These quarterly installments or prepayments are due on March 1, June 1, September 1 and December 1 to the DOR. The March 1 assessment is a blank assessment which is completed by the insurance companies or self-insured employers based on the premiums or premium equivalents they reported on the annual report to the DIFP. The June 1 assessment serves three purposes: (1) it determines the annual tax due/overpayment; (2) it reconciles for the 1st quarterly installment made; and (3) it assesses the quarterly amount due for the 2nd quarter. Any credits that develop due to overpayments of the annual tax are credited against the quarterly amounts due starting with the June quarterly installment.

Each year individual self-insured employers are required to obtain a Missouri only experience modification factor (experience mod) from the National Council on Compensation Insurance (NCCI). To obtain the forms and instructions, contact the NCCI at 800-622-4123. Self-insured employers (excluding group trusts) must submit the original experience mod to Self-Insurance Tax Auditor, Taxation Section at the Missouri Department of Insurance, Financial Institutions and Professional Registration, P.O. Box 690, Jefferson City, MO 65102-0690, with a copy of the experience mod being sent to the Missouri Division of Workers' Compensations Insurance Unit. Group trusts should contact for information on how to submit the group experience modification factors.

Individual self-insured employers will receive their annual administrative tax filing information by e-mail from the DIFP. The Table 1 Payroll and the Premium Tax Reports are to be filed electronically by e-mailing the file to All assessments will be emailed from the DIFP and are due to the DOR with payment by the due dates. Any questions regarding the WC Tax for individual self-insured employers should be directed to

Considerations Before Self-Insuring

  • The employer must be committed to controlling workers’ compensation costs. Self-insurance is a long-term method for funding an employer’s workers’ compensation liability. It may take an employer a few years to realize the benefits of self-insurance.
  • The financial feasibility of self-insuring must be examined. For some employers, self-insurance may be more costly than a traditional workers’ compensation policy.
  • Self-insuring also must fit into the corporate philosophy of the employer. The concept of self-insurance fits well with corporate philosophies willing to assume risk.
  • Employers must consider the types of exposures it has. Some exposures are extremely high risk and better handled through the traditional insurance markets.
  • Safety must be a priority for all employees, including management. Loss-prevention programs, along with high quality case administration, play a significant role in the successful performance of a self-insurance program.

Advantages of Self-Insuring

  • An employer that successfully self-insures has active loss control programs and services. These programs provide employees with safer work environments and help improve the employer’s profits through reduced losses.
  • A self-insured employer hires the third party claims administrator, which may help reduce overall costs of a case.
  • Self-insurance helps an employer stabilize insurance costs. For the most part, the fixed costs associated with self-insurance do not follow the premium ups and downs that can be experienced with traditional insurance.
  • There are potential cost savings associated with self-insuring. An employer who self-insures keeps the underwriting profit that an insurance company would otherwise retain.
  • By self-insuring, an employer can improve its cash flow and realize the time value of money since funds are paid out as bills and benefits payments, instead of a lump sum premium payment.
  • Overall, a self-insured employer has greater control over its workers’ compensation costs and is in a better position to be proactive.

Disadvantages of Self-Insuring

  • Since a self-insured employer retains its workers’ compensation liability, the employer may have to bear the cost of a catastrophic injury or higher-than-expected losses. The employer’s bottom line can be directly affected by a large loss.
  • There is an application process and annual filing requirements contained in the regulations with which each employer wanting to self-insure must comply.
  • Before self-insurance is granted, the self-insured employer must provide security in an amount determined by the Division, but not less than $200,000. The security must be in the form of a surety bond, letter of credit, or the deposit of certain securities in escrow.
  • There may be a loss of tax deductions. An employer that self-insures can only deduct its actual expenses and paid losses. Reserves for future workers’ compensation payments must be listed on the balance sheet as a liability.
  • Exposures outside of Missouri must be insured through a traditional workers’ compensation policy or an acceptable alternative.

Regulatory Requirements

The Division of Workers’ Compensation has the regulatory authority over employers who self-insure their workers’ compensation liability. Self-insured employers must abide by the Rules Governing Self-Insurance found at 8 CSR 50-3.010, which details the requirements for being self-insured. In addition, self-insured employers must comply with the statutory requirements set forth in Chapter 287, Revised Statutes of Missouri. Self-insured employers are required to pay the workers’ compensation tax and Second Injury Fund surcharge, as required of all Missouri employers.

To find out more about individually self-insuring your workers’ compensation liability, call the Missouri Division of Workers’ Compensation, Insurance Unit at 573-526-3692.

How to Apply

Prior to applying, applicants should be familiar with the 8 CSR 50-3.010, Rules Governing Self-Insurance. Upon becoming familiar with these rules, an employer will need to complete the application form found on this Web site and forward it to the Division, accompanied by a $250 non-refundable application fee. The Checklist for Individual Self-Insurance Applications states what should be included with the application. It is best for the applicant to wait until the Division has received their application before scheduling the application meeting. Should you have any questions please contact the Division at 573-526-7955.

Reporting Requirements

General Reporting Requirement: Pursuant to 8 CSR 50-3.010(3)(G)4. The employer shall notify the Division at least 30 days prior to any change in ownership, operations, service company, address, security or any other change that affects the employer’s self-insurance status.

Excess Insurance: Pursuant to 8 CSR 50-3.010(3)(B)(3) each self-insured entity shall provide confirmation of specific excess insurance or aggregate excess insurance, or both types of insurance, issued by an insurance carrier admitted by the Department of Insurance, Financial Institutions and Professional Registration to do business in this state with specified policy limits and retention amounts approved by the Division. The insurance carrier shall be AM Best rated A- or better or shall have reserves acceptable to the department for a new and unrated company. The Statement of Specific and Aggregate Excess Insurance Coverageis the acceptable form for providing confirmation of excess insurance coverage. This form needs to be completed and submitted to the Division, for each legal entity holding self-insurance authority in Missouri, each time the current excess insurance policy expires and either the excess insurance policy is renewed, or a new excess insurance policy is obtained.

Under 8 CSR 50-3.010(3)(G), in order to retain Missouri workers’ compensation self-insurance authority; each self-insured entity is required to submit annual reports within 90 days of the end of the calendar year. Failure to complete and execute each report fully and accurately by the due date can result in the termination or revocation of a company’s self-insurance authority. Separate reports must be filed for each legal entity holding self-insurance authority in Missouri. If your company was granted Missouri self-insurance authority on or after October 1 of the reporting year, you are not required to file annual reports for that year. Your first annual reports will be for the following year and due within 90 days of the end of the calendar year. If an employer terminates its self-insurance authority during the reporting year, all annual reports must be filed as per the regulations. The terminated self-insured employer, also referred to as the “withdrawing member” in Section 287.860 RSMo must continue to meet the requirements of Section 287.280 RSMo and 8 CSR 50-3.010 with respect to claims incurred while the withdrawing member was self-insured. The Statement of Outstanding LossesAnnual Financial Statement, and the Individual Self Insured Employer Information Sheet are required to be submitted until the Statement of Outstanding Losses shows that all cases are closed with no outstanding liability. The withdrawing member shall also provide the Division with an actuarial opinion as indicated in Section 287.860, RSMo.
Related Link: Annual Reports Helpful Hints

Will I be Subject to Audits?

Yes, the Division has the authority to conduct claims, safety, and any other audit deemed necessary and appropriate by the Division. The Division performs four different types of audits: compliance audits, reserve audits, complaint audits, and safety audits.

Compliance Audits are random or specific audits that provide the Division with information on how your workers’ compensation program processes injured employee’s cases and whether the process is in compliance with the Missouri Statues, rules and regulations.

Reserve Audits are generated to determine if the self-insurer has sufficient amount of security based on their claim exposure with the state of Missouri.

Complaint Audits are generated if the Division receives repeated complaints on the same issue or receives a complaint that is indicative of non-compliance issues.

Safety Audits are conducted to review all written safety and health programs as well as the credentials and experience of loss control and safety personnel, the structure of, and resources available to the loss control or safety department, and to provide an on-site audit of the implementation of the employers’ safety program.

How Do I Obtain a Listing of Individual Self-Insured Companies?

The Division has listings of individual self-insured companies and group trusts in Missouri. Anyone interested in obtaining the listings should contact the Division at 573-526-3692. A formal written request and payment may be required. It can be sent to the following address:

Division of Workers’ Compensation
Attn: Insurance Unit
P.O. Box 58
Jefferson City, MO 65102-0058
Telephone: 573-526-3692

Annual Reports Helpful Hints

The original signed and notarized (if required) forms must be mailed to the Division of Workers' Compensation within 90 days of the end of the calendar yearIncomplete or unsigned forms will be returned as a non-filing. Any filing extension requests must be received by the Division in writing prior to the due date.


Attn: Insurance Unit
3315 W. Truman Blvd.
P.O. Box 58
Jefferson City, Missouri 65102-0058

*Please note that the highlighted areas on the forms are areas that MUST be completed.

Table 1- Payroll and Premium Tax Report

Submit a copy of your Table 1 – Payroll & Premium Tax Report that is filed with the Missouri Department of Commerce and Insurance. Please note that the original Table 1 report must be filed with the DIFP along with an original Missouri experience modification factor, for the reporting year. For example, for reports due March 1, the effective date of the experience modification factor should be for the previous year.

NCCI Experience Modification Rating

Submit a full copy of the Missouri only experience modification factor for the reporting year for each entity holding authority. If a self-insured employer does not qualify for a Missouri experience rating but continues to maintain their self-insurance authority, a letter must be obtained from the National Council on Compensation Insurance (NCCI) confirming the use of a 1.0 experience modification factor and submitted in lieu of the experience modification factor. The experience modification factor must be in the name of the entity-holding authority and not the parent company. To obtain a Missouri experience modification factor, you must submit an ERM-6 annually to the NCCI. If you have questions regarding obtaining an experience mod call 800-622-4123.

DISCLAIMER - More Information

The Employers, Insurers, TPAs section of the Workers' Compensation portion of this web site is targeted specifically to employers, insurers and third party administrators and is intended to be a resource throughout the workers' compensation claim process. It is NOT intended to be a substitute for legal representation.

Injured workers seeking information about the workers' compensation process should use the Injured Workers section of the Workers' Compensation web site to find information targeted specifically to them.

Additional information about Missouri Workers' Compensation laws, the Division of Workers Compensation, the Second Injury Fund and more may be found via the Workers' Compensation home page.