Which states do not require employers to carry workers' compensation insurance?

• A. New Jersey and Texas
• B. New Jersey and California
• C. Texas and California
• D. New Jersey and New York

Answer: (A)

The concept being tested is that workers’ compensation requirements aren’t the same in every state; some states don’t require blanket coverage for all employers because of exemptions or opt-out provisions.

Texas is the classic example of a state that does not require employers to carry workers’ compensation coverage at all. Employers in Texas can choose to carry coverage or rely on other means for worker protection, so there isn’t a universal mandate.

New Jersey adds another layer: the law allows certain categories of employers or individuals to be exempt from coverage. In particular, corporate officers can elect to exclude themselves from workers’ comp coverage, meaning an employer won’t be required to carry it for those excluded individuals.

So the pair that reflects states with no universal requirement for all employers to carry workers’ comp—whether due to an overall opt-out (Texas) or specific exemptions (New Jersey)—is the one listed. The other states in the choices have mandatory coverage for most employers and employees.