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Montana business insurance: requirements and costs

Montana has no headcount threshold for workers' compensation: an employer with any employee must be bound by plan No. 1 (self-insurance), No. 2 (a private insurer) or No. 3 (the Montana State Fund).⁠1 The State Fund is a nonprofit public corporation that must insure any employer that requests coverage, so no Montana employer is shut out of the market.⁠5 Montana's 2023 comp cost per $100 of covered wages was $1.385 by NASI's estimate, about 41% above the $0.983 national figure by our calculation.⁠9

Checked against 11 sources Last reviewed How we check figures

Montana at a glance

Workers’ comp required1+ employee; sole proprietors and working partners exempt unless they elect
Where employers buy itPrivate insurers and a competitive state fund (Montana State Fund)
Rates set byNational Council on Compensation Insurance
Employer comp cost, 2023$1.39 per $100 of covered wages (US $0.98)
Comp rate index, 2024$1.34, ranked 14 of 51 (1 = most expensive)
Employer health premium, 2025$8,899 single, $21,989 family (average total premium)
Auto liability minimum25/50/20

Workers' comp in Montana is a competitive market with a public carrier in it. Employers may buy from a private insurer (plan No. 2), self-insure after proving solvency to the Department of Labor & Industry and the Montana self-insurers guaranty fund (plan No. 1), or buy from the Montana State Fund (plan No. 3).⁠1⁠6 The State Fund may refuse an applicant only if the employer or its principals defaulted on a State Fund obligation that remains unpaid.⁠5 We could not retrieve an official decision for the latest State Fund or NCCI Montana rate change, so this page gives none; ask the carrier for the rate effective at your renewal and your class.

The cost data place Montana above average but falling. NASI estimates employers spent $1.385 per $100 of covered wages in 2023, against $1.751 in 2019. By our calculation that is a 21% drop, compared with 16% nationally ($1.174 to $0.983).⁠9 Oregon's 2024 ranking, built from manual rates in effect January 1, 2024, puts Montana 14th most expensive of 51 jurisdictions at an index of $1.34 per $100 of payroll, 122% of the median state (Georgia, $1.09).⁠10 The two measures differ: NASI measures what employers actually paid, and Oregon's index prices the same 50 classes in every state, so neither is your rate. Health coverage is closer to the national picture. In AHRQ's 2025 survey, 32.2% of Montana private-sector establishments in firms with fewer than 50 employees offered insurance, against 32.1% nationally. Their average single premium was $9,049 against $9,034, though the employee share, $1,799 against $1,924, was lower.⁠11

The employer mandate reaches further than many owners expect. Exempt categories include household and casual employment, a tax-dependent family member, a spouse for whom the employer claims a marital exemption, and corporate officers who meet the ownership tests; sole proprietors and working partners are outside the Act unless they elect in.⁠1 Anyone who regularly works away from their own fixed business location, however, must either be covered personally or hold an independent contractor exemption certificate (ICEC), which requires a sworn statement of freedom from control and an independently established business.⁠1⁠3 Hiring a contractor does not shift the risk by itself: if you contract out work that is a regular or recurrent part of your trade and the contractor lacks compliant coverage, you owe its employees' benefits.⁠2 Failing to insure can cost twice the premium plan No. 3 would have charged on your Montana payroll for the uninsured periods in the past three years, or $200 if greater.⁠4 On the auto side, the statute sets liability limits of 25/50/20 and we found no PIP requirement in the statute.⁠7

Workers’ compensation in Montana

Every employer with any employee under a contract of hire, oral or written, must be bound by compensation plan No. 1, 2 or 3.⁠1 Persons who regularly work away from their own fixed business location must elect personal coverage or hold an independent contractor exemption certificate.⁠1⁠3

Who is exempt

  • Household or domestic employment and casual employment
  • A dependent family member of the employer for whom a federal tax exemption may be claimed, and a spouse for whom a marital-status exemption may be claimed
  • Sole proprietors, working members of partnerships and LLPs, and working members of member-managed LLCs, who may elect coverage; in construction they must elect coverage or hold an ICEC
  • Real estate, securities and insurance salespeople paid solely by commission with no guaranteed minimum, and direct sellers under 26 U.S.C. 3508
  • Corporate officers and manager-managed LLC managers who meet the ownership or no-pay tests in 39-71-401(2)(r), including holders of 10% or more of the company; they may elect coverage
  • Cosmetologists and barbers as referred to in 39-71-401(2)(l), ordained ministers, and members of religious orders
  • Holders of an independent contractor exemption certificate
  • Musicians performing under a written contract and athletes on contact-sport teams

Buying coverage and who sets the rates

Buy from a private insurer (plan No. 2), self-insure under plan No. 1, or buy from the Montana State Fund (plan No. 3), which must insure any employer that requests coverage unless the employer defaulted on a State Fund obligation.⁠1⁠5

An employer may elect plan No. 1 by giving the Department of Labor & Industry and the Montana self-insurers guaranty fund satisfactory proof of solvency and ability to pay all liabilities reasonably likely to arise in the election year.⁠6

Penalties for going without

The department may require an uninsured employer to pay the Uninsured Employers' Fund up to double the premium it would have paid on its Montana payroll under plan No. 3, or $200, whichever is greater, assessed on the past three years of payroll for the periods the employer was uninsured. A late payment of a penalty adds a $50 fee.⁠4 An employer who purposely or knowingly fails to post the department's workers' comp notice is fined $50 per citation.⁠1

What Montana employers pay

Employer workers’ compensation costs per $100 of covered wages, 2019–2023
YearMontanaUnited States
2019$1.75$1.17
2020$1.61$1.08
2021$1.48$1.01
2022$1.40$1.00
2023$1.39$0.98

Employer cost per $100 of covered wages: premiums paid by insured employers plus benefits and administrative costs of self-insured employers, divided by the wages of workers covered by workers’ compensation. The United States figure is NASI’s national total, which includes federal programs. Source: National Academy of Social Insurance (NASI), published 11 Aug 2026.

Oregon’s biennial comparison of workers’ comp rates puts Montana’s index for rates in effect on 1 January 2024 at $1.34 per $100 of payroll, 22% above the national median of $1.09 (rank 14 of 51, where 1 is the most expensive). The index prices the same 50 risk classes, weighted by Oregon payroll, in every state, so it compares rate levels rather than what employers actually pay. Compare every state.

Employer health insurance in Montana

Average annual premium per enrolled employee at private-sector employers, 2025
MeasureMontanaFirms under 50United States
Single coverage, total premium$8,899$9,049$9,025
Family coverage, total premium$21,989$20,292$26,281
Employee share, single$1,493–$1,817
Employers offering coverage44.1%32.2%49.2%

Average total annual premium per enrolled employee at private-sector establishments that offer health insurance; the offer rate is the share of establishments offering coverage. Small firms have fewer than 50 employees. Source: Agency for Healthcare Research and Quality (AHRQ), Center for Financing, Access and Cost Trends, 2025 survey year. All states.

Commercial auto in Montana

Every vehicle registered in Montana, including business vehicles, must carry at least 25/50/20 in liability limits (bodily injury per person / per accident / property damage, in thousands of dollars). Official source.

MCA 61-6-103 sets minimum liability limits of $25,000 for one person's bodily injury or death, $50,000 for two or more persons and $20,000 for property damage per accident. The 2025 code text we read contains no PIP requirement, and we found no change to these limits in 2025-2026. We did not research separate limits for trucks or for-hire vehicles.⁠7

Trucks and buses used in interstate commerce must also meet federal minimums of $750,000 to $5 million: see commercial auto minimums and what commercial auto costs.

Other Montana rules that affect insurance costs

You owe an uninsured contractor's workers

If you contract with an independent contractor for work of a kind that is a regular or recurrent part of your trade or business, you are liable for benefits to the contractor's employees when the contractor has not complied with the coverage requirements. An insurer that pays can recover from the contractor.⁠2 Ask for proof of a policy or a current ICEC before work starts.

Independent contractor exemption certificates

A sole proprietor or working partner who regularly works at locations other than their own fixed business site must hold an ICEC or be covered personally. To get one the applicant swears to freedom from control over their own services and to an independently established trade or business, and the department can require supporting documents.⁠1⁠3 A holder is not required to buy a personal policy, and may still buy one and, with the insurer's permission, elect coverage.⁠1⁠3

Insurer of last resort

The Montana State Fund is a nonprofit, independent public corporation that must insure any employer requesting coverage. It may refuse only if the employer or its principals defaulted on a State Fund obligation that remains unsatisfied.⁠5 Plan No. 3 premium is also the yardstick for the uninsured-employer penalty.⁠4

Montana compared with its neighbors

Workers’ comp and health insurance costs, Montana and neighboring states
Montana$1.39$1.34$8,899
Idaho$1.34$1.10$8,770
Wyoming$1.57$1.41$8,997
South Dakota$0.88$1.13$8,985
North Dakota$0.81$0.50$9,318

Sources

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National figures: NASI (employer comp costs), Oregon DCBS (rate index), AHRQ MEPS-IC (health premiums).

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Other states

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