What term describes states that allow private insurers to offer workers' comp coverage as an alternative to the state workers' comp fund?

The correct answer is competitive. This term refers to a system where private insurers can provide workers' compensation coverage as an alternative option to the state-run workers' compensation fund. In competitive states, employers have the flexibility to choose their coverage from private insurers, promoting a market where different insurance providers can offer various plans and rates. This can enhance competition, potentially resulting in better coverage options and pricing for employers, as they can shop around for policies that best meet their needs.

The term 'voluntary' does appear in some contexts regarding workers' compensation insurance; however, it typically refers to situations where participation in a workers' comp system is not mandatory for employers, rather than describing the state allowing private insurers to compete with the state fund. The other options, such as 'balanced' and 'exclusive,' do not accurately describe this particular situation regarding the ability for private insurers to participate alongside a state fund.