Ohio Workers' Compensation Insurance Rates

Recent Changes Impacting Ohio Employers

The payment of Workers’ Compensation premiums threatens the livelihood of many businesses throughout the nation. Unlike regular health-care costs, every employer is required to pick up the tab.

Among the Recent Events that Impact the Rates Paid by Ohio Employers: 

• Ohio BWC Board Decision to Further Reduce Workers' Compensation Group Rating Maximum Discount
  On June 27, 2008, the Ohio BWC board approved a reduction in the maximum group rating discount from 85 percent to 77 percent, beginning July 1, 2009, which will have the effect of increasing workers' compensation premiums for all group-rated employers and some non-group employers.
  
  To soften the blow, the board also approved a 20 percent cap on premium increases in any single year. That means beginning July 1, 2009, most group-rated employers - those receiving the maximum discount - will be assessed a 20 percent increase in premium. Employers currently receiving smaller discounts will see slightly lower increases because they already have been paying higher premiums.
  
  These increases are in addition to the 50 percent increase in premium most group-rated employers will be assessed this month (July 2008), the result of an earlier BWC decision to reduce the maximum group discount from 90 percent to 85 percent.
  
  As a result, beginning July 1, 2009, most group-rated employers will be looking at an 80 percent (or more) increase in workers' compensation premiums since July 1, 2007 (due to compounding).
  
  The Bureau's long-term plan calls for reducing the maximum group rating discount even further, to 65 percent by 2010. For many employers, that would mean a premium rate hike in excess of 100 percent over a three-year period.
  
  While annual increases are capped at 20 percent this year, most group-rated employers can expect further annual increases to continue for the next several years.
  
  
• 2008 MCO Open Enrollment May 5 - 30, 2008
  The 2008 open enrollment period begins 7:30 a.m. May 5 and ends at 5:30 p.m. May 30. Open enrollment gives all state-fund employers (with an active workers' compensation policy) the opportunity to choose the managed care organization (MCO) to help manage the medical portion of their workers' compensation claims. A strong MCO-employer partnership also helps injured workers receive the treatment they need to get back to work as safely and quickly as possible.
  
  Choosing an MCO that meets the needs of your business and your workers is an important decision. To help you make your choice, the BWC will post updated versions of their MCO Selection Guide and MCO Report Card ...
  
  
• Spotting Fraud Red Flags
  A red flag is a warning or a sense that something isn’t right with a claim and should lead one to take a closer look. The BWC has provided lists which will help employers know what to look for when identifying possible fraudulent behaviors. Identification of any one of the following red flags does not mean that fraud exists. However, in order to submit a Fraud Allegation Form to BWC, you need only have a suspicion that fraud may have been committed. Special agents assigned to the BWC special investigations department will carefully collect and analyze the facts to determine whether or not fraud was committed. If you suspect workers’ compensation fraud, submit a Fraud Allegation Form or call 1-800-OHIOBWC, and follow the options. Red flag indicators that may signal fraudulent activity include...
  
  

•  Ohio BWC Board of Directors Approves Five-Percent Rate Reduction Effective July 1, 2008
  The Ohio Bureau of Workers' Compensation (BWC) Board of Directors today unanimously approved a five-percent overall premium rate decrease for private employers. The reduction is the first premium rate decrease for Ohio's private employers since 2001.
  
  "The rate decrease is the result of a consistent reduction of claims and lower medical costs," said BWC Administrator Marsha Ryan. "This rate reduction, along with our efforts to comprehensively improve Ohio's workers' compensation system, provides relief for Ohio's private employers who are striving to remain competitive in a difficult economy.
  
  A BWC actuarial analysis recommended the change to the Private Employer (PA) rate, which will result in an actuarially sound rate level...Read more...
  
  

• 2007 Annual Report
  At the end of 2007, total assets were $22.1 billion, which will cover future costs of 1.5 million open claims. A decision was made by the Oversight Commission that there will be no increase to the average premium rate for 2008. The BWC generated approximately $911 million in investment incomes, which is an increase of $147 million from last year.
  
  Across the Ohio BWC system, trends toward settling claims earlier and at a lower cost are helping to reduce the cost of workers’ compensation claims.
  
  

•  Ohio Bureau of Workers’ Compensation 2007 Decision Regarding Group Rating
  “Ohio’s group-rating program has lacked actuarial soundness since its inception,” per BWC. “The program was designed to allow like businesses to pool their experience and pay lower workers’ compensation premiums. Because the 90-percent discount is so deep, and Ohio’s workers’ compensation system is revenue neutral, the BWC sees non group-rated employers shouldering the additional $200 million needed to subsidize the current 90-percent group discount.”
  
  The BWC Board of Directors made a significant decision to lower the group-rating discount from 90 percent to 85 percent, effective July 1, 2008:
  The reduction is expected to save non-group rated employers approximately $50 million and reduce Ohio’s premium base rate by approximately 2.5 percent. BWC states “Reducing the group discount to 85 percent is a positive first step toward improving the group-rating program and to ensure that all Ohio employers are paying their fair share for workers’ compensation coverage.”
  

• Ohio Bureau of Workers’ Compensation 2007 Commitment to Accountability, Fairness and Improved Services
  Shortly after taking office, Governor Ted Strickland made reformation of BWC’s governance and oversight structure a priority in his fiscal years 2008 and 2009 biennium budget bill (HB 100). That reformation included the creation of the position of deputy inspector general, specifically appointed within the BWC and the Industrial Commission of Ohio (IC). Deputy Inspector General Joe Montgomery began his duties on September 17. His role includes the investigation of wrongful acts or omissions committed by BWC and IC officers and employees.
  
  
• 2006 Annual BWC Report
  States that private employer rates, on average, are 26.5 percent lower than the average collectible rate in policy year 20004. BWC collected premiums of approximately $2.1 billion in 2006. However, on July 1, 2006 private employer rates increased 3.9 percent. As of December 31, 2006, the total BWC portfolio market value was $16.8 billion, allocated among fixed-income securities(96.2 percent), equities (2.6 percent) and cash (1.2 percent). The overall rate of return of BWC invested assets was 6.20 percent for calendar year 2006.
  
  
• 2004 Supreme Court of Ohio Ruling on Unauthorized Practice of Law
  Industrial Commission Resolution No. R04-1-01
  The statutory Commission hearing process is a unique forum established in the Ohio Constitution. It is recognized that the adjudication process at the commission was designed so that injured workers and employers may participate in the process without using licensed attorneys. However, the Commission and Ohio Supreme Court found it necessary and appropriate to issue interim standards and establish clear guidelines for third party administrators, union representatives, or employees who appear before the Bureau and Commission. Therefore, only an attorney is permitted to examine, cross-examine a claimant, cite or file rulings or case law, make and give legal interpretations or provide legal advice.
  Please Note: TransGlobal Adjusting Corp ensures that we provide appropriate representation for our clients at each hearing.
  

Brunswick Companies' affiliate claims adjusting company, TransGlobal Adjusting Corp., specializes in providing a variety of workers’ compensation insurance services to assist our clients in managing their risk. From loss and claims prevention, to mitigation of the claim, TransGlobal acts as an extension of your corporate staff. Our number one priority is to enhance the profitability of your bottom line.

Our Workers’ Compensation specialists can assist you in controlling your workers' compensation program costs. Contact us today to learn more.