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• Workers Compensation Administrative Update Whats Up With Group Rating

Workers Compensation Administrative Update Whats Up With Group Rating

written on April 02, 2009 by COSEWorkersCompensation contributor

WORKERS' COMPENSATION: ADMINISTRATIVE UPDATE 3.20.2009

In an effort to achieve better rate stability and premium equity, the Ohio BWC recently approved significant changes to the workers' compensation system in Ohio which will go into effect for the 2009 policy year.  Knowing that administrative changes from the BWC can affect your company's bottom line, we wanted to take the opportunity to update you on these recent changes.

PREMIUM EQUITY

In early March the Ohio BWC Board of Directors approved a plan designed to bring better premium equity to employers in the workers' compensation system.  These changes come after several actuarial studies indicated that a funding disparity existed between Group and Non-Group employers.  These studies maintained that group rated employers were not paying enough to cover the risk that they posed to the system while non-group rated employers were paying too much.  Below is a synopsis of the approved changes to rate setting for the two factions which will be effective for the 2009 policy year:

NON GROUP RATED EMPLOYERS:

• Average premium rate reduction of 25%

GROUP RATED EMPLOYERS

• Average premium rate increase of 10% above current 2009 projections
• Maximum discounts set at 77% for eligible employers
• No longer eligible to receive additional discounts through Drug Free Workplace Program

2009 policy year premiums are payable in February and August of 2010.

Due to the timing of the changes affecting group rated employers, the Ohio BWC extended the deadline for filing the 2009 group rosters to April 24^th 2009.  COSE members renewing in our program and businesses applying to our program will receive revised premium projections that reflect the Bureau's changes.

RATE STABILITY

The BWC Board also approved a modification to premium caps for employers transitioning out of group rating experiences due to claims costs.  To qualify for a premium cap, employers (1) must have an EMR of 1.01 or worse, (2) must be in good standing with the BWC, and (3) must complete a safety plan with the assistance of a TPA or their BWC staff.  Premium caps were designed to control rate volatility that employers were experiencing when transitioning from group rates to non-group rates.

PROGRAMS PART I

On Wednesday, March 11^th 2009, the BWC agreed to extend the Safety Council Program through the 2010 fiscal year with some refinements to the availability of its discounts.  Group rated employers will no longer be afforded safety council discounts beginning with the 2009 policy year.  Discounts for non-grouped employers will stay the same.

The Drug Free Workplace Program will continue for the 2009, but discounts will no longer be available for group rated employers.  Employers outside of group rating can still receive discounts of 10%, 15% or 20% by participating in this program.  For employers already participating in the 2008 DFWP Program, your Self-Assessment Progress Reports were due by 3/31/2009.

The Premium Discount Plus Program has been discontinued effective 7/1/2009.  This program was available to non-group employers who implement a 10 step safety plan in return for premium discounts.

The $15,000 Medical Only Program will be subject to new quarterly reporting requirements imposed by Medicare effective October 1^st 2009.  Employers taking part in the $15,000 Medical Only Program are asked to register with the Centers for Medicare and Medicaid Services between May 1^st 2009 and June 30^th 2009.  Please go to www.cms.hhs.gov/mandatoryinsrep for more information.

The One Claim Program will continue for 2009 with an extended enrollment deadline of  April 30^th 2009 this year.  Employers with one significant claim coming on to their 2009 experience would be eligible for a 40% discount provided that they had no other lost time claims or more than 3 additional medical claims in the last five years.

PROGRAMS PART II

On February 20^th 2009 the BWC Board approved a new Deductible Program available for Ohio employers.  The deductible program will allow employers to elect a per claim deductible level of $500, $1,000, $2,500, $5,000 or $10,000 in return for an up-front premium discount.  Premium discounts will range from 1.4% up to 26% depending on your deductible election and your company's manual classification(s).   This is a BWC sponsored program and enrollment runs from 4/1/09 through 5/31/09 for the 2009 policy year.

The BWC also developed a Group Retrospective Rating Program ("Group Retro") to be made available to qualified employers for the 2009 policy year.  Group Retro provides performance based premium returns for grouped employers who are willing to take on some risk with regard to their safety performance.

COSE & THE BWC

COSE recognizes that the workers' compensation system needs to be fair for all Ohio businesses if we are to survive these difficult economic times and for our region to thrive.  Throughout the proposal process, COSE continued to advocate for a fair approach to rate reform with a profound consideration for its impact on smaller employers.  Please know that COSE will continue to meet with BWC management to ensure that small business has a voice in any reform measures.

 

By Mike O'Donnell, Director, COSE Compensation Services 216-592-2256 or mdonnell@cose.org