Ohio Workers' Compensation in 2012

On the eve of its 100th anniversary, the Ohio Workers’ Compensation Act was the subject of much debate in 2011. For the first time in a long time there was traction here on Capitol Square for privatizing the Ohio worker’s compensation system. With organized-labor’s defeat of Ohio’s attempt at collective bargaining reform, however, that traction was lost and for the foreseeable future it seems that privatization is off the table.

Even before the defeat of Senate Bill 5 the focus for workers’ compensation reform seemed to shift from a desire to completely overhaul the system to thoughts of making incremental changes to the existing framework. Consistent with this, the Ohio Bureau of Workers’ Compensation recently rolled out a plan dubbed Destination: Excellence as part of their attempts to provide premium relief to Ohio’s state-funded employers. In announcing this program the Bureau stated its continued commitment to controlling costs by helping modify employer behavior.

Based largely on feedback from the employer community the Bureau not only created new programs but changed the eligibility criteria for many of the existing programs to ensure that an employer can take advantage of as many of these programs as they are able. Called a “cafeteria plan” by some, if all the program changes are chosen by an employer that employer could experience a reduction in workers’ compensation rates by 59%. These changes, to be implemented with the July, 2012 policy year, are:

1. 100% EM Cap Program. By changing the qualification requirements of this existing program more employers will now be able to limit premium increases caused by significant changes in their experience modifier.
2. Small Deductible Program. By expanding the number of deductible options participating employers will have the ability to lower claim values which, in turn, relate to lower premiums.
3. One Claim Program. Modifications to this program created increased discounts for participating employers.
4. Ten Step Business Plan for Safety. In response to input from employers seeking more options in industry specific safety programming, this program was modified to more closely adapt to an employer’s industry and experience. Participating employers will continue to receive the economic benefits of the previous program but will now face less of an administrative burden in participating.
5. Industry Safety Discount. Employers who complete a safety risk assessment, provide employer-specific safety data and participate in certain BWC interactions will become eligible for a new 3% discount.
6. Transitional Work Grant Program. Employers using a transitional return to work program will now be eligible to receive grant dollars to implement their program. Those participating employers who can demonstrate that an injured worker returned to work after having participated in the program will also be eligible for a premium bonus.
7. Claim Free Discounts. Employers maintaining a safety committee and who have not incurred a compensable injury for one calendar year will now be eligible for a premium discount.
8. Administrative Discounts. Employers who elect to receive and report payroll electronically and pay their premiums through www.OhioBWC.com will be eligible for a 1% premium discount. Those employers who have not allowed their coverage to lapse at any time in the preceding five years will be eligible for an additional 1% discount.

In addition to these program choices for existing employers, the Bureau has also adopted a “Grow Ohio” program to foster job creation in Ohio by extending premium reductions for new employers.

Of these changes perhaps the one that will receive the most attention in 2012 is the Transitional Work Grant Program. Citing increased medical and indemnity costs, long-term claim costs that are purportedly the worst in the nation and a fourth year in a row where the number of injured workers returning to work within a year has dropped, Administrator Buehrer announced that the Bureau would focus on transitional work plans and the use of vocational rehabilitation as a way to bring financial relief to the system as a whole.

Finally, 2012 may very well also mark the year where we revisit the issue of injured worker benefits. The lasting takeaway from the privatization debate was the need to mainstream benefits to those more consistent with the rest of the nation. Doing so will not only provide additional relief to state-funded employers but also make Ohio more competitive when it comes to the creation of jobs.

As always, your business partners here at Reminger remain committed to helping you navigate the Ohio’ Workers’ Compensation system. Should you have any questions regarding any of these programs, wish to discuss self insurance or would like a complementary seminar on any matter dealing with risk management, please do not hesitate to contact any member of our Workers’ Compensation Practice Group.