BWC 2009 rate recommendations a mixed bag for employers.

PositionAdvocacy & Lobbying

Recent action by the Ohio Bureau of Workers' Compensation (BWC) Board of Directors produced outcomes that will affect all Ohio employers.

Unfortunately, the bottom-line impact on employers' workers' compensation premiums for 2009 will at best be a mixed bag ranging from a projected average 9.6% increase in rates for group-rated employers, to a projected average 25.3% decrease in rates for non-group employers. The substantial difference will be particularly difficult for group-rated employers to swallow. They tend to use the workers' compensation system less than non-group employers and thus have less of an impact on the system's overall costs.

While the changes will have both a positive and negative impact on rates across the state, original BWC proposals would have resulted in a far more punitive rating structure for group employers than what was approved by the BWC Board. OSCPA staff worked closely with other trade and professional associations and BWC staff to ensure that unintended consequences were minimized and rate changes take place over an appropriate timeframe.

Over the past year, the BWC Administrator and staff explored various changes to achieve what they described as "greater premium equity" for Ohio employers. The Bureau's goal was to ensure that all employers--those participating in Ohio's Group Rating Program as well as non-group employers--pay the most equitable rate based on the risk they bring to the system.

After months of moving targets, changing claims projections and rate-reform proposals and counter-proposals, the Board approved the following changes for the July 1, 2009 rate year:

* OVERALL BASE RATE REDUCTION. To achieve the Bureau's goal of premium equity among employers and rates that better reflect risk exposure, the base rate reduction will be directed entirely to non-group employers. To offset the reduction, group-rated employers will have a 31%...

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