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BWC reduces premium rates for non group employers

Published Apr. 16, 2009 | Discuss this article on Facebook
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Buckeye Farm News 

The Ohio Bureau of Workers’ Compensation (BWC) is making changes that will balance out the premium inequities created by group ratings.

On March 20, BWC agreed to reduce premiums by an average 25.3 percent for non group employers. The changes go into effect starting July 1. Premium rates for group-rated employers are expected to increase an average of 9.6 percent.

“For quite some time there’s been inequity of premium rates between group and non group employers,” said Dan Rapp, Ohio Farm Bureau’s senior director of business development. “This is a pretty big change.”

BWC also lowered the maximum discount allowed for group-rated employers from 85 percent to 77 percent. This lower maximum discount and the 25 percent reduction in premiums for non-group employers will result in an overall 12 percent base rate reduction on July 1, BWC said.

“Ohio’s non group-rated employers will now be paying the appropriate rate for their workers’ compensation coverage, one that matches the risk they bring to the system,” said BWC Administrator Marsha Ryan.

Another change the bureau made was putting a cap on employer premium hikes caused by serious accidents or loss of group-rated coverage, Rapp said.

“These changes will result in actuarially sound rates for non group employers,” Rapp said. “This is excellent reform.”

BWC leaders have been overhauling the $22 billion workers’ compensation system since 2005 when the agency was rocked by a series of scandals. A study ordered by the General Assembly concluded that reforming the group rating system should be one of BWC’s priorities.

Rapp said a court ruling probably sped up the group rating changes. A group of Cuyahoga County businesses had sued BWC, claiming that non group employers were subsidizing premium discounts for group employers. In November, a judge ruled that BWC wasn’t complying with state law on how rates are set. A month later the General Assembly changed the law so the group rating program could continue but ordered BWC to reform the program.

OFBF has been pushing for reform in the workers’ compensation system for years and policy says it “supports the Workers’ Compensation Group Rating Program. The group should be entitled to any savings on premium that is fairly earned by the group.”

“This action not only makes Ohio’s workers’ compensation pricing system more in line with those of other states, but it puts us on a level playing field when it comes to future economic development and job creation,” Ryan said.



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