Prospective billing: New process offers payment options, reduction in base rates

As part of the Ohio Bureau of Workers’ Compensation ongoing efforts to modernize operations and provide better service to Ohio’s employers, there now is a prospective billing system for private employers. Public employer taxing districts were launched on Jan. 1. Prospective billing is an insurance industry standard practice that enables the Ohio BWC to collect premiums before extending coverage.

This gives you more flexible payment options after the transitional year starting in 2017 and the ability to better forecast your workers’ compensation premium. In addition, because the Ohio BWC is able to collect the premium upfront, the Ohio BWC is able to reduce base rates.

For the video, “What is prospective billing? Public Employers,” visit this link: https://youtu.be/P1AkNkN8qTU.

Information for public employers

Public employer taxing districts received their 2015 policy period payroll report as normal in December 2015; they received their 2016 invoice for the prospective policy period premium in March. A minimum 50-percent payment is due May 16 for both policy periods. The remainder of the premium is due Sept. 1.

The Ohio BWC will credit each of these by 50 percent. This will result in public employer taxing districts paying roughly the same amount during 2016 that would have been due without the transition to prospective billing.

Transition credit eligibility

To receive the transition credit, public employer taxing districts must be in an active or reinstated status as of Jan. 1, 2016.

Notice of estimated annual premium

Under the new prospective billing system, the Ohio BWC mailed a Notice of Estimated Annual Premium (see this sample: http://1.usa.gov/1SJTeXh) to public employer taxing districts in December 2015. In subsequent years, the Ohio BWC will send the Notice of Estimated Annual Premium in November. The notice is not a bill, but it’s an estimate to aid employers in budgeting for workers’ compensation premiums.

For the video, “Overview of the Notice of Estimated Premium — Public Employers,” go to this link: https://youtu.be/dPwbGkMfB0M.

Question: Can the Ohio BWC adjust the estimated premium if it is not accurate?

Yes. The Ohio BWC bases an employer’s estimated annual premium on payroll amounts the employer previously provided. Employers should notify the Ohio BWC at (800) 644-6292 if they believe their payroll amount is incorrect, or if they anticipate a change in operations that will affect their payroll for the policy period beginning Jan. 1, 2016.

Question: What is the minimum premium adjustment?

The minimum premium adjustment is an adjustment made to bring an employer’s calculated premium up to the minimum premium of $120 plus assessments (BWC and Industrial Commission of Ohio administrative costs as well as the charges for the Disabled Workers’ Relief Fund).

If you have additional questions, send an email to BWC’s prospective billing mailbox: BWC[email protected]