Vince Piscitello was at a job site last year when his office called with word of a hefty rebate check, in the mid-five figures, from the Ohio Bureau of Workers Compensation. I said, What? Go to the bank right away! to deposit it and begin earning interest.
His companys good fortune was part of a larger windfall for Ohio employers, who received about $2 billion in rebates in 1998 from the long-suffering agency. This year, however, the money being returned to employers is considerably less: about $630 million in what are being called not rebates but dividends (the proceeds of which the BWC helpfully suggests should be invested in Y2K compliance and additional employee safety programs).
More important, the money being returned this year is distributed not in the form of actual checks, but in credits to quarterly employer billing statements.
For its part, Piscitellos VIP Restoration Inc. has seen proportionately far less money coming back from the BWC this year than last. Its premium dividends in 1999 have been just $2,700, while it enjoyed total rebates of about $60,000 a year ago. And VIP has been told to expect even less next year, he adds.
While he no longer expects such giant windfalls from BWC, Piscitello isnt really complaining. Thats because, as his case suggests, Ohios workers comp system, which former Gov. George Voinovich famously called the silent killer of jobs in Ohio, is, if not fixed, at least vastly improved in recent years.
If employers arent getting such eye-popping rebates, neither will they be paying such enormous premiums into the system as they once did. Premiums dropped an average of 3 percent this year for all employers paying into the system, according to BWC figures. More fundamentally, theres a general sense that, with the market disciplines of managed care added to the system, premium dollars are no longer being wasted by the once-massive state bureaucracy. (Epic BWC computer glitches once routinely sent duplicate checks to thousands of employers).
Longtime Voinovich aide Jim Conrads surprising decision to remain as the BWCs director after his former boss left the governors mansion for the U.S. Senate has helped further stabilize the agencys fortunes.
A look at VIPs experience with workers comp over its 15-year history vividly illustrates the improvements in the state system. A few years ago, when it was grossing just $1.2 million, the company which performs residential and commercial building restorations with unionized laborers who work about nine months out of each year was forced to shell out approximately $80,000 for workers comp coverage.
While its admittedly in a higher-risk industry than many other companies, with premiums formerly at that stratospheric level, I was very concerned about the viability of the company, says Piscitello. But three or four years ago, with the introduction of managed care to the huge state system, VIP was added to a group rating.
Now, the company, which grosses about $3.3 million, (big public building projects downtown have greatly stimulated overall rehab in the area, Piscitello says) pays only about $20,000 for workers comp coverage, or well under one percent of its revenues.
Overall, Piscitello sounds relatively happy with the systems current condition. But he does sometimes dwell on all those dollars he once poured into the system, which at one time billed itself as the largest single insurance pool in the United States.
Id just like some of the money back for all of those years I spent $80,000, he says.
John Ettorre (firstname.lastname@example.org) is a contributing editor at SBN.