What an employer should expect from their third party administrator

Companies rely on third party administrators (TPAs) to be their experts, analyzing and quickly grasping the implication of new workers’ compensation rules, regulations and programs.

“Your third party administrator should be viewed as part of your team, which comes with the same expectations for performance, quality and results that exist for any of your direct reports,” says Scott Weisend, client services representative at CompManagement. “Use appropriate due diligence when making your selection, comparing not only price, but reputation, history, types of services and their results.”

Smart Business spoke with Weisend about what to expect from your TPA and what to consider when making a selection.

What type of TPA should an employer partner with?

First and foremost, ensure that the TPA is full service. There are a fair number of organizations that refer to themselves as full service that are not. A true full-service firm provides claims management, cost containment solutions, administration of alternative rating/premium discount programs, safety consulting services, rating and actuarial services as well as hearing representation for the employer before the Ohio Industrial Commission and Bureau of Workers’ Compensation. None of these services should be outsourced to another organization.

What is the reputation of the TPA and how can it be validated?

You can learn a lot about a TPA from the references that they provide, but there are other ways to learn about their services. Ask for information on their results such as settlements obtained, handicap reimbursements awarded, refunds generated from group performance, etc. Also, speak to their business partners. In particular in Ohio, many TPAs work with trade associations, chambers of commerce and other entities that could provide a tremendous amount of feedback about their products and services. Your peers in the industry could also be a valuable resource. Ask which TPA their organization has selected and the reasons for their choice.

Should a TPA need to have industry-specific experience?

Yes. Every employer should be represented by an organization that understands its business and the risks that the company faces each day. If you are a public employer, you should consider a TPA with experience working with municipalities, school districts, counties, etc. Likewise on the private side, if you are in the construction industry, it’s fair to ask a TPA what kind of experience it has in your field. It is also fair to inquire into its results. It’s also important to make sure that the individuals you are working with daily are knowledgeable and have the experience, training and expertise to assist you.

What type of training and educational opportunities might a TPA offer?

A full-service organization should offer training opportunities in the area of workers’ compensation and safety. Look for topics related to the management of claims, return-to-work strategies, premium rate calculation and programs impacting premium, safety best practices and current trends, as well as legislative and industry issues so that you and your team are kept abreast of all matters impacting workers’ compensation today. Ideally, training should also be offered via different media, and cover multiple positions such as employee level, supervisor and management training.

Should a TPA have the personnel to offer consultative support?

If your company is like many today, the person in charge of workers’ compensation most likely wears many other hats. It’s not realistic to be an expert in all matters concerning workers’ compensation if this is the case. This is where a full-service TPA can assist your business and bring an overall peace of mind that they are always a step ahead on making the right decision for both your injured workers as well as your company’s bottom line. Consultative support should come from all levels of the TPA: claims, hearing representation, rates, program participation and safety, and be consistent and thorough.

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This voluntary program helps injured employees get back to work safely

The goal of the Ohio Bureau of Workers’ Compensation (BWC) Vocational Rehabilitation (Voc Rehab) program is to prevent a lengthy disability for an injured worker with a lost-time claim.

“Voc Rehab is an essential element of the benefits provided to employees under the workers’ compensation program,” says Bruce Preston, client services manager at CompManagement and current Rehabilitation Chair of the BWC’s annual Ohio Safety Congress. “It can help employers maintain control over claims and direct employees to great occupational health care.”

Smart Business spoke with Preston about both the benefits and the costs involved in developing a Voc Rehab plan.

What is Voc Rehab?

Voc Rehab is an option when other return-to-work efforts are exhausted or when a worker’s injuries are so severe it prevents a return to their original position. It involves a qualified rehabilitation professional who meets personally with the injured worker to develop a specific plan to accomplish their work-related goal, such as a return to their same or different job with the same employer, or a return to the same or different job with a different employer.

How are the costs covered?

The costs associated with Voc Rehab, including lost-time compensation, are covered by the BWC surplus fund and are not charged to the employer’s policy/experience for rate-making purposes. Limited Voc Rehab services are available for medical-only claims, but those costs are charged to the employer’s premium experience.

What are the benefits of Voc Rehab?

Programs like Voc Rehab can help keep employers involved in the injured worker’s medical condition and treatment plan. It also allows an employer to retain experienced workers, thereby eliminating the time and costs associated with hiring/training new employees. Employers can also help maintain workforce morale and confidence in their plan to help them deal with the injury and preserve their job. Voc Rehab benefits for an injured worker include a quicker recovery, a smoother transition back to regular duty, keeps job skills current and reduces problems related to inactivity.

Who is responsible for determining the feasibility of a plan?

While any party to a claim can make a referral for Voc Rehab, an employer’s managed care organization is responsible for determining program feasibility, which includes reviewing any medical, psychological or other barriers to an injured worker’s ability to fully participate in the return to work focused rehab plan. The BWC is responsible for determining program eligibility.

What’s often included in a Voc Rehab plan?

The main services included in a Voc Rehab plan include:

  • Employer incentive contract — compensates for lost productivity for workers who return to work before they are capable of performing regular job duties up to 50 percent of their salary for 13 weeks.
  • Gradual return to work — allows injured workers to return to work on a graduated basis building up from four hours a day to full-time status. BWC pays injured workers for lost wages due to hours not worked up to 13 weeks.
  • Job modifications — can be made by removing or altering any physical barriers that prevent injured workers from performing essential job functions.
  • Tools and equipment — may also be provided under the plan to allow the injured worker to return to work.
  • On-the-job training — allows an injured worker to obtain or upgrade vocational skills through actual work experience. The employer is reimbursed for the trainer’s time up to a set amount.
  • Work trial — permits an injured worker to attempt a return to work in their original job or a new job for a period of one month allowing an employer to test, evaluate and observe the worker at the actual job prior to hiring.
  • Job seeking/skills training — assists an injured employee who is not able to return to his or her original employer.

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How to benefit from an Ohio program designed to employ the handicapped

The handicap reimbursement program designed by the Ohio Bureau of Workers’ Compensation (BWC) is an important means for employers to reduce their overall experience costs and resulting premium rates.

“The program was designed to encourage employers to hire individuals with pre-existing conditions,” says Teri Hinckley, handicap reimbursement specialist at CompManagement. “It allows employers to request a percentage reduction in cost of the claim charged to their experience if the claimant has a pre-existing condition that caused the injury, contributed to increased costs or delayed recovery.”

Smart Business spoke with Hinckley about the handicap reimbursement program in Ohio as well as the impact that an employer may see from filing a request.

What is a handicap reimbursement?

The Ohio Revised Code 4123.343 explains that the handicap reimbursement program was designed to encourage employers to hire and retain handicapped employees. An employer then may be eligible to have a percentage of the costs associated with a workers’ compensation claim charged to, or refunded from, the statutory surplus fund.

When is a claim eligible for a handicap reimbursement?

In order for a claim to be eligible for handicap reimbursement, the claimant must have received temporary total compensation, permanent total compensation, a scheduled loss award, death benefits or have been paid salary continuation. The claimant must also have one of the conditions that qualify for reimbursement, a list of which is available on the BWC’s website. All requests for handicap reimbursement are reviewed and determined by the BWC’s Legal Operations Department.

What impact may a handicap reimbursement have on a company’s premium rate?

The handicap percentage that is awarded by the BWC is applied to medical costs, reserves and any reducible compensation — temporary total compensation, permanent total compensation, a scheduled loss award or death benefits — charged to the claim. Those reduced costs are then used in the experience calculation for the employer and the employer’s rates are reduced accordingly.

When a handicap is awarded, it is applied to all years that the claim impacts the employer’s premium rates. Based on our experience with employers, that can result in premium refunds for previous years as well as rate reductions for current and future years. The percentage, however, is not directly applied to the employer’s bottom line premium — a 10 percent handicap does not equate to a 10 percent premium reduction.

When is the best time to file for a handicap reimbursement?

We have found through working with employers that there are several factors that can determine the optimal time to file an application for a handicap reimbursement. In order to obtain the greatest percentage relief, employers have generally found it is best to wait until the claim has been sufficiently developed. This may entail waiting until the claim is nearly out of the employer’s experience. If a handicap application is filed too soon in the life of the claim, the percentage awarded can be lower because it may be difficult to show delayed recovery if the claimant has not recovered yet. In addition, there may be additional conditions allowed later in the claim that could result in a higher percentage.

Employers, however, also like to weigh the alternative rating program eligibility impact and premium savings when determining the best time to file. For example, if obtaining a handicap will help keep an employer eligible for a group rating program, it may be better to file for the application earlier in the claim as the group savings may offset any potential for a higher handicap percentage. In addition, for employers that participate in a group retrospective rating program, filing earlier may result in increased retrospective refunds.

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How to determine when a settlement makes sense

Settlement is an important claims management tool that is allowed by the Ohio Bureau of Workers’ Compensation (BWC) .

“Employers find a settlement to be advantageous as it removes existing reserves or prevents future costs,” says Jill Havens, settlement coordinator at CompManagement. “There is, however, a deadline each year established by the BWC for filing settlements for the policy year. For private employers it is July 15 and for public employers it is Feb. 15.”

Smart Business spoke with Havens about the settlement process and when to initialize a settlement with an injured worker.

What is a settlement?

The BWC defines a settlement as when the parties to a claim agree to a sum of money to forever resolve all past, present or future claim issues or liabilities. There are two types of settlements: partial and full. A partial settlement is defined as the settling of only certain conditions, compensation and/or benefits. A partial settlement keeps a reserve open on a claim, which is used by the BWC as an estimated value to determine future premium for the employer. A full settlement means settling all allowed conditions, compensation and benefits which ends the reserve. Only the injured worker/injured worker representative, employer/employer representative or the BWC can file for a settlement.

When does a settlement make sense?

Based on our long history of working with employers to help settle their claims, they have found that better settlements tend to occur during the following circumstances:

  • An injured worker is no longer employed with the company.
  • An injured worker is no longer receiving medical treatment or lost time compensation.
  • A large reserve is being assessed for future medical and/or indemnity.
  • Wage loss is being paid or has been requested.
  • A permanent partial application has been filed, but not yet awarded or paid.
  • A permanent total disability application has been filed.
  • Additional conditions have been requested on the claim.
  • A rehabilitation plan has been completed.

What claims may not be beneficial to review for settlement?

We have found that in working with employers, their encounters have shown that it may not be beneficial to settle a claim during the following circumstances:

  • An injured worker is still receiving ongoing temporary total compensation, extensive medical treatment or is pending surgery.
  • The claim has reached maximum value based on compensation, medical and the BWC program.
  • The claim has no reserve or no current activity.
  • The claim is no longer impacting the employer as it is out of the experience period.

How is a settlement approved?

The BWC will review the settlement application for the claim to understand the potential benefits, determine if the claim is ready for settlement and identify a value for settlement. If all parties and the BWC sign the settlement agreement, an approval letter is sent to all parties to the claim as well as the Industrial Commission of Ohio. All parties have 30 days to withdraw their approval of the settlement, otherwise the settlement will be paid to the injured worker or their representative. Once a claim is settled, it cannot be reopened, nor can any medical or indemnity be paid against the claim.

Does a settlement impact a premium discount program?

Yes, a settlement may have an impact on premium discount programs and should always be reviewed prior to initializing an application. Settling a claim can help reduce costs to potentially keep an employer eligible for a program and reduce future liabilities that are charged directly to the employer.

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Tools that benefit employers and injured employees

The goal for every employer should be to return their injured employees back to work in a safe, timely and healthy manner. To assist employers with this goal and keep claim costs at a minimum some consider two beneficial strategies: transitional duty and salary continuation.

“From the injured employee’s perspective the programs offer a smoother transition back to regular duty, allows them to stay current on job skills, and maintains work relationships and financial stability,” says Todd Keserich, assistant vice president of client services at CompManagement.

“For employers, the programs help to reduce costs, keep productivity in the workplace and reinforce their commitment to the welfare of their employees.”

Smart Business spoke with Keserich to learn more about these programs.

What are the benefits of transitional duty?

Transitional duty is a method of returning an injured worker to modified duties or tasks that fit within the restrictions of the injury but are different than the job performed at the time of the injury. The program offers an alternative to downtime and allows for the retention of an experienced employee while facilitating a safe return to full and normal duties.

How are job modifications determined?

Determining job modifications needs to be a collaborative effort between the employer, injured employee, physician of record, managed care organization and rehabilitation professional.

As modifications are being developed, keep in mind the injured employee’s limitations, restrictions, functional capacity and physical capabilities. The costs of job modifications for lost-time claims may be charged to the Ohio Bureau of Workers’ Compensation (BWC) surplus fund under rehabilitation costs.

What makes transitional duty successful?

Although a formal documented program is not required by the BWC, it is highly recommended to utilize job analyses.

All normal work rules should be followed and, prior to implementation, any job restrictions should be obtained from the physician of record. An added benefit would be to have the physician of record actually approve the specific duties the injured employee will be doing while in the program.

A transitional duty offer should always be presented to the injured employee in writing and include a start date and time, expected duties, hours and rate of pay. A signature of acceptance or refusal should also be obtained from the injured employee.

Paying the injured employee his full salary despite actual hours worked or duties performed while on transitional duty may prevent eligibility for wage loss compensation, thus keeping claim costs low. In addition, the BWC offers a transitional duty 3-to-1 matching grant program to help employers implement a program as well as a 10 percent bonus if the program is successfully utilized.

How is salary continuation beneficial?
Salary continuation is defined as the continuation of wages in lieu of temporary total compensation payments by the BWC to the injured employee.

Salary continuation can be beneficial for both the injured employee and the employer. The injured employee receives full wages instead of the reduced rate of pay under temporary total in addition to avoiding any potential delays in compensation.

The employer, on the other hand, is able to avoid the compensation from contributing to the claim costs.

How is salary continuation monitored?

Employers should stay connected and monitor claims involving salary continuation by setting clear expectations that the injured employee will be compliant with treatment and provide status updates.

Employers should request medical records regularly to help determine if they are able to accommodate restrictions for a return to work through modified tasks within their original job or another restricted-duty job at the company with the ultimate goal of a full duty release.

If there is no progression of the restrictions or release to restricted or full duty from the physician of record in sight, an employer should consider establishing an end date to the payment of salary continuation.

Always consult with a third party administrator to find the right time to do so and provide notification to the injured employee in writing. ●

Insights Workers’ Compensation is brought to you by CompManagement

Important steps to take when investigating a claim

There are several claims management strategies to use when assessing a new claim that occurs in the workplace.

“It is important for employers to have a well-defined internal program in place so that you are prepared to deal with any injuries or incidents that may occur in your workplace,” says Debbie Smith, claims team lead at CompManagement. “The two most important are related to the investigation of a claim and the corresponding documentation. If a claim becomes contested, the steps an employer takes in the very beginning and the attention given to the details may assist them in defending against the claim if warranted.”

Smart Business spoke with Smith about what to look for, red flag indicators and recommended strategies for documenting a workers’ compensation incident.

What are the key factors in an investigation?

Take the time to review the circumstances surrounding the claim. Look at where the incident occurred and take steps to prevent another injury. Take pictures or review security tapes. Ask co-workers what they saw or know about the incident and about the injured worker, such as hobbies and outside activities. Conduct the investigation as soon as possible after an injury occurs so the details are fresh in everyone’s minds.

What are some red flag indicators?

Although the vast majority of claims filed are compensable claims, there are still some red flags that employers should be on the lookout for in order to prevent fraudulent claims from hitting their experience. Some important red flags include:

  • Lapse in injury reporting. A gap between the date of injury and the first notice to the employer could indicate that the injury occurred outside the workplace.
  • Timing of the injury. Was the injury reported prior to a holiday or before/after a weekend?
  • No witnesses. Lack of witnesses or accounts of the incident containing conflicting statements can lead to credibility issues.
  • Vague accident descriptions. Watch for those that do not paint a clear picture of what happened.
  • Work performance. Did the injury follow a disciplinary action? If so, the injury may be retaliatory in nature and lack objective evidence.

What questions should be asked?

Through the course of any investigation, there are five questions that should be asked that include:

  • What was the employee doing just before the injury occurred?
  • What happened?
  • What object or substance directly harmed the employee?
  • Were unsafe acts involved?
  • Were there unsafe conditions involved?

Why is documentation so important?

Any workplace incident should be documented whether or not it results in an injury or illness. The information will help clarify medical conditions related to the claim and can help an employer identify the need for training, additional safety equipment or procedural improvements. Make sure all reports are completed, such as an incident report, supervisor’s report, witness statements and Bureau of Workers’ Compensation paperwork. If a claim is contested, this information will be important to have available to defend against the claim.

What should be documented?

When developing your internal program, keep the following five items in mind:

  • Use the appropriate forms. Supervisors and any witnesses should document the incident, multiple witnesses should submit separate written accounts of the incident.
  • Make it mandatory. Communicate expectations with employees, managers and supervisors for documenting and reporting injuries.
  • Be thorough. The details of an injury are key factors in determining medical conditions that should or should not be included in a workers’ compensation claim.
  • Timing is important. The earlier the incident is reported and documented, the more valuable and accurate the information is from the involved parties.
  • Train your supervisors. All supervisors should understand that documentation should be timely and thorough.


Insights Workers’ Compensation is brought to you by CompManagement

Tips on managing workers’ compensation claims

One of the most important phases in the life of a workers’ compensation claim is the very beginning, right when it happens, as time is of the essence.

“It’s important to stay on top of the situation and utilize your resources to explore remain at work options for the injured worker as well as coordinate return to work plans when the employee is able to do so,” says Sean McKelley, assistant vice president of claims at CompManagement. “Working with the Ohio Bureau of Workers’ Compensation (BWC), your Managed Care Organization (MCO) and your Third Party Administrator (TPA) will help you care for your injured worker, modify your workplace to prevent future injuries, and facilitate a safe and early return to work. That will not only control the cost of the claim, but also show the injured worker and other employees that you count on them as valuable contributors to your organization.”

Smart Business spoke with McKelley about simple ways to control costs while assisting injured employees.

What should be done immediately upon learning of a work-related injury?

First and foremost, obtain prompt medical attention for the injured employee with a preferred medical provider in your MCO’s network.

Second, document the injury. Take the time to review the circumstances surrounding the injury. Look at how and where the injury occurred and take the steps necessary to prevent another injury. Take pictures or review security footage. Ask the supervisor and co-workers what they saw or know about the incident and create witness statements. Make sure results of the investigation are documented and complete all required reports such as an incident report, a supervisor’s report and other BWC forms.

What can be done to keep injured workers engaged?

Maintaining good communication with all parties involved in the claim can help to minimize the impact of the claim. Stay in touch with the injured worker while he or she is off work and make sure that he or she understands who the primary contact is at your organization if there are questions about a claim.

Employees who do not hear from their employer often assume the employer does not care about them and may even wonder whether they have a job in the future. A brief call once or twice a week will help maintain their confidence, positive attitude and eagerness to return to work. This averts a prolonged disability absence and helps provide an avenue to discuss salary continuation or a transitional work program, which can have a positive impact on your premium rate.

Why is it important to know the doctors in the area?

Many employers have seen the benefits of establishing a working relationship with medical providers in their area, especially occupational health facilities. As these providers become more familiar with your operation, they are able to better assist with transitional duty programs that may be offered to the injured worker during recovery. A transitional duty program provides alternatives to lost time and allows the employer to keep workers’ compensation disability costs low. Often, with minor modification in job duties or hours scheduled, an employee will be able to return to work following the injury. Sometimes a completely different job position is necessary for the short term, but employers should try to accommodate any physical restrictions. The idea is to return an injured employee to gainful employment activities as soon as possible to avoid the ‘disability trap.’ The BWC also currently offers transitional work grants and an incentive bonus program to qualified employers to assist them with the costs of implementing transitional work programs.

What resources are available?

Use the resources available in Ohio through the BWC, your MCO or your TPA. TPAs are retained by employers to help navigate the BWC system. A TPA is an advocate for the employer. An MCO medically manages an employee’s claim and is a neutral party representing both the interests of the employer and the injured worker so that a safe return to work is possible.

Insights Workers’ Compensation is brought to you by CompManagement

What’s on the horizon in 2015 for Ohio’s workers’ compensation system?

As 2014 comes to a close, we look ahead to the continued changes to be made in the Ohio workers’ compensation system that will bring a few benefits to the employers in the state.

“In 2015, the Ohio Bureau of Workers’ Compensation (BWC) expects to implement several new initiatives that include other states’ coverage, ICD-10 diagnosis codes and a prospective billing system for the collection of workers’ compensation premium versus the current in arrears payment,” says Randy Jones, senior vice president of Ohio TPA operations at CompManagement, Inc.

Smart Business spoke with Jones about why the BWC is planning these changes in 2015 and the advantages that each initiative will bring to employers.

Why is other states’ coverage a problem?

Other states’ refusal to recognize Ohio’s coverage of Ohio employees working temporarily in other states has resulted in fines and ‘stop work’ orders, and has also forced employers to acquire the other state’s policy and pay additional premiums. A solution was implemented in 2008 to segregate out-of-state payroll and have an employer purchase private insurance in the marketplace. This solution has become too expensive and is also not available for certain industries. It has also inflated the employer’s experience modifier — a factor used to calculate premium — because claims continue to be reported to Ohio.

What is the BWC doing to help employers with other states’ coverage?

Through House Bill 493, BWC has been granted the authority to offer limited other states’ coverage. It permits the BWC to enter into a fronting arrangement with an insurer of other states via a request for proposal (RFP) that would provide coverage for employer-requested jurisdictions. Ohio employers would then be able to show proof of coverage, eliminate contingent reciprocity provisions, eliminate the requirement to segregate payroll and be given one combined premium for coverage both in-state and out-of-state. The BWC is expected to issue the RFP by Jan. 1, 2015, and select a provider before the proposed implementation date of July 1, 2015.

Why is the BWC implementing ICD-10 diagnosis codes?

Due to the Health Insurance Portability and Accountability Act (HIPAA), covered entities must convert from the current ICD-9 diagnosis system to ICD-10 in 2015. Although the BWC is exempt from HIPAA, there were still several reasons to implement that included the fact that ICD-9 would not be maintained; medical providers in Ohio would need to treat BWC differently when processing workers’ compensation bills; new diseases would not be listed; ICD-10 is more specific and has approximately 68,000 codes versus the 13,000 under ICD-9; and the impact on Medicare reporting as well as benchmarking for national comparisons. Given these reasons, the BWC is currently modifying its system infrastructure to have the ability to receive both ICD-9 and ICD-10 codes by the deadline date of Oct. 1, 2015.

When it comes to prospective billing, how will employers be able to learn more about it and the changes that are being made to the system?

By now, employers should have received communication from the BWC or their third-party administrator on the key changes for implementation that include earlier enrollment deadlines for premium discount programs, transition credits to be offered, new payment schedules and the implementation of a true-up process. The BWC has plans to continue its communication effort via direct mail; its external website, www.ohiobwc.com; presentations to employer groups; articles in Payroll News; a seminar series to be conducted in the spring of 2015; webinars; social media; newspapers; and sessions to be held at the 2015 Ohio Safety Congress & Expo at the Columbus Convention Center March 31 to April 2.

Employers should have discussions with their third-party administrator and complete a feasibility study to know all of their options for 2015 before automatically re-enrolling in the same premium discount program. Other programs may offer better savings for this next policy year.

Insights Workers’ Compensation is brought to you by CompManagement, Inc.

Ohio workers’ compensation system changes will impact your business

As we approach the end of the calendar year it’s a good time to review a few key events happening for business owners in Ohio in regards to the workers’ compensation system.

“The Ohio Bureau of Workers’ Compensation (BWC) has been moving forward on several initiatives over the past few months that include giving another billion dollars back to employers, settling a lawsuit that has implications for some employers in the state and continuing the implementation of a prospective billing system,” says Mark MaGinn, vice president at CompManagement.

Smart Business spoke with MaGinn about what every employer in Ohio with workers’ compensation coverage issued by the BWC should be aware of right now.

What is the benefit of the Another Billion Back initiative?

Another Billion Back comes on the heels of the Billion Back issued in the spring of 2013. It includes a $1 billion rebate to 3,800 public employers and approximately 184,000 private sector employers, as well as several new programs targeting workplace safety.
The rebate, like the one issued in 2013, is possible because of sound fiscal management that led to strong investment returns. BWC began to issue checks last month to employers that have current mailing addresses on file with the agency. The rebates equaled 60 percent of premiums employers paid for the July 1, 2012, private employer policy year and the Jan. 1, 2012, policy year for public employers.

In conjunction with the rebate, BWC increased its commitment to safety. Up to $35 million has been earmarked over the next two years for several initiatives that include the areas of overexertion, slips, trips and falls, musculoskeletal disorders, health and wellness, firefighter safety training, expansion of the safety intervention grant program for employers to purchase equipment to reduce or eliminate injuries, and the development of safety curricula and funding for skilled labor training programs such as carpentry, welding and plumbing.

What should an employer know about the San Allen case?

BWC has settled the San Allen case, a class action lawsuit filed in 2007 against the State of Ohio over BWC pricing policies that were in place between 2001 and 2008. The settlement administrator mailed eligible employers a class notice with proof of claim form in August. All forms were to be completed in full and postmarked no later than Oct. 22, 2014.

According to the settlement agreement, a preliminary report of payments to be made is expected to be issued by Jan. 14, 2015. More information may be found via the settlement administrator’s website at www.ohiobwclawsuit.com.

When it comes to prospective billing, what are the four things that every employer should know?

With the implementation approaching for the July 1, 2015, policy year for private employers and Jan. 1, 2016, policy year for public employers, it is important to know:

Deadline dates have been moved up approximately 90 days for alternative rating/premium discount programs, such as group rating and group retro. The settlement application deadline and deadlines to pay premium have also changed. It’s important to make note on your calendar of all new deadline dates in order to prevent missed savings opportunities.

BWC will be providing $1.2 billion in premium transition credits for employers in order to prevent a double payment situation and ease into the new payment system.

Private employers will automatically be transitioned to a biannual payment schedule for the first year; public employers will be invoiced monthly. In subsequent years, employers may select their own installment option of monthly, bimonthly, quarterly, biannually or annually.

Since BWC will be providing coverage based on an estimated payroll, employers will be required to report their actual payroll for the prior year and pay any shortage in premium or they will receive a refund if there is an overage. Failure to report in a timely fashion will result in removal from alternative rating/premium discount programs.

Insights Workers’ Compensation is brought to you by CompManagement, Inc.

Prospective billing implementation impacts key dates for Ohio employers

The Ohio Bureau of Workers’ Compensation (BWC) currently collects premium after extending coverage to an employer — i.e. in arrears or retrospective billing. By transitioning to a prospective billing system, the BWC will align with a standard industry practice enabling it to collect premiums before extending coverage. This change will have an impact on many of the key dates for Ohio employers that have been the same for a number of years.

Smart Business spoke with Lisa O’Brien, director of rates and underwriting services at CompManagement, Inc., about upcoming changes that could impact an employer’s coverage status or alternative rating program eligibility, costing them potential savings.

Who will be impacted by the changes?

Prospective billing becomes effective July 1, 2015, for private employers, so they will see changes first. Public employers will not switch to this new billing practice until the Jan. 1, 2016, policy year.

What is the timeline for private employers?

These are the enrollment deadlines for Alternative Rating Programs in the 2015 policy year:

  • Nov. 24, 2014 — Group Rating.
  • Jan. 30, 2015 — Group Retro, One Claim, Individual Retro and Deductible.
  • May 29, 2015 — Destination Excellence.

What are the private employer payroll and premium reporting deadlines?

Payroll and premium reporting during calendar year 2015 are as follows:

  • March 2, 2015 — Payroll due for July 1, 2014, to Dec. 31, 2014.
  • May 1, 2015 — Policy year 2015 estimated premium notice will be mailed by BWC.
  • June 1, 2015 — Policy year 2015 premium invoice will be mailed by BWC for first prospective installment. BWC will pay as part of transition credit.
  • July 1, 2015 — Payroll reports will be mailed by BWC for Jan 1, 2015, to June 30, 2015.
  • Aug. 1, 2015 — Policy year 2015 premium invoice will be mailed by BWC for second prospective installment.
  • Aug. 31, 2015 — Payroll report due for Jan. 1, 2015, to June 30, 2015. No payment will be due for this payroll report as BWC will pay with transition credit. Second prospective installment is due for 2015 policy year. Bi-monthly installment payments will continue through April 2016.

What is the timeline for public employers?

Enrollment deadlines for the Alternative Rating Programs for the 2016 policy year are:

  • May 29, 2015 — Group Rating.
  • July 31, 2015 — Group Retro, One Claim, Individual Retro and Deductible.
  • Nov. 30, 2015 — Destination Excellence.

What are the public employer payroll and premium reporting deadlines?

Payroll and premium reporting during calendar year 2016 are as follows:

  • March 31, 2016 — Policy year 2015 payroll report and policy year 2016 premium invoice will be mailed by BWC.
  • May 15, 2016 — Policy year 2015 payroll report and 2016 premium invoices are due. Both will be discounted by 50 percent as part of the transition credit by BWC.
  • Sept. 1, 2016 — Balance of policy year 2015 and 2016 premium are due. They will be discounted by 50 percent as part of the transition credit by BWC.
  • Nov. 1, 2016 — Policy year 2017 estimated premium notice will be mailed.
  • Dec. 1, 2016 — Policy year 2017 premium invoice will be mailed.
  • Dec. 31, 2016 — Policy year 2017 first prospective installment is due. Employers may opt to defer payment until April 30, 2017.

With the change to how premium is billed, will an organization be able to make installment payments?

In the first prospective year, BWC will invoice and require private employers to follow a bi-monthly payment schedule.
Public employers will be invoiced monthly starting with the 2017 rating year. In subsequent years, employers will have other installment options that include: monthly, bi-monthly, quarterly, bi-annually or annually.

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