In continuation of the “Billion Back” campaign from the summer of 2013, the Ohio Bureau of Workers’ Compensation (BWC) has announced additional changes to come this year and in 2015.
“As we begin 2014, it is important for employers to be aware of impending changes and understand how they can further impact the protection of their workers as well as their bottom line,” says Randy Jones, senior vice president of Ohio TPA Operations at CompManagement, Inc.
Smart Business spoke with Jones about the upcoming changes and their potential benefits to the employers of Ohio.
What is ‘A Billion Back?’
‘A Billion Back’ is a one-time dividend equating to $1 billion for private employers and public taxing districts. It was made possible because the financially strong Ohio State Insurance Fund exceeded the target funding ratio of assets to liabilities established by the BWC Board in 2008.
Checks were released to eligible organizations in June 2013. For private employers that participated in a group retrospective rating program for the July 1, 2011, policy year, dividends were calculated and paid following the 12-month retrospective refund calculation that occurred in October 2013.
What other program benefits may employers utilize this year?
The BWC has also expanded its safety grant program from $5 million to $15 million to further promote workplace safety, workplace wellness and encourage investment in protecting Ohio’s workers. It has modified the program to be a 3-to-1 match with a maximum grant of $40,000 per employer. The BWC has also expanded the program to allow for various types of previously excluded equipment.
Now is the time to minimize your out-of-pocket expense for new equipment that may be eligible under the safety grant program. For example, your out-of-pocket cost of $13,333 would be matched with the BWC’s $40,000, which equates to a 300 percent return on your investment in safety.
According to BWC statistics, every dollar spent on safety equipment equates to a $3 reduction in claims costs.
What can employers expect in 2015?
The BWC will be transitioning to a billing system that will align it with a standard industry practice, enabling them to collect premiums before extending coverage. The transition will become effective July 1, 2015, for private employers and Jan. 1, 2016, for public employers. The BWC has indicated that a change to a prospective billing system could have an overall base rate reduction of 2 percent for private employers and 4 percent for public employers, and provide an opportunity for more flexible payment options of up to 12 installments.
The BWC envisions a few changes as it implements prospective billing, including:
- Earlier deadlines to sign up for incentive/discount programs. Beginning in the fall of 2014, employers wishing to participate in programs such as group rating, group retrospective rating or other discount programs will have to make those selections sooner.
- One-time credit. A one-time premium credit will be given in July 2015 to the average private employer to cover its August payroll report, which includes the January to June 2015 premium as well as the July and August prospective premium. Public employers will receive a 50 percent credit for 2015 and a 50 percent credit for 2016 within the March 2016 invoice.
- A new payment schedule. Private employers will receive their invoices in June and begin paying premiums before July 1. While that’s earlier than in the past, employers will be able to make quarterly payments, with some employers able to choose as many as 12 installments. Public employers will need to pay at least 50 percent of their annual premium for both 2015 and 2016 by May 2016.
- A true-up process. Since the BWC will be providing workers’ compensation coverage based on estimated payroll, it will ask employers to report their actual payroll for the prior policy year and pay any shortage, or receive a refund for any overage in premium. This begins in August 2016.
- Employers should contact their third-party administrator for workers’ compensation to discuss the transition process. ●
Randy Jones is senior vice president of Ohio TPA Operations at CompManagement, Inc. Reach him at (800) 825-6755, ext. 65466 or firstname.lastname@example.org.
Insights Workers’ Compensation is brought to you by CompManagement, Inc.
The Ohio Bureau of Workers’ Compensation’s (BWC) Destination Excellence program allows employers to choose programs that best fit their risk management needs. It focuses on safer workplaces, return to work and savings options for administrative functions.
“These programs essentially offer discounts for things employers already do,” says Randy Jones, senior vice president of TPA Operations at CompManagement, Inc.
Smart Business spoke with Jones about Destination Excellence and how it fits with Ohio’s other premium discount programs.
What programs make up Destination Excellence and what are the discounts?
- Industry Specific Safety Program — Complete one to three loss prevention activities related to your industry, depending on your total payroll, as well as an online safety management self-assessment. Activities include industry specific training classes, attendance at BWC’s Safety Congress & Expo and/or on-site field consulting with a member of the BWC’s Division of Safety & Hygiene. The benefits are an increase in workplace safety and the implementation of industry best practices. It offers a 3 percent discount.
- Drug Free Safety Program — Prevent on-the-job injuries by integrating drug-free efforts into your safety program. The benefits are an increase in workplace safety, productivity and morale. The basic program offers a 4 percent discount, while the advanced program offers 7 percent.
- Safety Council — Regular attendance at safety council meetings in your community to increase awareness of workplace safety and health issues as well as affecting the frequency and severity of claims in your workplace. It’s a chance to learn best practices, increase collaboration among local business owners, improve public relations and increase safety. It also offers a 2 percent discount each for participation and performance.
- Transitional Work — Program to return injured workers to productivity in the workplace by providing modified job duties and other methods that accommodate medical restrictions. There are 3-to-1 matching grants available from BWC to start a program. This could lead to lower injury downtime, improved employee recovery time and increased worker morale, all of which protect your workforce. It also offers up to a 10 percent bonus discount for using an established and approved transitional work program with applicable claims that have dates of injury within that policy year.
- Go Green — Report your company’s payroll electronically and pay premiums in full on the BWC’s website. This reduces paperwork and helps the environment. It also means a discount of 1 percent of your premium, up to a maximum of $2,000 per policy period.
- Lapse Free — Pay premiums on time without a lapse in coverage during the past 60 months and get a 1 percent discount on your premium, up to a maximum of $2,000 per policy period.
Are the Destination Excellence programs compatible with other BWC discounts?
While participating in the Destination Excellence program, employers can participate in the following programs:
- Group Rating.
- Experience Modifier cap.
- $15,000 Medical-only.
- Grow Ohio Incentive Program.
- One Claim Program (private employers).
- Early Payment Discount (cannot be combined with Go Green).
The Go Green and Safety Council discounts within Destination Excellence are compatible with the above programs, as well as Group retrospective rating, Individual retrospective rating and Large/Small Deductible. Small Deductible also can be used with the Drug Free Safety Program.
What are the enrollment deadlines?
The private employer deadline is the last business day of February. For public employers, it’s the last business day in October. Employers wishing to participate in a Safety Council must enroll in a local program by July 31.
What’s the best way to calculate savings?
Contact your workers’ compensation third-party administrator to request a ‘feasibility study.’ It can help you evaluate how the programs could impact your costs. ●
Randy Jones is senior vice president of TPA Operations at CompManagement, Inc. Reach him at (800) 825-6755, ext. 65466, or email@example.com.
Insights Workers’ Compensation is brought to you by CompManagement, Inc.