Will Ohio’s Premiums for Workers’ Compensation Drop Again?

workers comp

In July of 2019, the Ohio Bureau of Workers’ Compensation discussed another drop in premium rates for public employers. If this drop goes through, it would be the 11th reduction in premium rates in the past ten years. The BWC’s press release claims that the new premium rate cut would save Ohio school districts and local governments approximately $17.8 million.

Public employers in Ohio pay a set premium rate into the BWC. When the overall number of workers’ compensation claims is relatively low — which is has been recently — and the rates of medical inflation are low, the BWC is able to lower the premium rate for these public employers.

The Ohio BWC will meet again on August 23, and Chris Carlson, the chief actuarial officer for the BWC, said that the bureau will most likely approve the newly suggested rate cut.

Earlier this year, the Ohio BWC approved a 20-percent cut in the average premium rate for private employers. In June 2019, the bureau gave a $1.5 billion rebate — an 88% rebate — to the 242,000 public and private employers in the state of Ohio. This near-total rebate was attributable to healthy returns on investments the bureau made, according to Ohio Governor Mike DeWine.

In a more recent statement, DeWine claimed that the proposed rate cut will be a benefit for public employers, in a year when the budgets of local governments have dealt with natural disasters and an increase in the costs of battling the opioid crisis.

The fact that Ohio’s BWC premium rates have dropped 11 times since 2009 indicates that those rates, for both public and private employers, had been inflated over necessary levels for a considerable amount of time.

Lowering the amount that employers need to pay into workers’ comp is designed as a stimulus to encourage employers to hire more, and to invest in the growth of their businesses.

That 20-percent cut to the BWC’s premium rate for private employers is the largest rate cut the Ohio BWC had made in nearly six decades, according to Jeremy Pelzer from Cleveland.com.

According to the CEO of Ohio’s BWC, Stephanie McCloud, workers’ comp claims have dropped by 18% since 2010. The number of claims in 2018 was 85.136 in total for the entire state.

The BWC premiums cover the benefits paid to injured workers, including both wages and health care costs. These premiums also cover a statewide workplace safety education program, and other improvements to workplace safety.

The premium rate cut for private employers, which the Ohio BWC approved on February 22, took effect on July 1. That private-employer rate cut is expected to save Ohio’s 242,000 businesses a total of $244 million over the coming year, according to projections by the BWC.

What this means for individuals applying for workers’ comp coverage has yet to be seen. That 18% drop in claims over eight years could be attributable to a number of causes. Ohio’s workplaces are becoming safer, according to the BWC. That shift could also mean that fewer workers’ comp claims were approved for payout.

Either way, having assistance in preparing workers’ comp claim applications will certainly improve the chances of an employee to receive benefits coverage on those claims. We here at Clements, Taylor, Butkovich & Cohen LPA, Co., are prepared to help in the filing of the claims, and can answer any questions you may have about workers’ compensation and the processes involved regarding workplace injuries.