Ohio’s Public Employers See a 10% Cut in Workers’ Comp Premiums

There is good news from the world of Ohio workers’ comp for Ohio Schools, and it follows on the heels of other positive reports from the realm of private employers. But will these changes benefit injured workers?

This time, it affects Ohio’s public employers, which include the state’s 3,700 public school districts. Premium rates for public employers’ workers compensation will drop by an average of 10% in 2020. The move is expected to save public schools and other local government employers a total of $17.8 million compared with what they were paying in 2019.

The Ohio Bureau of Workers’ Compensation (BWC) says this is the agency’s 11th reduction in premiums since 2009. The previous reduction for public employers was a 12% rate drop that took effect on January 1, 2019. These rate reductions are averages across the board for all of the state’s public employers, so the actual rate of change will differ district by district and employer by employer — these are merely averages.

According to BWC sources, the rate cut is because of fewer injury claims in the state, and relatively low medical inflation costs.

This news falls closely on the heels of a sizable cut in Ohio’s premium rates for private employers. Private companies’ workers comp premium rates were reduced by 20%, in a move that took effect on July 1, 2019. Similarly, that cut was attributed to lower claim rates, strong investment returns, and other savings.

According to Scott Suttell of Crain’s Cleveland Business Magazine, the 10% cut for public employers’ workers comp premiums stemmed from a recommendation made in the Ohio BWC’s July 2019 meeting.

The hope, with any such cut, is that the reduction in overhead will be a stimulus to public employers. Such a stimulus would, hopefully, lead to more hiring of teachers, school staff, administrators, and other public employees.

Unemployment rates across the state of Ohio were between 2.9% and 7.5%, looking across Ohio’s 88 counties. Mercer County, at 2.9%, has the state’s lowest unemployment rate, while Wyandot and Auglaize are second- and third-lowest at 3.2% and 3.3%, respectively. Athens County and Monroe County had the highest unemployment rates, at 7.1% and 7.5%, respectively. Hamilton County had 4.2% unemployment for the month.

Across the state, the unemployment rate held at 4%, and the state reportedly gained 4,500 jobs since June 2019.

Manufacturing gained 3,200 jobs, while leisure and hospitality gained 2,600 jobs. Sectors that lost jobs included construction (down 1,900 jobs), professional and business services (down 1,400 jobs), and financial activities (down 400 jobs).

There is some controversy in Ohio’s recent job numbers, however. Job numbers have been revised after their initial date of publication. According to Policy Matters Ohio, June 2019 originally showed a gain of 1,500 jobs, but was later revised to show a loss of 900 jobs.

With July 2019’s rate cut in workers comp premiums, it will take several months to observe whether public employers were able to increase their hiring as a result.

An economic research analyst based in Cleveland, George Zeller, says that Ohio’s job growth rate of 0.69% over the past year is lower than the national job growth rate, which was measured between July 2018 and July 2019 at 0.93%.