Columbus, OH – The Ohio Bureau of Workers’ Compensation recently proposed a 2.1% base-rate reduction for private employers at the BWC Board of Directors’ Actuarial Committee meeting. The recommendation would reduce employer premiums by $29 million for the July 1, 2014 policy year. If approved by BWC’s Board of Directors next month, it would be the third year in a row that workers’ compensation insurance rates have remained steady or dropped.
“Conservative management and strong investments, coupled with favorable claim frequency, claim severity and payroll trends are allowing us to achieve our goal of setting the lowest possible rates while still maintaining the solvency of the fund,” said BWC Administrator/CEO Steve Buehrer. “Iâ€™m pleased that over the past three years we’ve been able to provide both quality care and service to Ohio’s injured workers and stable, reasonable rates for Ohio’s employers.”
Ohio’s workers’ compensation rate reductions over the last three years come at a time when the National Council on Compensation Insurance reports that nationally, states with rate increases are outnumbering states with decreases.
The proposal was presented today at the Board’s Actuarial Committee, and is for the 2014 policy year, which runs July 1, 2013 – June 30, 2014. It represents an aggregate savings of $29 million over 2013 premium collections, and would bring the three year savings for Ohio businesses to an estimated $224 million. The three year savings is based on comparisons to 2011 rates and assumes a flat payroll, which is the basis for establishing premium. Employers saw a 4% rate decrease in 2012 and flat rates in 2013.
The actual premium paid by individual private employers depends on a number of factors, including their industry, their recent claims history and expected future costs, and their participation in discount and savings programs. Employers are encouraged to visit ohiobwc.com to learn about the myriad of programs designed to improve safety, reduce workplace incidents, and transition injured workers back on the job, all of which provide additional savings.
In other business, the Board’s Audit Committee heard a proposal to maintain the bureau’s discount rate at 4%. The discount rate reflects the assumed future rate of return on investments and is factored into the bureau’s reserve levels and premium pricing. “While smart investment decisions have resulted in recent annual returns in the 10% range, prudence dictates we think in terms of investment returns over decades not years to ensure we have a strong system for generations to come,” said Buehrer. “The 4% discount rate allows us to control the overall premium costs to employers while maintaining the financial strength to cover future claims costs.”
BWC is a non general-revenue fund state agency that provides workers’ compensation insurance for 250,000 Ohio employers and covers approximately two-thirds of Ohio’s workforce. With approximately $1.9 billion in annual premium and assessment income, BWC is the largest state-fund system in the United States and one of the top 10 underwriters of workers’ compensation insurance in the nation. BWC processed more than 115,000 new claims and paid approximately $2 billion on roughly one million open claims in 2012. BWC’s mission is to protect Ohio’s workers and employers through the prevention, care and management of workplace injuries and illnesses at fair rates.
The next meeting of the BWC Board of Directors is scheduled for Thursday, May 30, 2013.
Source: Ohio BWC