Columbus, OH – Ohio Bureau of Workers’ Compensation (BWC) Administrator/CEO Steve Buehrer recently announced a proposal to again reduce overall rate levels for private employers beginning July 1. The 10.8 percent reduction, which was proposed during the board’s Actuarial Committee meeting today, would result in a decrease in projected annual premium of $153 million. If adopted, private employer rate levels will be 21.4 percent lower than the rate levels in effect January 1, 2011.
“The ability of employers to expand and create jobs is directly tied to a number of factors, including the cost of their workers’ compensation coverage. That’s why low and stable rates have been one of our highest ongoing priorities,” said Buehrer. “This 21.4 percent reduction over the past five years, combined with strong safety programs that reduce claims by supporting accident prevention and a healthy workforce, is creating more flexibility for employers to invest in their operations and workforce.”
The proposed double digit reduction is attributable to a number of factors, including lower expected claim frequency, as well as the upcoming adoption of a prospective billing system. BWC currently bills employers in arrears, meaning businesses receive coverage and are billed at a later date. Under the new system of prospective billing, BWC will collect premiums before extending coverage. Prospective billing is the industry standard practice and enables BWC to lower rates in reflection of increased investment income.
As previously announced, BWC will also issue a one-time premium credit totaling $1.2 billion to private employers and local governments to keep them from being “double-billed” while transitioning billing practices. Details on prospective billing are available at bwc.ohio.gov.
The proposed 10.8 percent reduction is an overall statewide average. The actual premium paid by individual private employers will depend on a number of factors, including the expected future costs in their industry segment, their recent claims history, and their participation in various premium credit and savings programs.
Ohio local governments are also benefitting from rate reductions and are paying nearly 20 percent less than they were in 2011.
The Board of Directors will vote on the proposal during its next meeting, which is scheduled for Friday, February 27, 2015.
Source: Ohio BWC