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OMA’s Davis Testifies to Protect Rate Reform

December 10, 2009

OMA’s Davis Testifies to Protect Rate Reform

Homepage » Communities » Safety and Workers’ Compensation Management » Archive » 2009 » OMA’s Davis Testifies to Protect Rate Reform

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OMA Director for Workers’ Compensation Services Dennis Davis testified before the Senate Insurance Committee against Senate Bill 213 (Faber, R-Celina).  The bill would prohibit, for two years, the Bureau of Workers’ Compensation (BWC) from implementing key aspects of rate reforms, which are stopping the massive annual cost-shifting from group-rated employers to those employers not in groups.  The bill would also mandate another study of the issue.

Davis testified that the freeze in rate reform would cause an increase in base rates, making Ohio’s costs even less competitive.  He also stated:  “We don’t need another study; we need action to improve the system.  We also need to hold all responsible parties accountable for those improvements.” 

OMA Seeks to Educate Audiences about BWC Rate Reform

December 3, 2009

OMA Seeks to Educate Audiences about BWC Rate Reform

Homepage » Communities » Safety and Workers’ Compensation Management » Archive » 2009 » OMA Seeks to Educate Audiences about BWC Rate Reform

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OMA has produced a new publication to establish a perspective about why the Bureau of Workers’ Compensation (BWC) rate reforms were necessary and what benefits they bring to Ohio’s state fund employers.  OMA’s ReTooling is being distributed this week to the Ohio legislature and to OMA members via this Leadership Briefing.

The OMA believes that workers’ comp rates, prior to reform, punished some classes of employers, namely those not in group-rating.  OMA has agreed with the unanimous findings of commercial actuarial study after study that confirmed the rate-making was flawed.  The rate reforms will help ensure the each Ohio employer will pay the right premium for the risk it brings to the system.

OMA holds that with rate reform fundamentally battened down, the BWC, legislature and stakeholders should get busy addressing the next wave of reform concepts that will reduce costs and improve outcomes for injured workers and employers.  A summary of potential reform concepts are found in the ReTooling

Senate Votes to Study Private Workers’ Comp Insurance

November 19, 2009

Senate Votes to Study Private Workers’ Comp Insurance

Homepage » Communities » Safety and Workers’ Compensation Management » Archive » 2009 » Senate Votes to Study Private Workers’ Comp Insurance

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The Senate this week voted to pass Senate Resolution 118 to “create the Competitive Workers’ Compensation Task Force to review the feasibility of allowing employers the option to obtain private insurance to insure their obligations under the workers’ compensation system of Ohio.”  As a Senate resolution, the measure is effective without action by the House of Representatives or the Governor.
 
This task force will be composed of 19 members, four of whom will be employers, who pay for the insurance.  Other members include two claimants’ representatives, two lawyers, a third-party administrator, a managed care organization and two insurance company representatives.
The resolution allows the task force to contract with a firm with “insurance actuarial evaluation experience.”  It is unclear how the firm will be paid.  It is clear, however, that a credible study of this matter is in the best interest of Ohio, as it has been informally debated for years.

The resolution requires the task force to produce a report by June 30, 2010. 

OMA Environment Committee Materials – 11/19/2009

November 19, 2009

Safety and Workers’ Compensation Management 2009 Archive

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BWC Board Hears First Reading of Large Deductible Program Rules

November 18, 2009

BWC Board Hears First Reading of Large Deductible Program Rules

Homepage » Communities » Safety and Workers’ Compensation Management » Archive » 2009 » BWC Board Hears First Reading of Large Deductible Program Rules

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This week the Bureau of Workers’ Compensation (BWC) board heard the proposed rules for a large deductible program that BWC plans to roll out July 1, 2010.  Earlier this year the BWC launched a small  deductible option for employers that has deductibles from $500 to $10,000.  The large deductible option will have deductible options of $25,000, $50,000, $100,000 and $200,000.

Underwriting criteria will apply and, unlike the smaller deductible program, employers that choose this option will not be eligible for a group-rating plan.  Premium discounts for choosing the large deductible option have not been set but are purported to be in the range of 15% – 57% depending on the deductible selected, increasing as the deductible increases.  Lower premium discounts will apply if the employer chooses an optional stop loss feature of three times the deductible selected.

The next and ostensibly final reading of the rules will occur at the December BWC board meeting and then OMA can begin modeling the program for interested members.  OMA is now in the process of modeling the small deductible program for members and will have analyses ready for distribution early in 2010.  Contact OMA’s Dennis Davis with questions. 

BWC has Marketing Requirements for Workers’ Compensation Group Rating Proposals

November 17, 2009

BWC has Marketing Requirements for Workers’ Compensation Group Rating Proposals

Homepage » Communities » Safety and Workers’ Compensation Management » Archive » 2009 » BWC has Marketing Requirements for Workers’ Compensation Group Rating Proposals

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This year the Ohio Bureau of Workers’ Compensation has cracked down on group-rating marketing practices to increase truth and reliability in group-rating offers.  According to this document on www.ohiobwc.com, all group rating offers must reflect the effective group discount.  The effective group discount is the actual discount after the BWC breakeven factor is applied.  The BWC imposes a breakeven factor on all group-rating groups in order to collect sufficient premium from group-rated employers.  The highest gross discount available for the plan year that starts July 1, 2010 is 65% and the highest effective discount is 51%.  If you receive an offer higher than 51%, the BWC wants to know about it.

Further, only legitimate organizations that exist for purposes other than offering group-rating can sponsor group-rating groups.  This is the list of sponsors the BWC has approved.  Please note that The Ohio Manufacturers’ Association is listed as Ohio Mfgs Assoc and we have asked the BWC to spell out our name so there is no mistaking that the OMA is a certified group-rating sponsor.

OMA members who are currently group-rating members of the OMA should watch their mail for their 2010/11 offers which were mailed this week. 

BWC Board Approves Contested Rate Reforms

October 30, 2009

BWC Board Approves Contested Rate Reforms

Homepage » Communities » Safety and Workers’ Compensation Management » Archive » 2009 » BWC Board Approves Contested Rate Reforms

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Resisting political pressure that arose from intensive lobbying (with half-truths) by workers’ compensation TPAs and group-rating sponsors to defer two slated rate reforms, the BWC board today unanimously approved both pending proposals.  Beginning July 1, 2010, the maximum discount for group-rated employers will be 65%, down from 77%, and there will be a graduated breakeven factor applied to all group-rated employers’ group-rating discounts.

The purpose of the reforms is to ensure that group-rated employers pay actuarially sound premiums to cover the costs of their claims.  While the necessity for the reforms was doubted by some, numerous independent and in-house actuarial studies of the BWC confirm that non group-rated employers have paid too much premium while group-rated employers contributed too little.  The reforms are intended to create fair premium collection mechanisms.

All group-rating offers for the 2010/11 plan year, which will soon be received by employers, are required by administrative code to display both the projected group discount as well as the effective projected group discount, which would include the effect of the breakeven factor.
“A series of actuarial studies by various actuarial firms, as well as a report from the Ohio Inspector General (whose investigative resources were directed to the BWC in the wake of scandal), are conclusive: a massive redistribution of income has taken place annually under the guise of the group rating program.  With its board’s action today, the BWC gains a fairer system of rate-making and can get on with other reforms that cut costs throughout the system and lower base rates,” said OMA president Eric Burkland.

Contact OMA’s Dennis Davis for your specific questions. 

What Should Determine Workers’ Comp Rates? Politics or Actuaries

October 21, 2009

What Should Determine Workers’ Comp Rates? Politics or Actuaries

Homepage » Communities » Safety and Workers’ Compensation Management » Archive » 2009 » What Should Determine Workers’ Comp Rates? Politics or Actuaries

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A large number of workers’ compensation third-party administrators and group-rating sponsor associations are lobbying vigorously against the rate reforms pending before the Bureau of Workers’ Compensation (BWC) board of directors.  Changes that the board will consider next week include lowering the maximum group discount from 77% to 65% and retaining a breakeven factor on all groups that will further reduce discounts.
Some might think that the OMA, as a provider of workers’ compensation group-rating services, would protest the rate reforms as well.  After all, the more employers save in group-rating, the more group-rating service providers earn in administrative fees.
Yet, the OMA supports the proposed reforms.

In his testimony this week to the Ohio Senate Insurance, Commerce and Labor Committee, OMA’s Dennis Davis explained, “The many actuarial studies conducted by the BWC have been convincing to the OMA.  We have come to believe that the historical high group-rating discounts are too high and cause non group-rated employers to pay too much premium.  The OMA supports the BWC’s conclusion, supported by multiple actuarial studies, that the 65% maximum credibility is sound.”

Davis also commented on the use of the breakeven factor, “If there were no breakeven factor at all for the 2010/11 plan year, (as some have proposed), we could be looking at an increase in base rates.

Prior to beginning of the phased BWC rate reforms, non-group employers had been subsidizing group employers by more than $200 million a year.

OMA’s support of the BWC’s proposed changes reflects its mission to protect and grow Ohio manufacturing for all manufacturers, and to resist government actions that punish one class of entities to benefit another, whether in tax policy, workers’ compensation premiums or elsewhere.
The BWC board of directors will take up rate reform on October 30. 

What is OSHA Up To?

October 16, 2009

What is OSHA Up To?

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According to a recent newsletter published by OMA Connections Partner, Roetzel & Andress, the current OSHA focus is: “OSHA is moving to enact new rules involving the exposure of workers to silica, diacetyl (a flavoring additive linked to “popcorn lung”), and beryllium.  Further, OSHA wants to take a serious look at the issue of combustible dust which will affect many Ohio industries, such as paper, rubber, textiles, food, tobacco, wood, plastics, rubber, furniture, and many others. Finally, it is expected that the Agency’s proposed ergonomic standards to address repetitive stress injuries will make a comeback, as will increased enforcement by OSHA inspectors and their use of the “general duty clause” to cite employers who did not take reasonable steps to remedy a hazard if the employer knew of the problem.” 

Get BWC News from the Source

October 16, 2009

Get BWC News from the Source

Homepage » Communities » Safety and Workers’ Compensation Management » Archive » 2009 » Get BWC News from the Source

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The Bureau of Workers’ Compensation now publishes a monthly e newsletter about events and news impacting Ohio’s workers’ compensation system and its customers.  You can see it at BWC’s web site or subscribe by sending an email to bwce-communications@ohiobwc.com