Judge Orders End to Group Rating in Ohio
In a stunning development, this week Cuyahoga County Court of Common
Pleas Judge Richard McMonagle ordered the BWC to end the current
group-rating plan for the policy year beginning July 1, 2009. He
also ordered the Bureau to initiate a group retrospective rating
plan.
There is one word in the group-rating statute that has thrown
group-rating in total into question. Here is the language:
“In providing employer group plans under division (A)(4) of this
section, the administrator shall consider an employer group as a single
employing entity for purposes of retrospective rating.”
There it is: the word ‘retrospective.’
The judge ruled that a plain reading of the statute means that the
BWC should have been running only a retrospective group rating program
for all these years in Ohio, not the “prospective”
group-rating program that exists today.
Confused? In a retrospective group rating program, the
participants’ claims experience is measured at multiple points
following the plan year in which they participated. If at any of
these check points, the group’s experience improves, there is a
rebate of premium to participants; if the group’s experience
deteriorates, the participating employers must cough up more premium to
true-up.
The roughly 90,000 employers participating in group-rating know this
is not how the state’s group-rating plan works. But it is
how the state’s plan is prescribed to work according to the
judge’s ruling of the statute.
It remains to be seen whether the BWC will appeal the court’s
decision or whether the legislature would entertain a bill as
soon as this lame duck session to strike the word
‘retrospective’ from the statute. The OMA is
urging both courses of action to preserve group rating.
Meanwhile, COO Lisa Schaaf says, “While this is being sorted
out, members are urged to enroll in the OMA’s group-rating program
to protect their premium savings in expectation of a good fix to this
problem.” 11/20/2008
| 
