News and Analysis
NAM Seeks Your OSHA Noise Proposal Input
The National Association of Manufacturers (NAM) is leading the charge with a coalition of more than 100 trade associations to fight OSHA’s costly proposal to mitigate noise exposures. As previously reported here, OSHA has announced plans to require extensive “engineering and administrative” controls to protect employees from workplace noise instead of using primarily personal protective equipment. All but companies that “would be put out of business” would be required to make changes, regardless of cost.
Earlier this month, OSHA granted NAM’s request for a 90-day extension for comments, which are now due March 21, 2011. The proposal may go into effect as soon as the end of the comment period; OSHA has not indicated an implementation date, adding further uncertainly.
To accurately assess the harm to your company, NAM has created an online survey to collect data. The safety compliance staff at your company is urged to submit information. The data will be used anonymously unless you specify otherwise. If you have time to do more, contact your Congressional representatives. And consider financially supporting this initiative; NAM has retained outside counsel to effectively file regulatory comment on this costly proposal.
BWC Writes New Contract with MCOs that Ups Performance Focus
The Bureau of Workers’ Compensation (BWC) contracts with the state’s workers’ compensation managed care organizations (MCOs) to medically manage workplace illnesses and injuries. BWC has finalized a new two-year performance-based contract that goes into effect January 1, 2011.
“I think the most significant improvement in this contract is that the BWC will base almost half of the MCOs’ compensation on their effectiveness in returning injured workers safely to work,” said OMA’s president, Eric Burkland. “The vision for the MCO model was always quality of care and demonstrated performance. We want to best medical management for Ohio’s injured workers”
The MCOs will be measured on a new metric, measurement of disability (MoD), which the BWC says will do a better job of measuring return-to-work effectiveness than the old degree of disability management measure. One difference is that the new measure looks at actual return-to-work dates and not release-to-work dates.
“Employers choose their MCOs in the biannual open enrollment periods held by the BWC; this new metric should help employers discern the best MCO for their workers,” said Burkland.
Ohio Workers’ Compensation Rate Reductions Documented
The Oregon Premium Ranking Study, a well-known workers’ compensation industry resource, recently reported that Ohio’s workers’ compensation base rates rank 17th highest in the country as of July 2009. This is down from third highest in the country over a two-year period.
A recent study by BWC’s Actuarial Division shows Ohio’s 2010 average base rates to be at $1.95 per $100 of employer payroll, putting Ohio in the mid-range of the nation for workers’ compensation costs.
Next BWC Chief Says He Will Focus on Rates, Benefits and Private Options
The Gongwer News Service reported last week that Senator Steve Buehrer (R-Delta), the next head the Bureau of Workers’ Compensation (BWC) selected by Governor-elect John Kasich, comes to the position with specific areas of interest.
According to Gongwer, Buehrer wants to examine: partially privatizing the system to allow private insurers to compete with the BWC to write policies; assessing current rate policies to see how to reduce and stabilize rates; and studying the benefits injured workers receive to determine if they are too generous.
He also plans to review the rate reforms that ended subsidies of group rated employers’ premiums by non group rated employers’ premiums. He also plans to study the appropriateness of the system’s level of reserves.
Ohio’s Intentional Tort Law Challenged
Employer liability for work place safety will be considered by a state appeals court. Earlier this decade the OMA supported a law change that clarified that employers could only be sued for damages by injured workers under a limited set of circumstances.
The injured worker is entitled to workers’ compensation benefits regardless of fault; however the “intentional tort” concept allows for the employer to be sued for damages on top of workers’ compensation.
A Cleveland trial court seems to believe the state law was unclear. There are significant ramifications on employers’ liability and insurance premiums if the state law is not upheld upon appeal. The OMA will follow the case and file an amicus brief if further appeals occur.
Some Employers Seeing Group Retrospective Rating Plan Offers – Should You Bite?
This is the time of year when employers are soliciting and receiving proposals for workers’ compensation group rating plans.
Some employers – that due to worse-than-average-claims experience or large payroll size – are receiving proposals for group retrospective rating programs from various workers compensation third party administrators (TPAs).
Unlike the BWC group rating program which offers a premium discount, the Bureau of Workers’ Compensation (BWC) group retrospective rating program comes with a specific set of financial risks for employers. The OMA has prepared a white paper about the potential pros and cons of the BWC group retrospective rating program.
Workers’ compensation group rating continues to be the best premium saving program for many, but not all, Ohio employers. That’s why the OMA has created a suite of management reports that help state fund employers make the best program and product decisions for their companies. OMA members who buy their workers compensation services through the OMA should go to www.ohiomfg.com and click on My OMA to access their custom reports. All other employers should submit a BWC AC3 form to OMA to get their own set of custom reports at no charge.
Take Action Against OSHA Noise Regulations
The OMA has been advising members about potentially costly new OSHA regulations on noise standards. Compliance with the new regulations will impose significant costs on manufacturers.
OMA member American Trim, Lima, has developed a model letter for manufacturers to use in communicating concerns to OSHA. Be sure to copy your member of Congress and U.S. Senator. Forward a copy to the OMA, as well.
BWC to Hold Webinar on New Securitization Model for Self Insured Employers
The Bureau of Workers’ Compensation (BWC) Finance and Reserve Working Group has developed a new securitization methodology and process for self-insured Ohio employers. The aim of the working group was to better match risk exposures of self-insured employers to collateral held by the BWC, thereby protecting the guaranty fund.
The working group invites the state’s self-insured community to a webinar presentation of the group’s findings and the rollout plan for the new securitization model and process.
The free one-hour webinar will be held on Thursday, December 9 at 3:00 p.m.
BWC Changes Salary Continuation Rules January 2011
For years, Salary Continuation has been one tool Ohio state fund employers have used to keep workers’ compensation indemnity and claim reserve costs out of their workers’ compensation claims experience in order to control premiums.
Beginning January 1, 2011, the BWC will begin applying the costs of claim reserves to claims in which Salary Continuation is used, affecting claims with a date of injury on or after January 1, 2011.
Changes to Self-Insurance Highlighted to Manufacturers
The OMA Safety and Workers’ Compensation Committee this week heard a detailed presentation about the Bureau of Workers’ Compensation (BWC) plan for self-insured (SI) guaranty fund security.
BWC Executive Tom Prunte described a new system for evaluating the financial health of existing and new SIs. The change, which will go into effect in January, will establish financial and risk criteria that will govern financial security requirements for the state’s SI employers.
OMA members have been working with BWC management and other stakeholders for more than a year to develop the improvements. A brief fact-page has been developed for your usage.