News and Analysis
BWC Administrator Buehrer Gathering Stakeholder Improvement Suggestions
In a meeting of the OMA Safety & Workers’ Compensation Committee, new Bureau of Workers’ Compensation (BWC) Administrator, Steve Buehrer, told OMA members that he has set a busy outreach schedule.
He is visiting all 16 BWC service offices, each of the 29 floors of the William Green building that houses the BWC staff, as well as making time for business and other organizations. His purpose is to understand what improvements the agency should make. He says he wants to hear it from the ground up. He has already held a brainstorming session in which 200 BWC employees participated and he has established an email inbox devoted to feedback and suggestions.
One of the first orders of business for the Administrator is securing a budget in the General Assembly; the budget he has submitted is 12% lower than the budget the BWC operated on last biennium, down to $289 million from $325 million.
When asked about the potential of privatization of the Ohio workers’ compensation system, the Administrator responded that the governor is open to exploring ideas but has not established a position. He said, ”We need to gather data from other states. Only a handful of other states started out as state monopolies, like Ohio. We’re going to have to create an Ohio solution.”
Regarding the overall financial adequacy of the agency, Buehrer said there will be a focus on this as the system heads in the rate-setting season, now through the June BWC Board meeting, in which rates will set for the next policy year.
OMA Safety & Workers’ Comp Policy, June 2006
Oversight Commission Votes to Increase Premium
The Workers’ Compensation Oversight Commission met in late April to increase private employer premiums by 3.9%, consider new more conservative investment strategies and investment management structures, and to consider newly proposed rule change. At the May meeting of the Commission a presentation was offered by a retained investment expert that suggested the investment portfolio should include equities to minimize risk, particularly in times when the bond market is down. The Commission will meet again over the summer to adopt its new investment policy, however it seems certain that it will be a long time before private employers see premium relief. The OMA has been vigilant in expressing concern directly to the commission members. You can review the proposals at the link to BWC Oversight Commission Meeting Resources: http://www.ohiobwc.com/basics/guidedtour/generalinfo/OCAgendasMinutes.asp
Workers’ Comp Reforms Signed Into Law
Governor Taft signed Senate Bill 7 into law on 3/28/06 and provisions become effective June 30, 2006. Please recall this comprehensive set of legislative reforms is expected to result in significant employer savings. The OMA has summary material detailing the specific bill and is available at the OMA website or upon request. SB7 was the result of much negotiation, as provisions were added and shaped in part by representatives of injured workers and the trial bar. Some provisions are better than others for employers, but on balance the OMA believes the legislation is a significant improvement. Regrettably, representatives of the UAW, who were a party to the legislative negotiations have chosen to take the legislation to referendum in November.
Workers’ Comp Governance Debate
Since the allegations of politically charged scandal first erupted over a year ago, policy makers have been struggling to respond adequately. Criminal and civil investigation has turned into prosecution. Additional indictments and admissions of guilt seem to be a weekly development. In June 2005, the legislature acted in response to the unfolding problem and provided the Oversight Commission with additional investment expertise and attempted to make that body more accountable by designating its members “fiduciary”. All of this has had a crippling effect on the perceived confidence in the structure of the BWC. While public calls for privatization have dissipated somewhat in recent months, they have now taken their place in the platforms of statewide candidate campaigns. This is too important of an issue area to be politicized.
In spite of the ongoing investigations, prosecutions and political responses, Administrator Bill Mabe has assembled a new senior management team and is aggressively working to drive costs out of the system. While part of his annual management effort is based on implementing SB 7 reforms, he and his team have unearthed several other innovative concepts. Rule-making, fee schedule revisions, and attempts at some legislative restructuring are all ongoing examples of current BWC-driven activity. The OMA is monitoring developments and providing comment as necessary with guidance from the OMA Safety & Workers’ Comp Committee and the OMA Board of Directors.
OMA Safety & Workers’ Compensation Committee Materials – 11/09/2011
These are the materials that support the November 9, 2011 OMA Safety & Workers’ Comp Committee meeting, and they have utility to the workers’ comp – and broader – community of practice among Ohio manufacturers as well.
OMA Safety & Workers’ Compensation Committee Materials 03/03/2011
These are the materials that support the March 3, 2011 OMA Safety & Workers’ Compensation Committee meeting, and they have utility to the workers’ compensation management community of practice among Ohio manufacturers as well.
Content of note includes:
- Overview of what’s moving in workers’ comp matters in Ohio by OMA public policy managing director, Ryan Augsburger
- A BWC presentation on the new self insured securitization model
- A report that contains, among other content, current court cases that stem from workers’ comp disputes by OMA counsel, Bricker & Eckler LLP
- A set of graphs from the actuarial section of the Bureau of Workers’ Compensation that show premium and claims cost trends
- And a report of recent OSHA activities contributed by OMA Connections Partner, Safex
OMA Safety & Workers’ Compensation Committee Materials 06/23/2011
These are the materials that support the June 23, 2011 OMA Safety & Workers’ Compensation Committee meeting, and they have utility to the workers’ community of practice among Ohio manufacturers as well.
Content of note includes:
- BWC Claims Cost Analysis & Potential Reforms,
- National Council on Compensation Insurance (NCCI) Presentation to the senate task force re. workers’ compensation models,
- Constitutional Considerations of a Private Workers’ Compensation System in Ohio, a memorandum from Jones Day,
- Executive Summary to BWC Board of Directors: Self-Insured Employers Assessments, and
- OMA Counsel Report from Bricker & Eckler LLP.
Heard this Week at the BWC Board Meeting
OMA staff auditing the public Bureau of Workers’ Compensation board of directors meeting and actuarial committee meeting this week noted:
- Liz Bravender of the BWC actuarial section gave a presentation that shows rising claim cost and decreasing premium trends for the BWC base and country-wide, as reported by the National Council on Compensation Insurance (NCCI). The average indemnity cost of a lost-time claim in the BWC system is $54K, and the average medical costs per lost-time claim are $42K.
- The BWC is considering the potential formation of a new NCCI manual classification for Potato Chip/Popcorn/Snack Chip manufacturers; this is an NCCI classification used in other states. OMA does not object to this potential development as new workers’ compensation classifications start out with the rates of the class where such employers were formerly reported, and then each class develops its own rate over time based on the class employers’ collective payroll and claims experience.
- While used by very few employers at this time, the BWC large deductible program with stop loss option may be modified to better match employer premium savings with risk brought to the system. Today the program can potentially give an employer too large a discount for the risk it brings to the system.
- BWC consultant, Deloitte, presented, but no action was taken on, a potential modification to modifying base rates. Currently the BWC only has a cap on rate increases; increases are are capped at +30%. The cap on rate decreases was eliminated two years ago. Deloitte feels there should be a +/-25% cap since a plus/minus cap is used in most other states and limits the amount that might be subsidized by other classifications.
- The Medical Committee of the Board reported that 25 out of the top 28 prescribed drugs paid for by the BWC are not in a generic form, and that the prescribed drugs that drive the largest costs to the system are the pain relievers, Oxycontin (oxycodone) and Percocet.
- Tracy Valentino, BWC chief fiscal & planning officer, gave the BWC’s Enterprise report, noting the BWC has just over $5 billion in net assets. An in-depth discussion ensued about the appropriate level of agency funding; the Audit Committee will entertain an in-depth review of net assets, funding and Board-set financial ratio targets next month.
OSHA Issues Enforcement Guidance On Personal Protective Equipment
This week the Occupational Safety and Health Administration (OSHA) issued the Enforcement Guidance for Personal Protective Equipment in General Industry, a directive that provides enforcement personnel with instructions for determining whether employers have complied with OSHA personal protective equipment (PPE) standards. The directive was effective February 10.
Changes in this directive include clarifying what type of PPE employers must provide at no cost to workers and when employers are and are not required to pay for PPE.
Under these standards, employers are required to provide – at no cost to workers – protective equipment, such as goggles and face shields that fit properly without restricting vision; earplugs and earmuffs when they will reduce noise to acceptable levels and are less costly than administrative and engineering controls; and respirators to protect workers from exposure to air contaminants. Additionally, the directive lists PPE and other items exempted from the employer payment requirements and includes questions and answers useful in clarifying PPE payment concerns. Visit OSHA’s Safety and Health Topics page on Personal Protective Equipment for more information.
OMA has a webinar planned for May 26 that will help members understand the steps of conducting a PPE assessment and how to review their programs for compliance with the OSHA standard.
BWC Releases Annual Report
The Ohio Bureau of Workers’ Compensation (BWC) is the largest state fund insurance system in the nation. The BWC has been serving injured workers and employers in Ohio for 100 years. It has just published its annual report for fiscal year ending June 30, 2010. For a good overview of recent system improvements, read the Administrator’s letter (page 5) and the Industrial Commission Chairman’s letter (page 99).
BWC Administrator Steve Buehrer takes over an agency with good improvement momentum. Administrator Buehrer is confirmed to speak at the March 3 OMA Safety & Workers’ Compensation Committee meeting; he’ll be sharing his priorities and plans.
BWC Offers Easy Ways to Pay your Workers’ Compensation Premium Due February 28
State fund employers have until midnight February 28, 2011 to file payroll reports and pay workers’ compensation premiums for the period covering July 1 through December 31, 2010.
BWC offers a number of options for reporting and paying. You can pay online at ohiobwc.com, in person at any BWC location or by calling 1-800-OHIOBWC. Online payment allows you to future date your payments.
BWC also has a paperless payroll option that sends e-mail alerts with a secure link that allows you to complete your payroll reports and make payments online. Click here to enroll.
OSHA Backs Off a Proposed MSD Record keeping Requirement
OSHA Backs Off a Proposed MSD Record keeping Requirement The U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) announced this week that it has temporarily withdrawn from review by the Office of Management and Budget its proposal to restore a column for work-related musculoskeletal disorders (MSDs) on employer injury and illness logs. The agency has taken this action to seek greater input from small businesses on the impact of the proposal.
According to OSHA’s press release, the proposed rule would not change existing requirements about when and under what circumstances employers must record MSDs on their injury and illness logs. While many employers are currently required to keep a record of work-related MSDs on the OSHA Form 300 (Log of Work-Related Injuries and Illnesses), the vast majority of small businesses are not required to keep such records.
The National Association of Manufacturers submitted extensive comments on the burdensome affect of this proposed record keeping rule last year.