Ohio Bureau of Workers' Compensation board OKs $1B rebate to employersPosted On: May. 31, 2013 12:00 AM CST
As expected, the board of the Ohio Bureau of Workers' Compensation unanimously has approved plans presented by Gov. John Kasich to distribute $1 billion in cash rebates to 210,000 Ohio employers.
In a separate action, the board signed off on a 2.1% average reduction in base rates for private employers.
The cash rebate to private employers and public employer taxing districts is made possible by larger-than-expected fund balances generated by strong investment management, according to the bureau.
The 2.1% base-rate reduction is for the 2014 policy year, which runs July 1, 2013, through June 30, 2014. It represents an aggregate savings of $29 million over 2013 premium collections.
The reduction follows a 4% rate decrease in 2012 and flat rates in 2013. Actual premiums paid by individual private employers depend on a number of factors, including recent claims history and expected future costs and participation in discount and savings programs.
Rates for public employers, currently at a 30-year low, are decided in the fall.
The board's decision to award the rebates drew a response from Earl Stein, the owner of Corky & Lenny's restaurant in Woodmere and lead plaintiff in a successful class action lawsuit against the workers' comp bureau. The bureau is appealing a March ruling that found employers in the class action are entitled to an aggregate of $859 million in excessive premium payments they made to the bureau.
"We welcome the administration's program to refund a billion of Ohio employers’ dollars from the bureau's nearly $9 billion surplus," Mr. Stein stated in a news release. "Refunding money out of BWC’s state insurance trust fund is clearly an appropriate way to generate growth in Ohio’s economy. However, if the bureau wants to truly demonstrate its commitment to economic development, growth and making Ohio a business friendly state, it is incumbent upon them to immediately refund the $860 million the court ordered them to pay back to 270,000 employers."
This story was first published by Crain’s Cleveland Business, a sister publication to Business Insurance.