Ohio BWC Announces Five-Percent Rate Reduction

The Ohio Bureau of Workers’ Compensation announced on March 28, 2008, that the Board of Directors approved a rate reduction to help stabilize the peaks and valleys in premiums that some employers have experienced in recent years.  

Many Ohio private employers will enjoy a five-percent reduction in premiums effective for the July 1, 2008 rate year.

Private employers should be aware, however, that the rate reduction is not across the board. The reduction is based upon the manual or job classification reported on the employer’s payroll report. Many manual classifications will have a lower rate in 2008, but there are some manual classifications that will have a higher rate. Private employers can expect to see the rate changes reflected in their January and July 2009 premium payments.

The move to reduce rates goes hand-in-hand with the Board’s decision in 2007 to place stricter limits on the maximum group rating discount that an employer may receive. In the past, an employer’s premiums could increase or decrease by 1,000 percent or more when the company participated in or was removed from a group rating plan. When an employer was removed from a group rating plan, the BWC seemingly added insult to injury because base rates for many manual classifications were excessive. The combination of decreasing base rates and limiting maximum discounts is the manifestation of the BWC’s efforts to stabilize premium swings from year to year.

Additionally, the BWC has now published some of the details regarding the new reserving system for state funded employers that was mandated by House Bill 100 in 2007. The new reserving system, called MIRA II, is touted to use more relevant historical claim data and to be more intuitive regarding the activity in individual claims. You can find more information on MIRA II at www.OhioBWC.com in the Ohio Employers section.  

Posted by: Noel C. Shepard

Categories: Ohio