Ohio BWC Board of Directors Rejects Recommendation on Group Rating Discounts
On November 21, 2007, the BWC Board of Directors voted on the issue of reducing the maximum group rating discount from 90%.
Despite the recommendations of the Actuarial Committee to reduce the maximum discount to 87%, the Board reduced the maximum discount by 5% to 85%. (See November 26, 2007 FBT article.) The change will go into effect for the July 1, 2008 rate year.
One benefit of the Board’s decision to reduce the group rating maximum discount by 5% is that non-group employers can expect their base rated premiums to drop by about 2.5%. Ohio has been able to offer such huge group rating discounts at the expense of penalty rated employers with poor claims loss histories. The focus of the Board’s decision was to make premiums more equitable for all employers.
Despite the benefit of a 2.5% reduction in base rates for all employers, the 5% reduction in the maximum discount will cost some Ohio employer’s thousands of dollars.
Additionally, the Board will require the BWC to submit a plan to address problems with the composition and continuity of group plans. Many sponsors of group rating plans have strayed from the homogeneity requirements of the group rating legislation, which has led the Board to investigate this matter further.
Ohio employers should contact the Frost Brown Todd LLC Labor and Employment department for recommendations to reduce workers’ compensation premiums.
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Attorney Spotlight
Deborah S. Adams is a member of Frost Brown Todd LLC and practices in the labor and employment law practice group. She represents management in the areas of employment discrimination and wrongful discharge.