Ohio’s BWC’s done it again. Or shall I say haven’t even bothered to do it!
They haven’t a clue. They’ve changed the way employers in Ohio injury claims are being assessed effective July 1, 2010.
Now medical only claims are being reserved adding additional costs into our assessment calculations for rate premiums. Medical charges were always included but only the indemnity paid out got the reserve. The option of continuing wages in lieu of TT compensation from the BWC, as an option to control individual claim costs has also been squeezed away from employers. Wage continuation is still an option but the BWC has put exclusions on it.
Wage continuation can still be paid on lost time claims but it will not suppress the reserve as it did in the past. Also, wage continuation is not compatible, or permitted with some of the other BWC cost saving programs such as the new Drug Free Safety Program (another squeeze to Ohio employers).
Before, if one was a state funded employer, only claims that had lost time - injuries where the employee was off more than seven days – were the only claims that assessed a reserve. If an employer accepted the responsibility of paying wages (wage continuation) and/or the employee was returned to work (albeit in a light duty capacity) the claim charges were minimized by avoiding the added associated reserve – a win win for both the employer and the injured worker (the IW didn’t have to wait and wait and wait for the state to pay their wages).
Reserves are assessed to cover present and future liability of the claim. Reserves is the insurance for the insurance. I get this.
So now both the medical and potential wages until the IW is returned to work (could be light duty) via medical provider has a reserve calculation.
I first thought this was good fiscal thinking after all one never knows if the initial medical is the end all/fix all means to the injury. There are many instances when the initial medical is just a band aid for something deeper and more severe than originally diagnosed. Deeper issues could develop years later (which is why we carry our history for four years).
I agreed with this in part seeing workers’ compensation as an insurance company and knowing business is business. Insurance companies need at the very minimum a break even point if they are to survive. If the medical only costs and the potential wages weren’t projected and included into the reserve calculations I could understand how a financial loss could occur (which it hasn’t which is why they’ve reduced the manual rates. Oh, aren’t they wonderful? See what good they’ve done for Ohio employers?).
But how much of each part of the claim is to be reserved? Is the reserve split 50/50 (medical/indemnity). If so, wage continuation, if compatible with other BWC programs the employer may be enrolled in, may still be attractive and a way to minimize costs.
Employers need to know this to better assess and control the cost of the claim if they are state funded (opposed to being self-insured which for most employers is prohibited - minimum of 500 employees, certified financials from previous years, and many other criteria that the majority of Ohio employers cannot meet).
The answer: no one knows as the BWC hasn’t provided an answer.
No one knows!
No TPA knows, no Workers’ Compensation attorney knows, no BWC Employer Services Representative knows because the Administrator to the BWC hasn’t figured it out!~
HELLO?? Is anybody home? Goven’r what are you doing – other than trying to privatize the BWC while saving your job?
The largest fiscal burden any employer in the State of Ohio must endure and no one has an answer months after they’ve rewritten the code?
How will we, the businesses of Ohio, the economic foundation of Ohio (excepting the Cleveland Clinic of course) manage, control, budget and balance our books when the BWC hasn’t a clue? I can better understand why Ohio’s lost so many businesses and can’t attract new. It’s really not an employer friendly state.
I guess it’s more interesting to watch Cuyahoga’s corruption since Columbus is too low key to draw attention!