Once again the Ohio Bureau of Workers’ Compensation (BWC) is infusing more than $1 billion into Ohio’s economy. Unlike the printed checks state funded employers received in 2014, they will see their share of the $1.2 billion in the form of premium credit this July. But, employers must take steps before June 30th to ensure that they maximize the amount of premium credit they receive.

Employers with lapsed coverage must take the following steps to ensure eligibility for the transition credit:

  • Report unreported payroll for currently lapsed payroll periods;
  • Pay any outstanding premium, late fees and penalties for assessed premium, or;
  • Request a payment plan for any premium amounts that cannot be paid in full.

For decades, BWC has billed employers in arrears for the previous six months of insurance coverage. The new prospective billing system will take effect on July 1 for private employers and January 1, 2016 for public employers. Under the new prospective billing system private businesses will be billed prior to receiving coverage. BWC will begin sending private employers their first notice of estimated annual premium in early June for the 2015 policy year. Click here for a sample provided by BWC. Private employers’ first payment under prospective billing system will be due August 31.

Private employers in an “active” status by July 1 are eligible to receive a credit for eight months of workers’ compensation coverage as part of BWC’s switch to prospective billing. Therefore, the credit will cover the six month premium payment for January through June 2015 as well as the July and August 2015 payment (or 1/6th of a company’s annual premium). Active status includes being up-to-date on payments. Employers that are not in active status need to contact BWC to establish a payment plan to come into compliance and be eligible for the credit. Private employers will be able to pay for their annual workers’ compensation premiums in two, four, six or twelve installments under the new system.

Prospective billing is the standard methodology in most of the private insurance market throughout the world. BWC has stated that the benefits of the new system include: (1) permitting another overall base rate reduction of two percent; (2) allowing it to better forecast the level of premium required to be collected each year; (3) increasing its ability to detect employer non-compliance and fraud; and (4) providing it better opportunities for it to provide quotes online or by phone.

How can Kegler Brown help? 

Active employers will need to remain vigilant about managing existing workplace injuries and preventing new ones from occurring. Why? Under prospective billing BWC will undergo a payroll “true-up” process after the policy year ends to ensure the proper premium was paid. Therefore, employers need to pay close attention to safety and discount program deadlines such as group rating (11/23/15), group retrospective rating, one claim, individual retrospective rating and deductible enrollment (1/29/16) to maximize premium savings throughout the year. State funded employers should do as much as possible to prevent injuries from occurring. But, accidents will happen. When they do occur the Kegler Brown workers’ compensation attorneys are here to help employers navigate the legitimate claims from those without merit.

Still have questions about prospective billing? 

BWC is offering free prospective billing webinars and seminars across the state. More information is available at bwc.ohio.gov. Employers with questions can call 1-800-644-6292 or email bwcprospectivebilling@bwc.state.oh.us.