The Ohio Bureau of Workers’ Compensation’s appeal of a Cuyahoga County judge’s decision awarding $860 Million in damages to a class of employers has been rejected by the Court of Appeals. “Reduced to its irreducible essence, this appeal is about a cabal of Ohio Bureau of Workers’ Compensation bureaucrats and lobbyists for group sponsors who rigged workers’ compensation insurance premium rates so that for employers who participated in the BWC’s group rating plan, it was a “heads we win,” and for employers who did not participate in the group rating plan, it was “tails you lose.” That is the first line of a legally complex (and lengthy) opinion by Presiding Judge Kenneth Rocco affirming the trial judge’s decision that the BWC’s group rating plan created an unlawful rating system. Needless to say, the remainder of Judge Rocco’s opinion was not supportive of the Bureau’s position. 

The trial court decision found that the Ohio Bureau of Worker’s Compensation charged excessive workers’ compensation premiums to a class of non-group rated private employers. The class of non-group rated employers is limited to those who were not in a group rating plan from 2001 to 2009. Essentially, these were employers who never qualified for group rating or were thrown out of a group after having a claim. The Court of Appeals went beyond that class to allow what it termed migrating employers—those who may have been in and out of the group during that 8 year time frame—to also be included in a restitution award. The opinion affirmed the damages calculation by the trial court but, in a bit of a twist, the Court of Appeals sent the case back to the trial court to calculate restitution to include these so-called migrating employers.

The court agreed with the BWC that its group rating plan did not violate the equal protection clause and further rejected the class’s attempt to increase the restitution calculation. This was small consolation to the Bureau in light of the opinion that the Bureau subsidized its huge premium discounts on the backs of the employers who were not eligible for group rating.

The Court of Appeals opinion by Judge Rocco is a detailed account of the legal arguments presented by both sides but is probably more noteworthy for its attack on the Bureau’s premium rating plan designers and what it saw as the BWC’s fifteen year rejection of its actuarial consultants’ recommendations in order to further an inequitable rating system. An appeal by the Bureau of Workers’ Compensation to the Ohio Supreme Court is all but guaranteed. The big question is whether the Court wants to dive into this morass or leave well enough alone.