BWC to Lower Group Rating Discounts for Ohio Employers

The BWC board members will be meeting later this month to finalize some proposed changes for the 2010 rate year. The BWC is continuing its efforts to establish more rating equity in the system between non-group and group rated employers. Once the BWC finalizes these proposed changes, ORM will begin providing 2010 Group Rating projections and/or rate consultation to our current clients.

Some BWC proposed changes:


1. The BWC is considering reducing the base rates for the 2010 rate year.

2. The maximum Group Rating discount for 2010 will be dropping from 77% to 65% for private employers. Some employers eligible for 2010 group rating may actually find a larger discount remaining outside of group rating, considering the base rate reductions and other program participation.

3. A Break Even Factor (BEF) will be applied again for the 2010 rate year. As you may recall, the BEF’s purpose is to offset the base rate reductions for employers that are eligible for group rating, and is applied after the group rating discount is determined. This means that a private employer with no claims in the experience period qualifying for a maximum 65% discount would actually receive about a 51% discount once the BEF is applied.

4. The BWC is planning to apply reserves to all Medical Only claims within the current and future 5 year experience period to impact rate determination beginning in 2011. This has the potential to include medical claims in the $15K Medical Deductible Program. This potential reserve, coupled with new federal Medicare/Medicaid reporting requirements, dramatically reduce the return on investment value of the $15K program.

If you are currently enrolled in the $15K Program, we strongly encourage careful consideration of continued participation in this program based on these new proposals and regulations.

5. The BWC will begin applying MIRA Reserves to claims where the employer has paid salary continuation in lieu of Temporary Total Compensation, affecting rate determination beginning in 2011. The BWC will not suppress these reserves as they have in the past. Although this will likely decrease overall cost savings seen in previous years for employers utilizing this option, salary continuation may still offer viable savings for some employers.

ORM will continue to provide you with assistance in determining which options are best for your company as we assess this evolving information. We will look at all options to help you determine the best financial solution possible.

If you have questions regarding any of the BWC Programs or proposed changes, please do not hesitate to call Brandy Jordan directly at (614)602-8273.

Stay tuned for further updates as we get them.