The state fund for injured workers has increased to $1.2 billion the amount of savings it will provide to employers on their workers’ compensation premiums as part of the move to a new method of billing them for premiums.
The state’s private employers and local governments will see this amount in terms of credits on their bills, the Ohio Bureau of Workers’ Compensation said. Last year, when the bureau announced the switch to the new billing system, it said it was setting aside $900 million for the program.
The bureau is moving to a billing method in which employers will begin to pay premiums upfront, as is common throughout the insurance industry, instead of after a coverage period as the bureau traditionally has done.
But the bureau wanted to assist employers so that they wouldn’t be hit with two bills at once during the move.
When announcing the change in the billing system last year, the bureau also issued $1 billion in rebates in 2013.
This week, bureau staff also recommended a 6.3 percent cut in premiums that would go into effect July 1 and save employers $91 million.
The cut would mark the eighth straight year in which private-sector rates have either dropped or remained flat. Rates for public employers, which were reduced beginning Jan. 1, are now at their lowest level in at least 30 years.
How much employers will save depends on many factors, including the industry they’re in, their recent claims history and their participation in various discount and savings programs.
“There are several trends coming to work here, and they are all benefiting Ohio employers when it comes to rates,” said Steve Buehrer, the bureau’s administrator and CEO.
Buehrer said falling claims, improving safety performance, lower-than-expected medical inflation and strong investment performance have bolstered the bureau’s finances.
Increasing the credits to $1.2 billion will help employers in the move to the new billing system, he said.
“Hopefully, it will be a very seamless transition for Ohio employers,” he said.
The Ohio Chamber of Commerce praised the cuts in rates and the transition to the new billing system.
“We welcome the reduction in base rates for private employers,” said Sean Chichelli, the chamber’s director of labor and human-resource policy. “It’s great news. These cuts represent a series of reductions over the last few years that provide relief for employers.”
The transition to the new billing system takes effect on July 1, 2015, for private employers and on Jan. 1, 2016, for public employers.
By Mark Williams - The Columbus Dispatch, Ohio (MCT)
©2014 The Columbus Dispatch (Columbus, Ohio)
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