Along with the Mid-Biennium Budget Review and other education related bills signed into law earlier this summer, HB 493 became law and becomes effective on September 17, 2014. This bill focuses solely on the workers compensation system and impacts all employers, including school districts. These are mostly fiscal changes and some of the highlights are as follows:
1. Requires, rather than permits as under former law, the Administrator of Workers’ Compensation (the “Administrator”) to calculate workers’ compensation premiums for most employers on a prospective, rather than retrospective, basis, beginning policy year 2015. Public employers, other than state agencies, will transition to prospective payment of premiums by the policy year commencing on January 1, 2017.
2. Allows the Administrator to adopt rules to permit periodic premium payments and to set an administrative fee for these periodic payments.
3. Revises the requirements for qualified public sector payroll reports. For each policy year commencing on or after January 1, 2016, BWC must to furnish to the fiscal officer of each taxing district public employer (which includes school districts), by November 1, forms showing the estimated premium due from the public employer for the forthcoming policy year. On or before February 15 immediately following the conclusion of a policy year, the fiscal officer must report the amount of money expended by the public employer during the policy year for the services of employees covered by Ohio’s Workers’ Compensation Law. BWC must then reconcile the report with the premiums and assessments charged to the public employer to account for the difference between estimated gross payroll and the actual gross payroll. The public employer must immediately pay any balance due to BWC, and any balance found due to the public employer must be credited to the public employer’s account.
4. Increases, beginning in policy year 2015, the additional amount of premium or assessment due from an employer who fails to timely submit a payroll report from 1% of the amount due to 10% of the amount due and eliminates the cap for the penalty amount.
5. Requires, beginning in policy year 2015, the Administrator to adopt a rule to allow the Administrator to assess a penalty on an employer who fails to pay a premium or assessment when due at the interest rate established by the State Tax Commissioner for most delinquent taxes and eliminates the existing tiered penalty system.
6. Eliminates the requirement to obtain Ohio coverage for an out-of-state employee who temporarily works in Ohio if the employee’s home state law lacks a provision similar to the Ohio law that exempts out-of-state employees temporarily working in Ohio from the duty to obtain Ohio coverage.
7. Allows the Administrator to pay for the first fill of prescriptions occurring during an earlier timeframe than under continuing law (normally after either the Staff Hearing Officers determination of the issue or the final judicial determination, if applicable). The Bill also allows for the first fill of prescriptions to be charged to the Surplus Fund Account if the claim is ultimately denied and the employer is a state fund employer who pays assessments into that account.
8. Eliminates the requirement that most self-insuring public employers annually obtain an actuarial report certifying the sufficiency of reserved funds to cover the costs that the employer may potentially incur under Ohio’s Workers’ Compensation Law and the reliability of computations and statements made with regard to those funds.
9. Permits a state fund, taxing district employer (which includes a school district) to participate in the “One Claim Program.” Under that Program, the employer may mitigate the impact of a significant claim that comes into the employer’s experience for the first time and that is a contributing factor in the employer being excluded from a group-rated plan under the BWC’s group rating program. Under former law, only private sector state fund employers could participate in the One Claim Program.
Please feel free to contact us to discuss these or any other changes and for general workers’ compensation related inquiries.