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Workers’ Compensation Coverage for Out-of-State Employees

Ohio companies no longer have to pay premiums in more than one state for the same employees.

PROBLEM: DOUBLE PREMIUMS
Before Senate Bill 334 took effect in September 2008, many Ohio employers who had workers in other states had to pay workers’ compensation premiums in Ohio and in the state where the employees worked. In other words, the employer had to pay twice for coverage for the same employees. Plus, the employer was exposed to having duplicate claims filed in two different states for the same injury.

OHIO EMPLOYER WITH EMPLOYEES HIRED TO WORK IN ANOTHER STATE
Now, if an Ohio employer has workers’ compensation coverage in another state, it will not have to pay Ohio premiums for the out-of-state workers. The Ohio employer can complete form U-131 and provide a copy of the non-Ohio policy to the Ohio BWC. Starting with the 2009 payrolls, the Ohio employer then will report the out-of-state payrolls to the Ohio BWC, but it will not have to pay Ohio premiums for those employees.

NON-OHIO EMPLOYER WITH EMPLOYEES HIRED TO WORK IN OHIO
If a non-Ohio company has workers in Ohio, the company should have Ohio workers’ compensation coverage. Even if the employer’s home state requires coverage for all employees regardless of their work location, it may be prudent to have Ohio coverage and pay the minimum administrative cost every six months in case Ohio is found to have jurisdiction over an injury that occurs in Ohio.

NON OHIO EMPLOYEES WORKING SHORT TERM IN OHIO
The Ohio BWC will recognize out-of-state coverage of employees who are residents of another state, until the employee has worked 90 days or more in Ohio. After 90 days, the employer must obtain Ohio coverage. However, if the other state does not similarly recognize Ohio coverage for Ohio workers temporarily working in its state, then employers in that state who have workers in Ohio must obtain Ohio coverage (reciprocity).

EMPLOYEE CANNOT FILE A CLAIM IN OHIO AND ANOTHER STATE
If an employee is injured while working in another state, and receives benefits and compensation under that state’s workers’ compensation policy, the employee cannot collect benefits from Ohio for the same injury.

This article was originally published in the February-March 2009 NAWBO Cleveland Update.

What does a new business owner need to know about workmen’s compensation?

First, you must have Ohio workers’ compensation coverage for your Ohio employees. Go to the Bureau of Workers’ Compensation (BWC) website at www.ohiobwc.com and click on Apply for Coverage under the orange Employer heading. This will take you to a brief explanation of the application process, and you can download the application to make sure you have all the information required. You can also file your application on line, but you won’t know how much your initial premiums will be until after you have applied. You or your accountant can call the BWC before you apply to find out.

If you are a sole proprietor or partner in a partnership, you can (and should, in my opinion) elect coverage for yourself. If you do the labor yourself, your chances of being injured are higher and your need for coverage is greater. Even if you are office based, you can still be injured in an auto accident driving from meeting a prospect or customer. If you become unable to work, you will need quick treatment and efficient bill payments so you can continue to concentrate on your business. See the July 24, 2009 post for details on minimum and maximum payroll to report.

You will receive a Payroll Report (form DP-21) in late December and late June. Enter the six-month payroll, multiply it times the premium rate, and send it back to the BWC with payment by check or credit card. If you pay by credit card on line, you can choose to pay your premiums every three months, if that is better for your cash flow.

Second, once you file an application for coverage, the BWC will ask you to choose a Managed Care Organization (MCO). This is a company that will manage the medical care of your employees when they file an injury claim. You do not pay the MCO; it is paid a portion of your premiums by the BWC. Every two years, you can easily switch to a different MCO during open enrollment.

You may receive letters from an MCO claiming to be endorsed by the BWC, or creating the impression that it is a division of the Ohio BWC. No MCO is endorsed by or is a part of the BWC. Personally, I avoid doing business with any company that starts off with misleading communications.

And last but not least, the name changed back in 1977 to the Bureau of Workers’ Compensation. It’s easier to say workmen’s compensation, but it’s just not politically correct.