workerscompbiz.com

If your company was not group rated during any 12 months between 7/1/2001 and 6/30/2009, you should have received a notice from the Court of Common Pleas of Cuyahoga County regarding the class action lawsuit SAN ALLEN dba Corky & Lenny’s, et al.  I’m not a lawyer, but as I understand it, the lawsuit has been filed alleging that the BWC charged excessive premium rates that were prejudicial to non-group rated employers.

 The BWC denies that it owes money to the members of the class and denies that its rating system is prejudicial to non-group rated employers.

 Of course non-group rated employers paid higher premium rates than group rated employers.  But the court will decide if it was unlawful and if monies are due to non-group rated employers.

I’m staying in the class, even though I doubt that the BWC will have to pay refunds to non-group rated employers.

Normally, I don’t like to insult the BWC.  I’ve been working with it since 1981, and it has made terrific improvements.  The people who work there are generally knowledgeable and helpful.

But here’s a situation with sole proprietors and partners that is ridiculous, unfair, and a complete waste of time.

As background, you should know that, when calculating premiums, sole proprietors and partners who have elected coverage for themselves have to report a weekly minimum payroll.  The amount of the weekly minimum payroll is printed on the back of the Payroll Report that is sent out every six months.  You multiply the weekly minimum payroll times 26 weeks, multiply that times the premium rate, and then pay that premium amount to the BWC.  You report that supplemental coverage payroll on a separate line on the Payroll Report.

There are two exceptions to the above background:  You have to pay at least $50 every six months even if the premium you calculated is less than that.  And, if you pay online, the BWC doesn’t send a Payroll Report, it sends you a postcard reminding you to pay online.

Nowhere on the webpage where you calculate your premiums does the BWC indicate how much the weekly minimum is.  So, you have no idea whether it has changed since the last time you paid.

Now here’s the really nutty part:  if you don’t REPORT the correct minimum amount, the BWC CANCELS YOUR SUPPLEMENTAL COVERAGE.  It doesn’t matter if reporting the correct amount is STILL less than $50 and you’ve paid $50.  Cancelling the coverage means that the sole proprietor or partner will not be covered in the case of a work related injury.

Adding insult to injury, the sole proprietor or partner has to REAPPLY for supplemental coverage.

If a corporation doesn’t report the correct payroll, the BWC does not cancel coverage.  When an audit reveals incorrect payroll reporting, the corporation gets an invoice and 30 days to pay.  Why are sole proprietors and partners singled out for minimum payroll reporting and cancellation without notice?

Here’s an easy fix:  make sure that the online box for supplemental coverage payroll cannot show less than 26 weeks times the minimum weekly amount.  The BWC could also put the new minimum weekly amount in BOLD on the reminder postcard.

One final thought:  if I don’t reapply for supplemental coverage, will the BWC automatically refund the $50 premium already paid, or would I have to ask for it?

You may have received a renewal invoice from your current group rating TPA.  DON’T PAY IT YET!

Until further notice, the BWC has forbidden sponsors and TPAs from providing any discount levels and projected savings in their communications with customers and prospects.

Without a discount level, you can’t know whether your current group rating program will be the best for you next year.  Are you really sure that your company will be eligible for group rating next year?  If you pay now, can you get a refund if you change to a different group or the TPA doesn’t have a group for your company?  Three years ago, the BWC instituted a break even factor that eliminated groups with discounts less than 30%.  Don’t gamble by paying a fee for a service that may not be available.

The BWC is deciding whether to continue with 51% as the maximum discount.  And it is reviewing all its employer incentive programs, including whether to continue “stacking” programs for additional discounts.

The renewal invoice you receive should indicate 2012-2013.  If the invoice doesn’t say what services it includes or what period of time it covers, don’t pay it.  (If your accounts payable person routinely pays invoices that are not specific, you have a bigger problem than just getting the best group rating discount!)

A northeast Ohio business owner stopped paying his premiums in 2006.  In the five years since then, his employees filed 25 claims for work-related injuries.  The owner now owes more than $600,000 in unpaid premiums, claims costs, penalties and interest.

The BWC worked with the owner but he continued to operate his business without paying its premiums.  The BWC paid for the medical services and compensation for the injured employees.  Those costs were billed to the business, and the owner didn’t pay them either.

The court found the owner guilty of two counts of failure to comply with workers’ comp law.  He was sentenced to 90 days in jail (suspended), one year of active probation and 80 hours of community work service.

Now the BWC is seeking an injunction to make him stop operating the business until he becomes fully compliant with Ohio workers’ comp law.  If the injunction is granted, his employees will be laid off and his customers will go elsewhere.  He won’t have any income from the business, either.  And Ohio employers who pay their premiums will continue to bear the costs of his employees’ claims.

If you know of any workers’ comp premium deadbeats, turn them in!

Make a call to the BWC fraud unit at 800-OHIOBWC or 800-644-6292, and choose option 4.  Or go to www.ohiobwc.com and click on Report Fraud at the bottom of the home page.  You can remain anonymous.

The BWC is seriously pursuing business owners who let their workers’ comp coverage lapse and fail to reinstate it, or employers who have never gotten coverage at all.

When employers are found guilty, the judges are ordering jail time, probation, payment of back premiums, reimbursement of BWC investigation costs, and fines.

This may sound harsh to any business owner who has ever had occasional cash flow challenges.  But deadbeat employers harm you in two ways.  First, they can undercut their competitors because of their lower costs of doing business.  Second, the cost of claims filed against deadbeat employers are included in the premiums paid by every non-deadbeat employer.

I don’t advocate a business war, but if your competitors don’t pay for workers’ comp coverage, turn them in!

Make a call to the BWC fraud unit at 800-OHIOBWC or 800-644-6292, and choose option 4.  Or go to www.ohiobwc.com and scroll down to Report Fraud at the bottom of the home page.  You can remain anonymous.

If a claim occurs during a period of time when the employer did not pay its premiums, or if a claim occurs and an employer does not have Ohio workers’ comp coverage, the claim is called a “non-compliance” claim, because the employer has not complied with the law that states all Ohio employers must have workers’ comp coverage for their employees.

The BWC pays the claim costs and then bills the employer for those costs.  If the employer does not pay the bills, the Ohio Attorney General places a lien on the business, which has to be paid before the business can be sold.  Some supplier agreements forbid a company to have liens placed against it.

When an employer has coverage, the initial five years of claim costs are spread out over four years of premiums, and any subsequent claim costs are paid out of the surplus fund. 

The costs for non-compliance claims are billed back to the employer for the life of the claim.  If the injury is severe and the claimant is awarded compensation, the employer pays those costs, too.

Here’s something I’ve never seen before:  Someone was found guilty for filing a false workers’ compensation claim!

The claimant was involved in a motor vehicle accident the weekend before claiming he hurt his low back at work loading a truck.  The medical records showed he gave inconsistent descriptions of how he was hurt.  The BWC disallowed the claim.  The fraud unit investigated.  He pleaded guilty to workers’ compensation fraud for filing a false claim.  The judge ordered him to serve one year on probation and to pay $2,072.31 in investigation costs.

Thought #1:  It’s a minor miracle that the BWC disallowed the claim.

Thought #2:  The employer should have also been reimbursed for its costs in fighting the claim.

Thought #3:  It’s a bad idea to call everyone who files a claim an “injured worker”.  Let’s go back to the original term which was “claimant”.

A press release from the Governor’s office dated April 28, 2011 was titled KASICH ANNOUNCES $65 MILLION WORKERS’ COMPENSATION RATE CUT.  “Governor John R Kasich today announced he is seeking an overall 4 percent cut in workers’ compensation base rates for a total cut in premiums of approximately $65 million annually.”  A close reading of it states that he is requesting an overall 4% reduction in workers’ comp base rates, effective 7/1/11.

 Attached to the press release is a BWC fact sheet that states rates are determined in consultation with Deloitte Consulting LLP.  “Factors in the decision to lower rates included a trend of decreasing claims frequency, as well as positive investment returns.”

Every year, the BWC recommends new base rates and all the other rates and fees (expected loss rates, administrative fees, etc.) to the Workers’ Compensation Board.  After the Board approves the new rates, the BWC publishes all the new rates and fees. 

As always, some base rates will increase and some will decrease.  And just because the base rates go down doesn’t mean premium rates will decrease.  See ELR – Dirty Little Secret posted 1/14/10.

Since all this is the normal procedure for establishing workers’ comp rates in Ohio, should an elected official take credit for “saving” Ohio employers $65 million?

RED ALERT!

Workers’ compensation premiums are due by February 28 every year. If those premiums are not paid by April 1, or a payment plan is not agreed upon between you and the BWC, your company will not be included in group rating starting July 1.

(If premiums are not paid on time, the coverage for the employer will lapse. See the post titled Lapsed Coverage: Who Cares? for an explanation of the consequences.)

This is the BWC’s carrot-and-stick technique to get employers to pay their premiums on time: group rating discounts are the carrot, and elimination from group rating is the stick.

True story: A company owner did not pay the premiums due by the end of February. He got an invoice dated March 15 from the BWC which gave him 30 days to pay. He paid the premiums 20 days later. He was unpleasantly surprised when he was eliminated from group rating on July 1 because he hadn’t paid by April 1. The invoice did not mention that consequence.

Paying premiums later than the August 31 due date does not impact group rating participation, as long as your coverage has not lapsed for more than 40 days in the 12 months prior to the February 28 payment deadline.

If you have already paid a fee to join a group but the BWC kicks you out of group rating due to late premium payment, you may be able to get some of the fee refunded.

Bonnie R Fraser

The rules for prescription drug payments specifically mention infertility drugs when they are included as part of a comprehensive plan.

What is the rationale for this? Is there case law?

Will the BWC also pay for prenatal, delivery and post partum services when the drugs work? Will the BWC pay adoption fees if the infertility drugs don’t work? If the claimant is collecting TT compensation, the employer will be paying for the claimant to have and raise children. The claimant is unable to work, but can raise children?