Ohio: Board approves plan to curb extreme premium increases

The Ohio Bureau of Workers' Compensation's board of directors recently approved a cap on premium increases aimed at preventing unforeseen spikes in workers' comp costs.

The cap on employers' experience modifier would limit extreme premium swings in the event of a serious accident or loss of a group-rated premium. An experience modifier is one of the key components in calculating an employer's overall premium rate, measuring the total costs of the claims filed within an experience period.

Large shifts in premiums are detrimental to existing operations and hinder business growth. BWC officials said the capping plan is part of the bureau's ongoing efforts to foster economic growth by stabilizing premiums and providing relief for small businesses that are striving to remain competitive in a difficult economy. The cap, which takes effect on July 1, would permanently provide ongoing pricing stability.

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"As businesses are challenged by the current economy, it is important to address the impact dramatic premium fluctuations have on many employers," said Marsha Ryan, administrator of the BWC. "By increasing the stability and consistency of Ohio's workers' compensation system, BWC will continue to support the growth of business in Ohio and increase our competitiveness with other states."

Ensure employers pay right rate. The board also approved a motion to allow the bureau to explore options designed to create greater equity in the amount Ohio employers are charged for workers' comp coverage. The BWC said it will look for new approaches to ensure employers pay the right rate for the right risk. The bureau will provide the board with regular updates on this initiative before making a final decision.

The board also heard the first reading of a plan to initiate a deductible program that will give employers better control of their workers' comp spending. Under this type of program, an employer would agree to pay the portion of claims below the deductible and receive a premium discount in return. Officials said the proposed creation of a deductible program is one of various initiatives under consideration with target implementation dates as early as July 1.

February 17, 2009

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