The Ohio Bureau of Workers’ Compensation (BWC) has proposed a 2.1 percent base-rate reduction for private employers.
The recommendation to its board of directors would reduce employer premiums by $29 million for the July 1, 2014, policy year, the BWC said.
If approved, it would be the third year in a row that workers’ compensation insurance rates have remained steady or dropped.
Ohio’s workers’ compensation rate reductions over the last three years come at a time when the National Council on Compensation Insurance reports that nationally, states with rate increases are outnumbering states with decreases, according to the BWC’s announcement.
The proposal was presented to the board’s actuarial committee, and is for the 2014 policy year, which runs July 1, 2013 – June 30, 2014.
It represents an aggregate savings of $29 million over 2013 premium collections, and would bring the three year savings for Ohio businesses to an estimated $224 million. The three year savings is based on comparisons to 2011 rates and assumes a flat payroll, which is the basis for establishing premium.
Employers saw a 4 percent rate decrease in 2012 and flat rates in 2013.
The actual premium paid by individual private employers depends on a number of factors, including their industry, their recent claims history and expected future costs, and their participation in discount and savings programs.
The board’s audit committee also heard a proposal to maintain the bureau’s discount rate at 4 percent. The discount rate reflects the assumed future rate of return on investments and is factored into the bureau’s reserve levels and premium pricing.
BWC is a non general-revenue fund state agency that provides workers’ compensation insurance for 250,000 Ohio employers and covers approximately two-thirds of Ohio’s workforce. With approximately $1.9 billion in annual premium and assessment income, BWC is the largest state-fund system in the United States and one of the top 10 underwriters of workers’ compensation insurance in the nation.
BWC processed more than 115,000 new claims and paid approximately $2 billion on roughly one million open claims in 2012. BWC’s mission is to protect Ohio’s workers and employers through the prevention, care and management of workplace injuries and illnesses at fair rates.
Source: Ohio BWC
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