BWC Update

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BWC Update

• July 10, 2009
• Troy Boughan
• BWC Business Consultant

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Ongoing reform

• BWC wants to make Ohios workers compensation
  system an asset for economic development
• Transition employers towards paying more
  appropriate rates relative to the risk they bring
  to the system
• Provide performance-based discount programs that
  allow businesses to reduce premiums through
  performance

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Transitioning to more appropriate rates

• BWC wants to offer more competitive base rates
• The primary factor driving premium amounts should
  be the projected future risk a business brings to
  the system

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Improvements to group rating

• Workers Compensation Board of Directors approved
  maximum discount at 77 percent beginning July 1,
  2009
• Intended to reduce base rates and result in more
  equitable rates for all employers, more closely
  reflecting the risk they bring to the system

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Transitioning to more appropriate rates
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Transitioning to more appropriate rates
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Group Experience Rating

• Group Participants Cannot
• Stack Drug-Free Workplace Discount
• Stack Safety Council Rebates
• Participate in Group Retrospective Rating
• Group Participants Can
• Stack Deductible Program Discount

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Transitioning to more appropriate rates

• BWC also wants to prevent extreme economic
  hardship that results from premium volatility
• Caps an employers Experience Modifier increase
  to 100 from one year to the next.
• Employers Individual EM must exceed 100
• Employer must implement the BWC 10-Step Business
  Plan
• Employer must be in good standing with BWC

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• BWC is creating new, performance-based incentive
  and discount options for employers
• Provide menu of discount, incentive options for
  employers to better manage risks and premium
  costs
• Provides claims management services to entire
  employer market
• Allows employers to more effectively reduce costs
  by promoting safety in the workplace

Deductible Program
Group Retro
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Deductible Program

• Available for the July 1, 2009 policy year
• Allows employers to reduce their premium costs in
  exchange for bearing more individual risk for
  claims
• Employers may select the following per claim
  deductible amounts
• 500
• 1,000
• 2,500
• 5,000
• 10,000

Deductible Program
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Deductible Program
Deductible Program

• Offers discounts ranging from 1.4 to 26
• Discount determined by deductible amount selected
  and the NCCI Hazard Group
• Deductible Program discount applied prior to any
  other program discount.
• Deductible Program discount does not apply to
  administrative cost assessment or DWRF
  assessments.

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Group Retro

• Similar program offered by Washington States
  monopolistic workers compensation system
• Enables similar employers to group together and
  attempt to control costs relative to losses they
  are projected to incur
• Better performing groups may receive a refund
• Less effective groups may pay additional premiums

Group Retro
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Group Retro
Group Retro

• Does not replace Group Experience Rating
• An option for employers whose claims
• experience prevents participation in
• group experience rating.
• Program available beginning July 1, 2009
• Applications must be received by June 26 for
  the 2009
• policy year.

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Group Retro
Group Retro

• Each Group Retro member has an individual EM
• Each Group Retro member pays its individual
  premium based on its EM

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Group Retro
Group Retro

• Group Standard Premium
• The combined premium paid by all members for the
  given coverage period, excluding the Disabled
  Workers Relief Fund and Administrative Cost
  assessments.

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Group Retro
Group Retro

• Group Retrospective Premium
• Calculated based on the developed incurred losses
  of the group.
• Incurred losses used in calculating the
  retrospective premium are limited to 500,000 per
  claim.

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Group Retro
Group Retro

• Group Retrospective Premium will be calculated
  three times
• 12 months, 24 months and 36 months following the
  end of the group retro policy year.

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Group Retro
Group Retro

• If Group Retrospective Premium is less than the
  Group Standard Premium, group will receive a
  rebate.
• If Group Retrospective Premium is greater than
  the Group Standard Premium, the group will
  receive a bill.

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• What does the future hold?
• Additional Programming
• High Deductible Program
• Individual Incurred Losses Retro Program
• Split Experience Rating

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• Questions