Ohio BWC Changes Are Coming…

The Ohio Bureau of Workers’ Compensation is making changes to how they bill private and public employers.  The BWC will be transitioning to a new prospective billing system beginning July 1, 2015 for private employers and January 1, 2016 for public employer taxing districts. The following is a review of the changes that are going to happen starting July 1st:

The BWC currently collects premiums after the coverage period.  In other words, the BWC extends coverage prior to an employer paying for it.  With the switch to prospective billing, the BWC will require payment before it provides coverage.  However, the BWC will cover the transition cost with a transition credit, which means no additional cost to employers.

Why is the BWC changing the way it bills employers, what is wrong with the current way?

There are several reasons that the switch will be made.  The first one, that will benefit the employer, is an overall base-rate reduction of 2 percent for private employers.  Others are:

• Allowing the BWC to better forecast the level of premium required to be collected each policy year
• Creating opportunities for more flexible payment options (up to 12 monthly installments)
• Better opportunities for the BWC to provide quotes online or via the phone, and
• Increased ability for the BWC to detect employer non-compliance and fraud.

How is the BWC going to implement the changes?  

There are several ways the changes will be implemented.  First, the BWC will provide employers with an invoice for their 12-month premium in June of each year.   Next, employers will have the following payment options: monthly (12 installments), bi-monthly (six installments), quarterly (four installments), bi-annually (two installments), and annually (one installment).

For July 1, 2015, private employers will be given a bi-monthly (six installment) payment schedule, with the option to select a different plan by July 15 (May 15 in subsequent years).   Employers may only select their installment options once a year. The option an employer chooses is effective for the entire policy year.  An employer’s coverage will lapse if the BWC does not receive timely payment of an installment.

Employers must reconcile their actual payroll for the prior policy year. The BWC is calling this a payroll true-up.  The true-up will be due 45 days after the close of the policy year.  The BWC will not lapse employers for not reporting the payroll true-up.  However, the BWC will remove employers from their current rating plan or discount program if it does not receive a payroll true-up by the due date.  Also, to be eligible for the “Go-Green” discount, employers must complete the payroll true-up online by the due date.  Any outstanding payroll true-ups will render the employer ineligible for participation in future rating plans or discount programs until the employer submits all outstanding payroll true-ups. Employers must submit payroll true-ups online at www.bwc.ohio.gov, by phone at 1-800-644-6292 or in person at a BWC customer service office.

Private employers will be receiving their first Notice of Estimated Annual Premium very soon…  

There are three important items to pay close attention to when getting ready for the July 1st change:

1. Make sure you don’t miss out on the transition credit.  To receive the transition credit, private employers must be in active, reinstated, or debtor-in-possession status on July 1, 2015.  You must report your January 1, 2015 – June 30, 2015 payroll by August 31, 2015 to receive the transition credit equal to your premium for that time period.  Once you have reported your payroll, the BWC will apply the transition credit to your account.
2. The BWC will start all private employers on a six-installment payment plan.  If you wish to change your installment plan, you have until July 15, 2015 to make your selection online or by calling the BWC at 1-800-644-6292.  The BWC encourages staying on the initial payment plan for the first year, unless there is a significant reason to change.
3. Your estimated premium is based on payroll amounts that were previously provided.  If this payroll is incorrect, or if you anticipate a change in operations that will affect your payroll for the policy period beginning July 1, 2015, notify the BWC at 1-800-644-6292.

We hope this review of the coming changes to the BWC billing system was helpful.  If you need more information, feel free to give us a call at 216.524.8900.