Governor Kasich recently announced plans to return approximately $1 billion of worker's compensation funds back to the businesses which paid them. In addition to the refund, the proposal also includes plans to make alterations to the way worker's compensation benefits are determined and distributed. Before the payment and alterations become a reality, however, the board of the Ohio Bureau of Workers' Compensation must meet and approve the proposal.
According to a spokesperson for the BWC, the $1 billion would be funded by the dividends of investments which had significantly higher returns than were originally anticipated. If approved, these dividend payments would be distributed amongst all 210,000 clients of the BWC, regardless of whether they are publicly or privately owned. The hope, expressed by Governor Kasich and a spokesperson for the BWC, is that the returned dividends will help stimulate economic growth throughout the state.
The proposal would also make a significant change in the way workers compensation claims are paid out, shifting it from a retrospective system to a prospective system. Retrospective systems pay out claims after medical procedures have been completed and the costs are accumulated. Prospective systems, on the other hand, make payments beforehand based on calculations of the typical cost of certain procedures. Financially speaking, this change is estimated to save employers approximately 2 to 4 percent on their premiums.
The BWC says if the proposal is approved, the changes would likely not come into effect until July of 2014. Details on how long-term workers compensation claims or those with benefits claims at the time of the switch over will be handled is currently unknown. However, by getting the right information about workers compensation benefits in advance of the change, individuals may be able to avoid any unwanted complications.
Source: Insurance Journal, "Ohio Workers' Comp Fund Plans to Return $1 Billion to Employers," Stephanie K. Jones, May 2, 2013
No Comments