January 27, 2009
Group Rating Deadline Extended Due to Proposal
In a surprising move, on January 23, 2009, the Bureau of Workers' Compensation (BWC) extended the 2009-10 group rating deadline from February 28, 2009 to April 24, 2009. The goal of the BWC is to "charge the right rate for the right risk." To accomplish this, the BWC’s Board has approved a motion for the BWC staff to explore different methodology in determining an employer’s rates. Since these potential changes could mean a shift in group savings, the Board is allowing more time for sponsoring organizations to quote and file groups.
Also, the Board has voted no on a group rating capping proposal. In July of 2008, the Board approved a maximum savings reduction from 85% to 77%. To offset the cut in savings, BWC staff recommended qualifying employers would only see a 30% increase in their experience modifier. Instead of a 77% maximum savings, top tier employers would have received an 80% savings. However, the Board has turned down this recommendation.
Finally, to achieve a $150 million to $200 million reduction in premiums of non-group employers, the BWC proposes doing away with other savings programs amounting to $70 million and increasing group employers’ overall premiums $70 million. The BWC is considering an overall 30% reduction in base rates, and as a result, additional up front discounts may not be necessary. Many of the current discount programs, such as the Drug Free Workplace and Premium Discount Program, are under review and may change.
Due to the last minute potential changes, our goal is to keep our partners and clients informed. We hope the BWC and the Board finalize rating models at the meetings on February 19th and 20th. Until then, keep in mind that if your company qualifies for group rating, the quotes you have received before January 23, 2009 may be inaccurate.
Please contact our offices for a full review of your potential savings. Managing workers’ compensation insurance in the State of Ohio can be confusing, but we are here to help. We can be reached at 877-765-4200 or by email at .
Jennifer Pillitiere
Director of Operations
Benefits 1 Group
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