March 3, 2010

The Ohio Bureau of Workers’ Compensation has announced changes in the transition rules for the MIRA II reserving system. The transition rules reduced or eliminated reserves associated with medical-only claims, claims with salary continuation payments and claims with living maintenance as the last paid compensation.

Below is a summary of the changes made to the transition rules.

Medical Only Claims: Starting in July 2010, all medical only claims will be eligible for a reserve and will first be used for rate making purposes for the Private Employer 7-1-2011 policy year (or claims cost as of 12-31-2010).  The new reserves will be displayed via the BWC web on the MIRA II reserve screens for each weekly reserve prediction and will be included on the quarterly claim cost reports as of 9-30-2010.   Claims in the $15,000 medical only program will not be eligible for a reserve until BWC medical payments are made or the claim is removed from the program.

Salary Continuation Claims with Date of Injury January 1, 2011 and after will be eligible for a claim reserve (both a medical and indemnity reserve).  However the MIRA II stop logic will continue to be applied as in every other claim processed through the MIRA II system.

• Claims with salary continuation payments as the only indemnity payments will most likely not see an indemnity reserve due to the stop logic; however salary continuation claims with ongoing medical will most likely see a medical reserve.
• Claims with salary continuation payments and subsequent BWC paid indemnity will be reserved as in the past, with the exception of the salary continuation payment total will be applied as a "credit" against the Temporary Total prediction only and will no longer be applied against the entire claim Total Incurred cost prediction.

Living Maintenance Claims: Starting in July 2010, claims with Living Maintenance or Living Maintenance Wage Loss as the last paid indemnity (as of the survey date) will no longer have the original (calculated) reserve, reduced by 50%. The new reserves will be displayed via the BWC web on the MIRA II reserve screens for each weekly reserve prediction and will be included on the quarterly claim cost reports as of 9-30-2010.

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