Snyder and Associates

 

Tax Byte

TaxByte #20: Navigating the BWC Cafe

The State of Ohio requires employers to have coverage thru Ohio Bureau of Workers’ Compensation (BWC).  While many states have opted to privatize workers’ compensation coverage, Ohio is one of only four states in the US to still have a state-run program.  Workers’ compensation is essentially state required insurance that provides wage replacement and medical benefits to employees injured on the job.

 

BWC premiums are based on the employee’s wages and the particular industry and job classification they work in.  Rates are based on the degree of risk of injury for each employee’s duties, and a base factor to cover the state’s administrative costs. For example, a construction employee will have a much higher rate than an office employee. Classifying employees correctly is very important.

 

In an attempt to keep premiums affordable, Ohio’s BWC offers a number of programs, as well as discounts for things such as electronic and timely filing.  Many of these programs and discounts can be combined to offer maximum savings. Some cannot. Navigating the maze of options, and which programs can or cannot be combined, can be challenging.

 

Each program has separate guidelines and compliance requirements, range from attending safety meetings to implementing drug and alcohol abuse policies.  Signup deadlines for these programs vary, from the end of February through October.  We encourage employers to find a Third Party Administrator (TPA) that will proactively help the employer choose and manage programs to provide the maximum discount. 

 

BWC’s most popular program is Group Rating.  In this program, TPA’s combine employers and their respective claims experiences into larger groups. In doing so they spread the claims over a larger pool, and can reduce the premium rate paid by each employer in the group. The savings can be in excess of 50% of what employers would pay based on their single experience.   Employers can be quickly disqualified from Group Rating however, even if they have just one significant claim.  This causes a significant increase in workers comp premiums for the business.

 

If this happens, employers should work immediately and proactively with their TPA’s to find other discount programs, such as the One-Claim and Group Retro programs.  These programs do not match the savings of Group Rating, but offer some discount. Some is always better than none. The key is to be proactive and watch filing deadlines. These are hard deadlines though so it pays, literally, to be proactive.

 

We do not provide TPA services, but we do work with most of them as part of assisting our clients.  We can refer you to a TPA and/or discuss the different BWC program options that may be available to your unique situation. 

 

Hope you had a Happy St. Patty’s Day! As always, we’re here when you need us.


 

Stephanie Brown,

AVA, Account Manager, QuickBooks Coordinator

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