OH State Fund Rebate: To the Tune of $1B

Columbus, OH (WorkersCompensation.com) - There is a rebate, and then there is a $1 billion-rebate.

A billion-dollar recompense, well that is something to brag about, which is exactly what educational, government and small representatives throughout Ohio are doing while the Bureau of Workers' Compensation (BWC) considers handing back $1 billion to the agencies.

According to Jeff Gruber, Canton City School District treasurer, the school system is thrilled with the rebate. "Canton City Schools is very excited to hear the Ohio Bureau of Workers' Compensation will once again be issuing premium refunds. Our refund will allow us to continue to provide greatly needed academic opportunities to the students and families of Canton," Gruber said of the third rebate in six years, totaling $3 billion.

Among recent controversy and contentions nationwide over first responders' plight for mental health coverage under workers' compensation and this week's legislative changes in Iowa's workers' injury benefits, the billion-dollar repayment is good news for the industry to say the least. But before anybody receives their check in the mail, the BWC Board of Directors must approve the proposition.

Though she could not speak on any pending decision, BWC Public Relations Manager Melissa Vince said the end of April could be bright. "It is customary for the board to have a first read on proposals and rules and things that come before them and next month they will have a second read and have a vote. That is what is scheduled for April 28 regarding the proposed rebate," she said.

If approved, the board will begin sending checks in early July. According to the BWC, most rebates are expected to equal 66 percent of the employer's premium for the policy year ending June 30, 2016, and calendar year 2015 for public employers. One city that will see some of the more than $90 million of the total rebate for local governments is Ashtabula, a town in the Northeast corner of Ohio.

Dana Pinkert, finance director of Ashtabula, said the rebate is evidence of accountability to Ohio employers, and the region appreciates the bureau’s willingness to return surplus funds. "While we already actively manage workers' comp claims and take advantage of any BWC programs we can to reduce expenses, this will help directly reduce some of the burden on other city funds in 2017," Pinkert said in a statement.

While so many are thrilled with the rebate, Phil Fulton, of Fulton Law Office in Columbus, and the author of the LexisNexis workers' compensation treatise, "Ohio Workers' Compensation Law," said from his perspective, as an injured worker representative, he "does not concern himself with rebates."

But the reimbursement reveals a "healthy system," which he notes has gone from 3^rd  highest premium rate ranking in the nation to the 11^th lowest since 2008, according to the 2016 Oregon Workers’ Compensation Premium Rate Ranking Summary.

"One, it shows our system is strong and they won't have to reduce injured workers' benefits and, two, clearly, if the employers are getting a good deal for their buck, then we can make sure injured workers are treated fairly," said Fulton, who taught law at Capital University Law School in Ohio for almost a decade and authors the firm's workers' compensation blog.

The attorney said the rebate is a direct result of Ohio having a publicly funded state system. "We don't permit insurance companies in Ohio trying to get a dividend to their people. This is a pure system where the State of Ohio takes premiums in and pays benefits to injured workers,” Fulton said. "There is always a lot of criticism on whether Ohio should privatize. To me, this is the best story of why we shouldn't privatize and why this state fund system is the best system to have.”

On behalf of small businesses, Andy Doehrel, president and CEO of the Ohio Chamber of Commerce said in a statement that the billion-dollar announcement to return funds to "Ohio employers is a pleasant surprise and will serve as another building block in helping to improve Ohio’s economic climate, maintain jobs and attract new business to the state.”

Fulton, who has debated over privatization and has been on the BWC board, said the fact that "our premiums have been reduced 28 percent since 2010," and are at the "lowest levels in 40 years," is the combination of "what is good for the employer can also be good for the employee,” and the BWC agrees.

"This is a positive result of great investment returns," Vince said of this year's rebate and the consecutive rebates in 2013 and 2014.

It's all about privatization, according to the Fulton. "I am not sure insurance companies would give 3 billion over six years," he said.

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