OH BWC Reform Efforts Bring A Multitude Of Successes In 2009

Rate reform
This year, BWC and its Board of Directors set rates with greater accuracy, reduced workers' compensation insurance premiums for most of Ohio's private employers, gave business owners more options to control their workers' compensation costs, and increased safety requirements. A 100-percent experience modifier cap was also added to assure premium stability in the event of a change in an employer's experience.

In addition, the agency adopted a new credibility table used to determine the maximum discount from 77 percent to 65 percent, effective July 1, 2010. BWC uses the credibility table to calculate employers' workers' compensation insurance costs based on their claim experience.

“In the coming weeks, employers will receive premium statements for their workers' compensation insurance coverage for the second half of 2009,” said BWC Administrator Marsha Ryan. “The majority of Ohio's private employers can expect to pay lower premiums, thanks to a 25.3-percent rate reduction.”

In addition to lowering rates, the agency added nationally-accepted insurance industry-based programs that give employers an opportunity to lower their premiums by taking on more risk coverage. They include a standard deductible program and a group-retrospective-rating program. The second lowers employer's costs based on the results of safety efforts. BWC is developing additional discount programs and expects to implement them in 2010.

Comprehensive study
Earlier this year, the BWC Board of Directors received results of the year-long comprehensive study of BWC and its programs. House Bill 100 of the 127th General Assembly mandated the study which assessed the agency and the services it provides to injured workers and Ohio employers. An internal BWC team is reviewing the 900-page study, analyzing its recommendations and prioritizing recommended changes. To date, the agency has implemented 20 recommendations and approximately 45 percent of the others are expected to be addressed in the first half of 2010.

“The comprehensive study is providing us with outstanding guidance and direction for fundamental long-term improvements to Ohio's workers' compensation system,” added Ryan. “It has been instrumental in our recent rate-reform efforts and will continue to aid us on our course toward building a customer-centric, stable, and actuarially sound workers' compensation system.”

Investments
Ohio's workers' compensation system is reliant upon a strong State Insurance Fund with adequate monies available to fund the care of injured workers. When most public-funded investment plans struggled through recent economic challenges, Ohio's State Insurance Fund was stable, losing just 1.1 percent over the fiscal year 2009 period which ended June 30, 2009. Over the second half of calendar year 2009, this slight loss was recovered and the Fund remains strong.

To maintain a strong portfolio, the BWC Board of Directors supported an implementation strategy to diversify fixed and equity investments within the State Insurance Fund. This followed its previous approval of a comprehensive update to the Fund's investment policy statement, which kept the Fund 100-percent passively managed. The new IPS called for investments in 70 percent bonds and 30 percent equities. It also required the selection of passive-investment managers to execute the new investment strategy. BWC selected Barclay Global Investors (now BlackRock), Northern Trust Global Investments and State Street Global Advisors through a request for proposal process and approved by the Board of Directors.

Better services
Prompt, effective medical care leads to quicker recovery, a timely return to work and improved quality of life for injured workers. To effectively meet the needs of injured workers, BWC is focused on improving medical services and enhancing its provider network. In 2009, efforts to accomplish this included:

• Replacing the provider enrollment system;
• Improving the provider outreach system which includes the recruitment of new providers and facilitates the decertification of repeat, non-compliant providers;
• Strengthening the integrity, centralization and efficiency of the pharmacy program to ensure proper usage and tighter controls of the most prescribed medications;
• Implementing a pharmacy rebate collection policy;
• Selection of a new pharmacy benefit manager to improve drug utilization;
• Eliminating redundancies in the alternative dispute resolution process;
• Partnering with the Ohio State University's College of Public Health to expand medical resources and research capabilities on a variety of treatment options.

Safety efforts
The key to lower workers' compensation rates and injury avoidance is safety. Through its Division of Safety and Hygiene (DSH), BWC provides training and consultation to Ohio employers and their work forces. BWC offers many value-added services at no additional cost.

“Prevention has proven to be the main factor in keeping Ohio's work force safe while on the job,” said Administrator Ryan. “The services we provide through the DSH serve as a tool to help employers achieve safe workplaces; thus; effectively lowering their individual workers' compensation insurance costs.”

In 2009, DSH developed a plan to help employers decrease the frequency and severity of claims, keeping workers safe and lowering employer costs. This includes an evaluation of safety intervention and drug-free workplace grants; making safety grants available to employers even if no previous claims have occurred; requiring applicants to submit a safety consultation report with grant applications; and modernization of our drug-free workplace programs.

What's ahead in 2010?
BWC will continue to bring stability and fairness to workers' compensation rates in the New Year. The agency will further evaluate and implement the results and recommendations of the mandated comprehensive study that are intended to improve the services provided to Ohio's injured workers and employers.