$1 billion in one-time workers’ compensation rebates to be mailed this summer

BWC checks better than expected

Bureau of Workers’ Compensation Administrator Steve Buehrer.
Bureau of Workers’ Compensation Administrator Steve Buehrer.

COLUMBUS — Some 210,000 employers will receive checks in the mail this summer totaling $1 billion in one-time workers’ compensation rebates attributed to better-than-expected earnings on the insurance fund’s investments.

Of that, about $113 million will go to local governments.

“They will receive a rebate ranging from $5 to several million dollars,” Gov. John Kasich said Thursday, joking that he may deliver some of the checks himself.

“The fact of the matter is that good management and good investing….has yielded some really great things for employers…,” he said. “I would call this one of the most significant economic stimulus measures that you can see.”

Private employers will also see a 2 percent reduction and public employers a 4 percent reduction in their permanent workers’ compensation insurance premiums next year. In all, Bureau of Workers’ Compensation Administrator Steve Buehrer put the price tag of the savings for businesses from the package at $1.9 billion.

The BWC, the government-run insurance fund for injured workers, also plans to triple its grants supporting efforts by employers to improve worker safety from $5 million a year to $15 million.

The one-time rebate and permanent rate reduction won’t need the support of lawmakers. The General Assembly, however, will be asked to approve a change in the timing in which premiums are collected as it moves to billing employers at the beginning of a six-month coverage period instead of at the end.

When the BWC makes that shift in July 2014, assuming the legislation passes, the bureau will forgive six months of premiums as employers cut a check for the six months ahead instead of the half-year behind.

Both the governor and Mr. Buehrer stressed that the one-time giveback would not endanger the BWC’s ability to pay a roughly $860 million court judgment for businesses from a so-far successful lawsuit challenging the BWC’s former group-rating system in which certain groups of employees were given steep discounts on their premiums.

The bureau is appealing the Cuyahoga County case to the Ohio Supreme Court, but Mr. Buehrer said money has been placed in reserve to cover the judgment if the appeal is not successful.

"It is encouraging to see Administrator Buehrer and the administration recognize that the bureau's $9 billion surplus belongs to Ohio's job creators, not the BWC,” said Earl Stein, president of Pay Us Back Ohio BWC, Inc., the coalition of businesses behind the lawsuit.

“Now is the time for the administration and the bureau to recognize that it continues to hold on to another $860 million that was illegally charged to 270,000 employers and comply with the court order to repay those funds," he said.

Mr. Buehrer also said the rebate is not an indication that the BWC is repeating mistakes seen several years ago when the bureau was criticized for issuing rebates and group discounts that employers came to count on as routine and missed when they suddenly stopped.

“The board in 2009 set up a proper ratio of how much net assets the state ought to hold, and we’ve surpassed that ratio…,” he said. “The governor’s proposal today will bring us back closer to getting in the range that was set up in a non-partisan, best-investment-practices way…”

Those changes followed a major overhaul of the bureau and its investment practices after the prosecution of Toledo area coin dealer Tom Noe for stealing from $50 million in BWC funds invested in rare-coin funds he operated.

Mr. Buehrer said the BWC has experienced net annual investment returns of 11.4 percent over the last three years.

“The dividend credit this summer will immediately allow business owners to hire additional employees, purchase new equipment, and grow their businesses to improve Ohio’s economy,” said Roger Geiger, vice president and executive director of the Ohio chapter of the National Federation of Independent Business.

Rep. Barbara Sears (R., Monclova Township) attended the announcement.

“That’s what businesses want,” she said. “They want predictability. They want stability, and this becomes a very good way of doing that. When we do the conversion to prospective (premium collections), that’s going to be incredibly helpful — to get that six-month break, a nice amount of cash that employers can use to kind of backfill things on their to-do list.”

Contact Jim Provance at: jprovance@theblade.com or 614-221-0496.