Ohio employers to get $1 billion in rebate checks

5/2/2013

COLUMBUS — Some 210,000 employers will receive checks in the mail this summer totaling $1 billion in one-time workers’ compensation insurance rebates attributed to better-than-expected earnings on the state 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 today, 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’ compensations insurance premiums next year. In all, BWC Administrator Steve Buehrer put the price tag of the savings for business from the package at $1.9 billion.

The Bureau of Workers’ Compensation 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 from collecting premiums at the beginning of a six-month coverage period instead of at the end.

“The problem with paying at the end of the year is that you have a situation where people don’t pay their bills and those who are in business end up having to pay not just their own but also to pay the costs of other people,” Mr. Kasich said.

When the BWC makes that shift next year, 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.

The governor made the announcement at Homage, a small Columbus store specializing in sports T-shirt sales that he held up as an example of a small, self-made business that will benefit from the shift.

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 group-rating system. 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 bureau 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 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 that they set up some months ago,” 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 that was set up in 2009.”

Such changes followed a major overhaul of the bureau and its investment practices after the prosecution ofToledo area coin dealer Tom Noe for stealing from a $50 million BWC investment 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