October, 2014 By: Mark L Newman, Cincinnati Workers’ Compensation Lawyer
Currently, Ohio employers pay their workers’ compensation premium for the previous six months of coverage (Example: Private employers paid in February 2013 for the July 1, 2012 to December 31, 2012 coverage period.)
This will soon change, as the BWC is transitioning to a prospective billing system that will provide more flexibility for employers while reducing overall system costs. Prospective billing is a national industry standard and builds upon ongoing efforts by BWC to modernize its operation. Under prospective billing, BWC will, like most insurance companies, collect employer premiums at the beginning of and throughout the policy period.
According to BWC the benefits of changing to the prospective payment process for Ohio employers will include:
- More flexible payment options (e.g., monthly, quarterly, semi-annually and annually) with possible discounts for those who pay in advance.
- Better ability to anticipate budgetary impacts of workers’ compensation program cost changes.
- Better opportunities for BWC to provide quotes online or via phone.
- Lower mutualized costs from employers who don’t pay premiums timely or have workers injured without coverage for employers in good standing.
- Increases BWC’s ability to detect employer non-compliance and fraud.
The biggest benefit will be the savings. The BWC is providing Ohio employees a one-time transition credit of nearly $1.2 billion. The credit is being issued so the switch from the retrospective billing system to the prospective system will not cost the Ohio employers additional funds.
The transition is expected to become effective July 1, 2015 for private employers and January 1, 2016 for public employers.
For more information about Ohio Workers’ Compensation, contact Mark Newman, Ohio Certified Specialist Workers’ Compensation Lawyer.