Filed Under:Markets, Workers Compensation

In Defense of Ohio’s Workers’ Comp. Rebates

PC360 writer Dave Postal, in his column “The Assault on State-Regulated Worker’ Comp,” is right when he calls workers’ compensation a critical component of our national "safety net." It is critical to our nation’s workforce because it ensures injured workers receive care, and it is critical to our businesses by largely protecting them from costly litigation.

However, in referring to recent action in Ohio, the article contains several errors. Governor John R. Kasich has proposed a $1 billion rebate to private and public employers. It is part of a three-part proposal to deal with net assets significantly above the guidelines established by our independent Board of Directors. The proposal also includes tripling our workplace safety grants and modernizing our billing process.

The article implies this is an election year ploy because rebates would appear in June 2014. This is incorrect. The rebates, if approved by our Board, would be issued in June or July of 2013, which is not an election year.

The article also erroneously reports that an additional $900 million in rebates will be issued after we modernize our billing, creating a total $1.9 billion cash rebate. The $900 million referenced will actually be a credit that allows us to move from retrospective to prospective billing. The biggest hurdle to making this switch has been that the transition would require employers to pay premium for their previous policy period while simultaneously paying for the upcoming policy period. The credit will ensure they only have to pay for their upcoming policy period. Businesses will still be writing their bi-annual check, so they won’t really “see” this savings.

Finally, the article compares Ohio to New York, which, according to the article, is raiding its fund to pay for other government services. This cannot happen in Ohio, where our constitution and laws prevent such action. We are not repurposing money collected. Our investment returns are just allowing us to return the excess to those who paid the premium.

The article couches Ohio’s actions as an attack on state-run systems, but I believe it’s the opposite. The two biggest complaints against state-run systems are high costs and low efficiency. This rebate and modernization directly address both. And, most importantly, they do so while still leaving Ohio in the upper range of its net asset guidelines, ensuring we have the financial strength to provide a safety net for generations of workers to come.

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