Work Comp Rebates in OH Join Lower Premiums in Other States

Liz Carey

Columbus, OH ( – More than 180,000 Ohio businesses should start to see rebate checks from the Ohio Bureau of Workers’ Compensation soon, thanks to savings on claims and good investments, BWC spokesmen said.

In other states, lower costs will result in lower premiums.

In May, the Ohio BWC Board of Directors approved a $1.5 billion rebate to businesses. The rebate checks will be mailed starting in early July. The checks will equal 85 percent of the premiums paid for the policy year that ended June 30, 2017.

“We want all eligible employers to receive their share of the rebate, so it’s critical they … watch their mailboxes closely over the summer,” said BWC Chief Financial Officer Barbara Ingram, in May.

The rebate is the largest in 20 years, Tony Gottschlich, spokesman for the bureau said in an interview with In 1998, the state issued more than $1.95 billion in rebate checks. The program’s records go back to 1995, he said.

According to the BWC, the rebates are a result of not just lower costs and claims, but also good investments. The BWC earned on average 6.7 percent on its investments of the State Insurance Fund over the last five fiscal years, pushing the fund’s net position to $10.9 billion.

“We issue rebates when our fiscal planners and board of directors feel we’re in a strong enough position to do so, so this isn’t a guarantee every year, even though this is our fourth since 2013,” he said.

If employers don’t cash their checks, the rebate will apply to their coming workers’ compensation premium.

“We expect all checks to be issued by the first week of August. It will be closer to 158,000 checks because we first applied the employer’s rebate to bring their account current, then we issued checks for the balance,” he said. “Employers enrolled in our Group Retro Plan will get their checks later this year…. We will issue new checks for employers whose checks have stale dated, but ultimately, no employer will lose out on a rebate because we will just credit their account.

In other states, like Florida, California, Massachusetts and Montana, lower costs and claims has resulted in lower premiums rates.

In Montana, businesses will see an 8 percent reduction in their workers’ compensation premiums. The Montana State Fund’s board of directors approved the premium reduction earlier this year. The reduction is an average over industries, spokesmen for the department said, and specific industry reductions will vary based on the industry. The reduced premiums will apply to policies effective from July 1, 2018 to July 1, 2019.

“A rate decrease is good news for Montana businesses who expect and need stable, predictable expenses,” MSF Board Chairman Lance Zanto said in a press release. “It all comes down to workplace safety and keeping injured workers at work. Fewer accidents in the workplace help keep premium levels as low as possible. Lower premium rates mean more room on a policyholder’s bottom line and more flexibility for employers to operate their business.”

The Montana State Fund is a public-private organization that provides workers’ compensation for about 60 percent of employers in Montana, writing 25,826 policies in 2016.

The rate reduction is the sixth in a row, a spokesman for the Montana Department of Workers’ Compensation told

“The National Council on Compensation Insurance (NCCI) submitted a Loss Cost filing in Montana with a change in voluntary loss costs of -10.7 percent effective July 1, 2018. There are many other variables that can influence an employer’s individual cost of insurance including their accident history, industry, and business size,” Jake Troyer, spokesman for the organization said. “According to historical data we have from NCCI, this is the 6th consecutive rate reduction. There was no change in the 2012 filing. The last increase dates back to 2006.”

The rate reduction varied across industries.

“Yes, according to NCCI, the overall average change is -10.7 percent,” he said. “It is -11.8 percent in construction, -10.2 percent in manufacturing, -10.5 percent in goods & services, and -11.7 percent in office & clerical.”

In California, lower workers’ compensation premium rates were scheduled to go into effect on July 1.

In March, California Insurance Commissioner Dave Jones called for a 10 percent reduction in workers’ compensation insurance premiums. The recommendation was based on reductions in the cost to workers’ compensation insurers, due in part to legislative reforms to the workers’ compensation system.

Under California’s deregulated workers’ compensation insurance system, the commissioner can only recommend premium rates. Insurance companies are free to implement the recommendation or not.

Jones recommended the premiums reduce to $1.74 per $100 in payroll. In 2003, the pure premium rate was $4.27 per $100 in payroll. By 2017, after several rounds of legislative reforms, the rate had fallen to $1.98 per $100 in payroll.

But Jones said in a statement about the recommendation that insurers have not lowered premiums as much as they could. Jones noted that the average premium rate for insurers on January 1, 2018 was $2.22 per $100 in payroll.

“It is time insurers do the right thing and pass along more cost savings to California employers who deserve to share in the benefits cost reductions have brought to the workers’ compensation system,” he said in a statement. “In addition to the cost reductions that have led to higher profits, insurers are also benefiting from the federal income tax break, which should result on average in about another five percent decrease in premiums.”