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Policy
Name:
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Prospective
Billing Installment Payments
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Policy #:
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EP-16-02
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Code/Rule
Reference
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Ohio
Administrative Code (OAC) 4123-17-13, 4123-17-14, 4123-17-14.2, 4123-17-16, 4123-17-26, and 4123-14-03.
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Effective
Date:
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July 1,
2023
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Approved:
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Rex
Blateri, Chief of Employer Services
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Origin:
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Employer
Policy
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Supersedes:
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Prospective
Billing Installment Payments policy effective March 26, 2018.
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History:
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Revised June
8, 2023 and January 16, 2019. New Policy issued July 1, 2015.
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Review
Date:
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July 1,
2028
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I. Policy Purpose
The
Bureau of Workers’ Compensation (BWC) provides coverage to an employer only
after the payment of required premium. BWC will permit employers to pay premium
obligations in installments as outlined in the applicable laws and rules.
II. Applicability
A.
This policy applies
to BWC Finance, Employer Services, Call Center, private employers (PA
employers), public employer taxing districts (PEC employers), and their authorized
representatives.
B.
This policy does not
apply to self-insuring (SI), public state (PES), Coal-Workers’ Pneumoconiosis Fund,
and Marine Industry Fund employers; alternate employer organizations (AEOs);
and professional employer organizations (PEOs).
III. Definitions
A.
Prospective
billing: A workers’
compensation insurance practice that provides coverage to the insured only
after the payment of premium.
B.
Notice of
estimated annual premium (Notice of EAP): A letter sent annually, to PA employers and PEC employers,
in which BWC documents the estimated payroll (exposure) for the upcoming policy
year. Using the estimated payroll, assigned classification codes, and approved
rates, BWC provides the employer with the estimated annual premium.
C.
Installments: A series of premium amounts to be paid
at regular intervals.
D.
Invoice: A statement BWC mails to employers to
bill for premium and non-premium charges that are owed. An employer may opt to
receive an electronic notification instead of a mailed invoice. Such employer
will receive an email when a new invoice is issued and may review the invoice
online through a BWC e-account.
E.
Grace period: A time frame during which BWC will not
impose a penalty for installment payments and true-up payroll reports received
after established due dates.
IV. Policy
A.
Estimated annual
premium (EAP).
1.
BWC will estimate
annual premium based on the most recent payroll information. EAP will be based
on the most recent payroll true-up or subsequent payroll changes that happened
before policy renewal. BWC will estimate payroll for employers without a full
year of payroll.
2.
BWC will allow an
employer to revise estimated payroll for the policy year if the employer can
demonstrate “good cause.” Good cause means a substantial reason, one that
affords a legal justification or a legal excuse.
a.
Examples of good
cause include, but are not limited to:
i.
Furlough days,
layoffs, division closings, and relocations out-of-state;
ii.
Combinations and
partial transfers; or
iii. Significant expansions or reductions in
payroll, with supporting documentation.
b.
BWC will revise the EAP
and the balance of installments for the remainder of the policy year to reflect
the new estimated payroll.
c.
BWC will not accept
requests to revise estimated payroll for the policy year after the following
dates:
i.
PA employers: Last
business day of March of the current policy year.
ii.
PEC employers: Last
business day of September of the current policy year.
B.
BWC will provide PA
employers and PEC employers with a notice of EAP.
1.
PA employers will
receive the notice of EAP no later than the first day of May preceding the
policy year for which such premium is due.
2.
PEC employers will
receive the notice of EAP no later than the last day of October preceding the
start of the policy year.
3.
The notice shall
include all of the following:
a.
The estimated payroll
used by BWC to calculate the employer’s estimated premium due;
b.
Individuals who have
elected coverage;
c.
The classification
codes in which the employer’s payroll is allocated and the blended rates for
each of the classification codes identified;
d.
The employer’s
applied experience modifier (EM) used in determining premium due;
e.
The employer’s
estimated premium due for the applicable policy year; and
f.
An installment
schedule that outlines bill dates and installment amounts.
C.
Operation of
installment payment plans.
1.
BWC offers employers
premium installment options consisting of one, two, four, six, or twelve
payments.
2.
Employers paying annual
premiums totaling $250 or less will be billed one installment which must be
paid in full prior to the start of the policy year.
3.
There is no penalty
for employers paying in advance of the installment payment schedule.
4.
PA employers with annual
premiums totaling more than $250 will initially default to a bi-monthly six (6)
payment installment plan.
5.
PEC employers with annual
premiums totaling more than $250 will initially default to a monthly twelve
(12) payment installment plan.
6.
BWC will permit PEC
employers to defer installment payments due prior to April 30 of the policy
year until April 30.
a.
Such election must
occur on or before November 15 of the previous policy year.
b.
BWC will apply a
deferment fee of 0.94 per cent to the total amount of the installments that are
deferred.
7.
BWC will establish
an installment plan for a new employer if the prorated pure premium for the
remainder of the current policy period is greater than $250.
8.
BWC will create an
invoice for each installment payment that is due.
9.
Each installment
payment is due by the date indicated on the invoice.
D.
Early payment
discount: BWC provides an early payment discount of two percent (2%) to
employers that pay the full twelve (12) month EAP by the applicable due date.
1.
For PA employers the
due date is July 1, and for PEC employers the due date is January 1.
2.
The employer must be
in an active status as of the due date for the first installment to be eligible
for the discount. Active status does not include:
a.
A policy that is a
no coverage policy; or
b.
A policy that is
lapsed.
3.
The discount cannot
reduce the total amount due below the minimum administrative charge as provided
in rule OAC 4123-17-26.
4.
The early payment
discount will be applied to any outstanding balance and any remaining credit
will be refunded to the employer through standard business processes.
E.
Changes in installment
payment plans.
1.
A PA employer may
change its installment payment plan by logging on to its account on www.bwc.ohio.gov, and making the change, by the May 15
preceding the beginning date of the policy year.
2.
A PEC employer may
change its installment plan by logging on to its account on www.bwc.ohio.gov, and making the change, by the November
15 preceding the beginning date of the policy year.
3.
An employer
requesting a change to its installment payment plan after the deadlines set
forth above must contact BWC.
4.
BWC will not
consider changes to installment payment plans after the following dates:
a.
PA employers: Last
business day of March of the current policy year.
b.
PEC employers: Last
business day of September of the current policy year.
5.
BWC may alter an
installment payment plan if it determines such change is appropriate.
F.
Default in
installment payment.
1.
An employer paying
an installment after the due date, but prior to the expiration of any grace
period, will not have its coverage lapsed. The payment must be posted to the
employer’s account prior to the expiration of the grace period.
2.
An employer paying
an installment after the grace period will have its coverage lapsed. Such lapse
will be effective from the first day of the month which falls nearest the due
date of the payment. For example, an installment with a due date of June 21
will have a corresponding lapse effective date of July 1.
3.
A new employer that
fails to pay its initial installment payment before the expiration of any grace
period will have its coverage lapsed back to the initial date of coverage.
4.
BWC will assess
penalties for late installment payments in accordance with the Penalties for Late Payment and Reporting policy.
5.
BWC will certify
past-due installment payments to the Ohio Attorney General seventy-five (75)
days after the payroll true-up due date. See the Payroll True-Up policy for additional information.
G.
Resolution of
complaints.
1.
BWC has not
identified any extenuating circumstances that apply to installment payment
plans.
2.
Employer complaints
related to installment payment plans must be processed under the General Employer Complaint Policy.
3.
Employer complaints
related to the default of an installment payment are processed under the Retroactive Coverage and Penalty
Abatement policy.