Ohio Revised Code (ORC) 4123.01 Ohio Administrative Code
July 1, 2015
All policies and procedures regarding U-3 Application
for Coverage and Coverage Initiation that predate the Active date of this
July 27, 2006
The Bureau of Workers’
Compensation (BWC) provides workers’ compensation coverage for Ohio employers.
The U-3 Application for Coverage policy ensures that an employer’s request for
coverage is processed in accordance with all applicable laws and rules.
policy applies to BWC Policy Processing/Underwriting, Field Services, Cash
Control, Employer Call Center, Claims, Employer Compliance, private employers
(PA), public employer taxing districts (PEC) and authorized representatives.
A. Active date
of coverage: The date BWC receives a completed U-3 with the application fee.
fee: A nonrefundable fee of $120.00 which is equal to the minimum
administrative annual charge as set forth in OAC 4123-17-26.
for Ohio workers' compensation coverage (U-3): Form used by an employer to
apply for workers’ compensation coverage.
Application number: A temporary number assigned to an
application and used for tracking purposes.
E. Blended Rate:
The actual rate that appears on the employer’s Estimated Annual Premium notice and
is used to calculate workers’ compensation premiums. The rate is the sum of the base rate or modified rate, the
administrative cost (AC) assessment, and the Disabled Worker’s Relief Fund
(DWRF) and DWRF2 assessments. It is also used for the annual True-up payroll filing.
Initiation: BWC‘s process for determining when an application for coverage
requires a new policy. A new policy will not be issued when the employer
applying for coverage is essentially the same or similar to an existing policy.
coverage: Optional coverage for business owners or ministers in one of the
liability company acting as a sole proprietor;
liability company acting as a partnership;
farm corporate officers;
incorporated as a corporation; and,
or associate ministers of a religious organization.
annual premium (EAP): The annualized estimate of premium using the
estimated payroll and blended rates. BWC’s premium estimates are based on the
last full policy year of actual payroll multiplied by the employer’s blended
rate for the policy year being estimated. New employers applying for coverage
on or after July 1, 2015, are required to provide twelve (12) months of estimated
payroll on the U-3
Experience modification (EM): An adjustment factor applied to the
base rate of the manual classification.
employer: A new business entity with employees for which any of the
following is true:
employer is a new business entity in Ohio; or,
employer is an out of state employer that has not had prior operations in Ohio
and has not had prior workers' compensation insurance coverage in Ohio.
K. No coverage penalty:
Assessment calculated by BWC upon determination that an employer has failed to
comply with coverage requirements as set forth in ORC 4123.01 (B) (2).
Policy number: A number assigned by BWC to an employer’s
business operations after an application has been finalized.
M. Predecessor: An
employer that precedes another in whole or in part in the operation of a
An employer that succeeds another in whole or in part in the operation of a business.
must file a U-3 form with BWC:
may apply online at bwc.ohio.gov
applications may also be mailed to BWC or dropped off at a local
service office with a money order or check for the required application fee.
employer at a minimum must provide the following information when applying for
coverage as set forth in OAC 4123-17-13
a. Legal name and
business entity type (e.g. corporation, L.L.C., sole proprietorship,
b. Employer address;
Identification number (FEIN);
d. Description of
employer operations, including:
i. A description of
the work done or industry pursued by the employer;
ii. The estimated
average number of employees in each kind of work; and,
iii. The estimated
wages of employees in each kind of work over the next twelve (12) months.
related to whether the applicant for coverage has purchased an existing
business or has another associated policy;
f. Name of the
owner(s) or corporate officer(s), and when applicable for elective coverage the
name of the sole proprietor, partners, or minister. (Refer to Elective
for further details);
g. Signature of the
person completing the U-3 form; and,
h. A non-refundable
application fee of $120.00 equal to the minimum administrative annual charge as
set forth in OAC 4123-17-26.
3. BWC assigns a
temporary application number to the employer’s U-3. This number is used to
track the application throughout the remainder of processing and appears on all
correspondence sent to the employer or its authorized representative.
a. BWC contacts the
employer to obtain the missing information.
b. If the employer
fails to provide the required information, BWC will:
i. Deny the
employer’s application outlined in OAC 4123-17-13 (A) (2).
ii. Consider the
employer as non-complying as referenced in OAC 4123-14-01
penalties and payments from the employer as set forth in OAC 4123-14-02.
B. Application evaluation:
reviews the application to determine if the employer has an existing policy. The
evidence considered to determine whether a new policy should be issued
includes, but is not limited to:
Security Number (SSN) or FEIN;
Ohio workers’ compensation policies and other principals associated with all or
part of the business operation;
Purchase or sale agreement; and,
BWC determines that another policy exists then BWC denies the application and
invokes Coverage Initiation. BWC may:
the prior risk coverage to the employer as set forth in OAC 4123-17-02.
the employer to assume any outstanding obligations under the prior risk
the payment of outstanding obligations or the establishment of a payment plan
prior to granting new coverage.
will assign manual classification(s) based on the duties performed.
4. An employer that
has a dishonored application fee payment prior to the application being
finalized will be required to submit a new U-3 and application fee.
received from a Temporary Agency for the allowance of up to ten (10) policies
by industrial pursuit will be processed according to the Temporary
Labor Services Policy and procedures.
will calculate and charge a No Coverage Penalty if the employer filed the U-3
application after the date one or more employees were hired to work in Ohio.
issued on or after 7/1/2015 for PA employers and 01/01/2016 for PEC employers
with prior to coverage payroll will be assessed a No Coverage Penalty.
questioning the penalty may contact BWC. BWC may adjust or waive the penalty if
the employer can document no employees prior to the active date of coverage.
any claim that occurs prior to the active date of coverage:
will bill the employer dollar for dollar for costs billed to the claim; and,
refer the employer to the Employer Compliance Department for a compliance
C. Finalizing the U-3.
1. BWC will
finalize an employer’s application for coverage when all required information
has been provided and no issues are identified during the coverage initiation
2. Once an application
is finalized by BWC the employer’s application number is converted to a policy
which will be used to identify a specific employer.
3. BWC shall issue each
of the following to the employer:
a. A Certificate of
Ohio Workers’ Compensation Coverage.
b. A Notice
of Estimated Annual Premium and Premium Installment Schedule letter which will
estimated twelve (12) month payroll from the U-3 used by BWC to calculate the
employer’s estimated premium due;
who have elected coverage;
iii. The manual
classifications in which the employer’s payroll is reportable and the blended
rates for each of the manual classifications identified;
iv. The employer’s
applied EM used in determining premium due;
employer’s estimated premium due for the applicable policy year; and,
vi. An installment schedule
that outlines installment due dates and premium amounts. BWC will match as
closely as possible the installment schedule selected by the employer for
partial policy years. (Refer to Prospective
Billing Installment Payments for further details).
a. BWC shall issue
a certificate of workers' compensation coverage. The certificate shall indicate
that coverage is contingent on payment of estimated premium and assessments
b. BWC will prorate
the estimated annual premium. The employer will be billed in equal installments
for the remainder of the current policy period. The employer is responsible for
all installment payments for the remainder of the policy year.
c. BWC will apply a
credit in the amount of the application fee to the employer’s first installment
d. Coverage will become
effective upon timely receipt of the first premium installment payment,
retroactive to the date and time of receipt of the application:
i. For walk-in
customers, “the date and time of receipt of application” will be determined by
the BWC time and date stamp.
ii. For online
applications, “the date and time of receipt of application” will be determined
by the website time indicator.
iii. For mail-in
applications, “the date and time of receipt of application” will be 12:01 a.m.
on the date BWC receives the U-3 and the application fee, as indicated by the BWC
time and date stamp.
D. Resolution of
complaints should be processed under the General
Employer Complaint Policy.
2. BWC has
identified specific extenuating circumstances that apply to Application for
Coverage. These extenuating circumstances are outlined in section E, below.
Specific extenuating circumstances for which relief may be
Effective Date: BWC may provide relief to the employer under the following
out-of-state employer was misinformed by its insurance agent/broker that the
“all states” endorsement on its insurance policy covered Ohio. Merely asserting the mistake does not establish this circumstance.
The employer must have written proof of the
misinformation it was provided.
error or delivery service error in processing an employer payment or delivering
a payment to BWC. This circumstance may also be used if the post office did a
poor job forwarding the employer’s mail.
Such errors must be documented by letter or sworn statement from the
bank or delivery service.
bank or delivery service error must be the sole reason for the untimely payment
Initiation: BWC may provide relief to the employer if the employer or their
authorized representative provides documentation such as:
A different federal identification number,
business bank checking accounts,
Successorship Liability: Refer to the Successorship
Policy on complaints related to that topic.