Coverage and Penalty Abatement
Administrative Code (OAC) 4123-14-03, 4123-14-06.
Warren, Interim Chief of Employer Services
policies and procedures regarding retroactive coverage and penalty abatement
that predate the effective date of this policy.
policy, September 1, 2008; latest revisions August 20, 2012; September 10,
2014; July 1, 2015; January 11, 2016; March 3, 2016; May 15, 2018; January
I. Policy Purpose
guide Ohio Bureau of Workers’ Compensation (BWC) staff in processing employer
requests for retroactive coverage and penalty abatement when the lapse in coverage
or penalty results from good cause, BWC error, or an extenuating circumstance.
policy applies to BWC Call Center, BWC Employer Services, employers, and
payment: Occurs when an
employer fails to timely pay an installment, resulting in a lapse in coverage.
The lapse effective date is the first day of the month following the
installment due date.
premium (EAP): The annualized
estimate of premium utilizing the estimated payroll and approved 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 are required to provide twelve (12) months
estimated payroll on the U-3 application.
circumstance: A substantial
reason, or mitigating factor, that justifies granting the employer’s request
Good cause: Means a substantial reason, one that
affords a legal justification or legal excuse as defined in OAC 4123-14-03.
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.
Lapsed: Coverage status applied to an
employer’s policy who fails to pay the required premium by the established due
date. This status indicates the workers’ compensation coverage has been
Penalty: Fee assessed by BWC to employers who
fail to pay the required premium by the expiration of applicable grace period.
Policy in good
standing: The employer
is current on all payments due BWC and is in compliance with BWC laws, rules,
and regulations at the time of the request.
Reinstatement: Coverage status applied to an
employer’s policy that indicates workers’ compensation coverage has been
restored effective on the date BWC received full payment for any and all
An employer may
request retroactive coverage and penalty abatement to cover a claim, to qualify
for a BWC program, or to lessen the financial impact of a lapse in coverage.
As set forth in OAC 4123-14-03,
the BWC Administrator may for “good cause”:
Waive a default in
the payment of premium by an employer where workers’ compensation coverage has
lapsed for a period less than sixty (60) days. If such a waiver is granted, the
employer’s workers’ compensation coverage including elective coverage will be reinstated
imposed on an employer for failing to comply with the Ohio workers’
compensation statutes. For additional information about penalties, see the
Employer Services policies Prospective
Billing Installment Payments and Penalties
for Late Payment and Reporting.
As set forth in OAC
4123-14-06, unless a different time is provided by the Revised Code or the
Administrative Code for such matter, an employer must file a protest or appeal
of BWC’s decision on the request, protest, petition, or application within two
years of receipt of BWC’s determination. This limitation also applies to a
request to use the Governor’s One-Time Forgiveness (GOTF) set forth in section IV.E
BWC will only
consider retroactive coverage if the period of lapsed coverage is less than
sixty (60) days (i.e., fifty-nine (59) days or less). An employer with a lapse
in coverage over fifty-nine (59) days may be granted penalty abatement, however,
the employer may not be granted retroactive coverage. For example, an employer
with a lapse period of sixty-five (65) days who can show “good cause” will be
denied retroactive coverage, but may be granted penalty abatement.
A request for
retroactive coverage and/or penalty abatement must be submitted in writing and
signed in handwriting as required by OAC 4123-14-03.
retroactive coverage cannot be granted penalty abatement unless both are
All requests for
relief must fully explain the reasons for the relief sought.
or penalty abatement may only be granted if the employer’s policy is in good
standing. Good standing means:
The employer is
current on all payments due to BWC as defined in OAC 4123-17-14 and is in
compliance with BWC laws, rules, and regulations;
balances must not be past due or the outstanding balances must be in an appeal
coverage must be active or reinstated;
The employer must
have completed all payroll reporting requirements and
The employer must be
current on the payment schedule of any part-pay agreement it has entered for
any outstanding balances.
C. Resolution of complaints.
Employer complaints are
processed under the General Employer Complaint Policy. BWC staff will refer to section IV of
the General Employer Complaint Policy for:
extenuating circumstances that do not qualify as good cause. Depending on the
date the employer’s complaint was filed, the employer may be eligible for:
The GOTF scenario
outlined in section IV.E below; or
violation scenario outlined in section IV.C.4 below.
extenuating circumstances that do qualify as good cause.
Examples of BWC errors
which would allow granting an employer’s request for relief are found in
section IV.D below.
circumstances that meet the “good cause” standard for retroactive coverage and
penalty abatement are found in section IV.F below.
As set forth in OAC
4123-14-03, for employer complaints filed on or after December 12, 2019:
If unable to
establish good cause as defined above, the employer may show “good cause” if
the default is a one-time violation of the payment of premium or the filing of
the annual payroll report.
information about the annual payroll report, see the Employer Services policy Payroll
The employer must meet
all requirements set forth in section IV.B of this policy to qualify for good
cause under the one-time violation.
Once the employer
uses the one-time violation to show “good cause,” it is no longer available to
BWC and Attorney
General (AG) errors.
An employer can be
granted relief based on BWC or AG error regardless of the length of the lapse
period, and is not required to utilize the relief outlined in OAC 4123-14-03.
Example of a BWC
error which would allow granting an employer’s request for relief: The employer
just opened its business and contacted BWC about how to pay its premium and was
given inaccurate information or advice in writing from BWC, relied upon and
documented by the employer.
Forgiveness (GOTF). The intent of GOTF is to implement Governor Kasich’s
Executive Order 2011-01K.
Effective July 1,
2015, each employer had one GOTF. The GOTF may only be used for employer
complaints filed between July 1, 2015, and December 11, 2019. The GOTF may be
A default of a
premium installment payment that occurred after July 1, 2015; or
A failure to file
the annual payroll true-up (see Payroll
request for GOTF is subject to the time limitation for filing a protest or
appeal that is set forth in section IV.A.3 above.
Once GOTF is used,
it is no longer available to the employer. The employer may not rescind a prior
use of GOTF.
relief in no way waives the employer’s right to file additional requests for
relief for good cause under a different scenario of this policy.
GOTF should only be
used when the employer has not established “good cause” for the lapse in
conditions must be met in order to grant the employer’s GOTF request:
The coverage on the
policy must be reinstated.
The request must be
in writing and specify that the employer is using GOTF to remove the lapse in
coverage and billed penalties.
The lapse period
must be less than sixty (60) days (fifty-nine (59) days or less).
If there are
multiple lapse dates, and the employer has not previously been granted relief
under this scenario, BWC may waive one lapse period. The employer must
communicate to BWC which lapse period to apply the GOTF exception.
BWC will grant
retroactive coverage and penalty abatement and waive any other penalties
associated with the violation if the employer meets all the conditions for
granting relief based upon GOTF. BWC may grant retroactive elective coverage,
that meet the “good cause” standard for retroactive coverage and penalty
Third party errors
or omissions: Bank 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.
The bank or delivery
service error must be the sole reason for the untimely payment or reporting.
An employer mails
the payment to BWC on August 14. However, the post office returns the envelope
and check to the employer with a letter stating the envelope was caught in a
mail machine and badly damaged. The employer immediately issues a new check and
mails it to BWC on September 4. BWC receives the payment on September 6. The
employer provides BWC with copy of the post office letter and a copy of the
An employer attempts
to make an installment payment prior to the due date, using BWC’s website.
However, the payment is deemed NSF (non-sufficient funds), even though the
employer had sufficient money in the account to cover the payment. The employer
secures a letter from its bank stating that, due to a computer error, the bank
erroneously did not honor the payment.
A new employer defaults
on the first installment: The employer fails to timely pay the first
installment resulting in a lapse.
conditions must be met:
The employer meets
all requirements set forth in sections IV.B.2 through IV.B.3 of this policy;
reinstated coverage within fifty-nine (59) days of the first invoice due date;
iii. The employer must show good cause, or depending
on the date the employer’s complaint was filed, the employer must:
Use GOTF; or
Pursuant to OAC
4123-14-03, use the one-time violation of the payment of premium.
BWC may grant
retroactive elective coverage, when applicable. See Elective