Retroactive Coverage and Penalty Abatement
Ohio Administrative Code (OAC) 4123-14-03,
May 15, 2018
All EM policies and procedures regarding retroactive
coverage and penalty abatement that predate the effective date of this
New policy, September 1, 2008; latest revisions August
20, 2012; September 10, 2014; July 1, 2015; January 11, 2016; March 3, 2016; May
May 15, 2023
To 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
This policy applies to BWC
Call Center, BWC Employer Services, employers, and authorized representatives.
date: Always the first day of a month. BWC will “bill” the employer on the
first day of the month for each installment payment that is due.
in payment: An employer that fails to pay an installment before the end of
any grace period will have its coverage lapsed. Such lapse will be effective the
first day of the month following the bill date, regardless if such date occurs
prior to the installment due date.
annual 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
on or after July 1, 2015, 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 for relief.
cause: Means a substantial reason, one that affords a legal justification
or legal excuse as defined in OAC 4123-14-03.
period: A time frame during which BWC will not impose a penalty for
installment payments and true-up payroll reports received after established due
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 suspended.
Fee assessed by BWC to employers who fail to pay the required premium by the expiration
of applicable grace period.
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.
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 delinquent premium(s).
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 retroactively.
Abate penalties imposed on an employer for failing to comply with the
Ohio workers’ compensation statutes. For additional information about
penalties, see the Employer Services policy Prospective
Billing Installment Payments.
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 paragraph E below.
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). The number of lapse days is NOT a factor in evaluating an employer’s
request for penalty abatement. 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.
BWC will deny employer requests for retroactive coverage when the lapse
period is sixty (60) days or more.
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.
Employers requesting retroactive coverage cannot be granted penalty
abatement unless both are requested.
All requests for relief must fully explain the reasons for the relief
Retroactive coverage and/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
and is in compliance with BWC laws, rules, and regulations.
Any outstanding balances must not be past due or they must be in an
The employer’s coverage must be active or reinstated.
The employer must have completed all payroll reporting requirements.
The employer must be current on the payment schedule of any part-pay
agreement it has entered for any outstanding balances.
Employer complaints should be processed under the General
Employer Complaint Policy. BWC staff will refer to the following
sections of the General Employer Complaint Policy:
Section IV.B.3.a to IV.B.3.e for examples of extenuating circumstances
that do not qualify as good cause. An employer may be eligible for the GOTF
scenario outlined in section IV.E below.
Section IV.D.2 to IV.D.5 for examples of 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.
Specific extenuating circumstances that meet the “good cause” standard
for retroactive coverage and penalty abatement are found in section IV.F below.
D. 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. Relief will be granted for a one-time excuse within a five (5) year
One-Time Forgiveness (GOTF). The intent of GOTF is to implement Governor
Kasich’s Executive Order 2011-01K.
Effective July 1, 2015, each employer will have one GOTF, regardless if
such forgiveness was used, or unused, for a lapse that occurred prior to July
1, 2015. The GOTF may be used after July 1, 2015, for:
A failure to meet the payroll reporting deadline that occurred prior to
June 30, 2015.
A default of a premium installment payment that occurs after July 1,
A failure to file the annual payroll true-up (see Payroll
An employer’s 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.
When GOTF is used, it is no longer available to the employer. The
employer may not rescind a prior use of GOTF.
Requesting GOTF relief in no way waives the employer’s right to file
additional requests for relief for good cause under a different scenario of
GOTF should only be used when the employer has not established “good
cause” for the lapse in coverage.
The following conditions must be met in order to grant the employer’s GOTF
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
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, when applicable.
Scenario: Default of a premium installment payment. This scenario
applies to prospective premium payment.
BWC will allow an employer, who cannot otherwise establish good cause,
to use GOTF for relief from one default of a premium installment
The following additional conditions must be met in order to grant the
All required installment payments must be posted to the policy account.
The lapse date must have occurred after July 1, 2015.
The request meets the two year limitations period set forth in IV.A.3
circumstances that meet the “good cause” standard for retroactive coverage and
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
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.
Examples of extenuating circumstances:
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 damaged envelope.
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.
The following conditions must be met:
The employer meets all requirements set forth in sections IV.B.2 through
IV.B.3 of this policy.
The employer reinstated coverage within fifty-nine (59) days of the
first invoice due date.
The employer must prove good cause or use GOTF.
BWC may grant retroactive elective coverage, when applicable.