OhioBWC - Basics: (Policy library) - File

Policy Name:

.99 EM Construction Cap

Policy #:

EP-14-01

Code/Rule Reference:

Ohio Administrative Code (OAC) 4123-17-05 Appendix A, HB 15 Section 220

Effective Date:

July 1, 2018

Origin:

Employer Policy

Supersedes:

All policies, directives and memos regarding .99 EM Construction Cap that predate the effective date of this policy.

History:

Policy Original Effective July 1, 2009, Policy Revised: July 1, 2012; July 1, 2016.

Review Date:

July 1, 2023

 

I.       Policy Purpose

The Bureau of Workers’ Compensation (BWC) offers eligible construction industry employers a temporary cap on their experience modification (EM) equal to .99. BWC will notify qualified construction industry employers of their eligibility to participate in the program with no application required. BWC will administer the .99 EM Construction Cap in accordance with all applicable laws and rules.

II.     Applicability

This policy applies to BWC Actuarial, Employer Programs, Regional Employer Services, the Division of Safety and Hygiene and to private employers (PA employers), in the construction industry as identified in OAC 4123-17-05 Appendix A.

III.    Definitions

A.     Industry Group: National Council on Compensation Insurance (NCCI) Codes are grouped together into ten (10) Industry Groups ORC 4123-17-05, Appendix A.

B.     Construction Industry Employer: The employer's predominant premium is in Industry Group 4, Construction. Construction industry includes any activity performed in connection with the erection, alteration, repair, replacement, renovation, installation, or demolition of any building, structure, highway, or bridge.

C.      Experience Modifier (EM): The value that compares an employer’s claim experience to the claim experience that would be expected of an employer of similar size in the same pursuit of business.

D.     SH-26: The SH-26 form is intended to help employers evaluate their safety and claims management systems and identify opportunities for improvement. The form contains eleven (11) safety and health categories considered critical to an effective safety and health process. The person(s) within the employer’s organization most familiar with the current safety and claims management process should complete the form.

E.      True-up: Annual reconciliation of estimated payroll and actual payroll. All employers must file annual payroll after the conclusion of the policy year. BWC will calculate any premium obligation or credit for the completed policy year.

IV.   Policy

A.     Eligibility Criteria:

1.      Initial Eligibility – All of the following must be met:

a.      Be a Private Employer (PA);

b.      One of the following two situations apply:

i.       Employer, for the policy year beginning July 1, 2007, is a Construction Industry Employer; or

ii.       Employer submits a written request for participation in the program, and the employer qualifies as a Construction Industry Employer for the most recently completed policy year;

c.      Be current with respect to all payments due BWC as defined in OAC 4123-17-14;

d.      Not have cumulative lapses in workers' compensation coverage in excess of forty (40) days within the prior twelve (12) months;

e.      Have a published EM equal to or less than 1.0 in the preceding policy year; and

f.       Have an EM initially calculated for the current policy year that is greater than 1.0 and not more than 1.5.

2.      Renewal Eligibility – All of the following must be met:

a.      The employer was enrolled in the .99 EM Construction Cap program the previous policy year;

b.      The employer did not opt out of, and BWC did not remove the employer from, the .99 EM Construction Cap program during the previous policy year;

c.      The employer completed a SH-26 by the last business day of July of the preceding policy year of participation;

d.      The employer has an EM initially calculated for the current policy year greater than 1.0 and not more than 1.5;

e.      The employer must have reported actual payroll for the preceding policy year and paid any premium due upon reconciliation of estimated premium with actual premium no later than the due date, per OAC 4123-17-14, plus any applicable grace period; and

f.       The employer qualifies as a Construction Industry Employer for the most recently completed policy year.

B.     The following employers are not eligible to participate:

1.      Employers that voluntarily opt out of the .99 EM Construction Cap program, or BWC removes from the .99 EM Construction Cap program.  An employer that voluntarily opts out, or BWC removes them from the .99 EM Construction Cap program during the previous policy year, is not eligible to participate for the following year; such an employer can become eligible in a subsequent policy year if the employer meets Initial Eligibility in Section IV.A.1. above.

2.      State agencies.

3.      Self-insuring employers.

4.      Public Employers – Taxing Districts (PEC employers).

C.      Application Process: There is no formal application to participate in this program. BWC will notify qualified Construction Industry Employers under HB 15 of their eligibility to participate. However, employers seeking to participate in the program because the employer has either previously opted out of the program, or is seeking participation and did not qualify as a Construction Industry Employer for the policy year beginning on July 1, 2007, must notify BWC in writing of the employer’s intent and desire to participate in the program.

D.     All eligible construction industry employers meeting the conditions set forth in this policy are considered active participants unless an employer opts out of, or BWC removes an employer from, the program as described in IV.G. of this policy.

E.      Operation of Program:

1.      The employer’s actual premium rates will be calculated based on its earned EM.

2.      The employer must complete a SH-26 by the last business day of July of the policy year of participation. An individual SH-26 is valid for twelve (12) months and may be used by BWC when evaluating all program applications that require an SH-26.

F.      Compatibility with other Programs: Employers participating in the .99 EM Construction Cap program may participate in all other BWC Employer Programs as long as they meet the eligibility and application requirements of those programs.

G.     Opt Out / Exit.

1.      An employer must choose to opt out of the program in writing by completing BWC Form U-108, Opt Out of the .99 EM Construction Cap.

2.      If an employer has any of the following occur, an employer’s actual EM is published, the employer is no longer participating in the .99 EM Construction Cap Program for the current policy year, and the employer is ineligible to re-enter the .99 EM Construction Cap program for the following policy year:

a.      Employer opts out of .99 EM Construction Cap program;

b.      BWC removes an employer from the .99 EM Construction Cap program;

c.      Employer fails to complete the SH-26 by the deadline; or

d.      Employer fails to complete the annual-true up by the required deadline.

H.     Resolution of complaints.

1.      Employer complaints should be processed under the General Employer Complaint Policy.

2.      BWC has not identified any other specific extenuating circumstances that apply to .99 EM Construction Cap.