for Coverage (U-3)
Revised Code (ORC) 4123.01 Ohio
Administrative Code (OAC) 4123-14-01, 4123-14-02,
Suttles, Chief Employer Services
policies and procedures regarding Application for Coverage (U-3) and Coverage
Initiation that predate the active date of this policy.
April 25, 2019; March 5, 2019; July 22, 2016; and July 27, 2006.
I. Policy Purpose
Bureau of Workers’ Compensation (BWC) provides workers’ compensation coverage
for Ohio employers. The Application for Coverage (U-3) 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 employers), public employer taxing districts (PEC employers) and authorized
Active date of
coverage: The date BWC
receives a completed U-3 with the application fee.
Application fee: A nonrefundable fee of $120.00 which is
equal to the minimum administrative annual charge as set forth in OAC 4123-17-26.
Ohio workers’ compensation coverage (U-3): Form used by an employer to apply for workers’
Quote number: A temporary number assigned to an
application and used for tracking purposes.
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. The blended rate 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.
Elective coverage: Optional coverage for business owners
or ministers in one of the following categories:
company acting as a sole proprietor;
company acting as a partnership;
as a corporation; and
associate ministers of a religious organization.
premium (EAP): The annual
estimate of premium utilizing the estimated payroll and approved rates. BWC’s
premium estimates are based on the most recently completed 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 of estimated payroll on the U-3 form.
modification (EM): An adjustment
factor applied to the base rate of the manual classification.
New employer: A new business entity with employees
for which any of the following is true:
The employer is a
new business entity in Ohio; or
The 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.
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.
Predecessor: The employer associated with the
business prior to the succession.
Successor: The employer associated with the
business after succession.
Employers must file
a U-3 form with BWC:
Employers may apply
online at BWC’s
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.
The employer must
provide the following information when applying for coverage as set forth in
Legal name and
business entity type (e.g., corporation, L.L.C., sole proprietorship,
Employer Identification number (FEIN) or, if applicable, Social Security Number
employer operations, including:
A description of the
work done or industry pursued by the employer;
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.
to whether the applicant for coverage has purchased an existing business or has
another associated policy;
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
Coverage policy for further details);
Signature of the
person completing the U-3 form; and
application fee of $120.00 equal to the minimum administrative annual charge as
set forth in OAC 4123-17-26.
BWC assigns a
temporary quote 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.
BWC contacts the
employer to obtain any missing information.
If the employer
fails to provide the required information, BWC:
Will deny the
employer’s application outlined in OAC 4123-17-13(A)(2);
May consider the
employer as non-complying as referenced in OAC 4123-14-01(A); and
iii. Will recover penalties and payments from
the employer as set forth in OAC 4123-14-02.
BWC 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:
SSN or FEIN;
Pursuit of industry;
Other Ohio workers’
compensation policies and other principals associated with all or part of the
Purchase or sale
If BWC identifies an
existing policy, BWC will deny the application and invoke Coverage Initiation.
Transfer or combine
the prior risk coverage to the employer as set forth in OAC 4123-17-02;
Require the employer
to assume any outstanding obligations under the prior risk coverage;
Require the payment
of outstanding obligations or the establishment of a payment plan prior to
granting new coverage; and
Impose other actions
authorized by law which BWC deems appropriate.
BWC will assign
manual classification(s) based on the duties performed.
An employer that has
a dishonored application fee payment, prior to the application being finalized,
is required to submit a new U-3 and application fee.
from a temporary agency for the allowance of up to ten policies by industrial
pursuit will be processed according to the Temporary
Labor Services policy.
For policies issued
on or after July 1, 2015, for PA employers and January 1, 2016, for PEC
employers, BWC will calculate and charge a No Coverage Penalty if the employer
filed the U-3 after the date one or more employees were hired to work in Ohio.
the No Coverage Penalty may contact BWC. BWC may adjust or waive the penalty if
the employer can document that there were no employees prior to the active date
For any claim that
occurs prior to the active date of coverage:
BWC will bill the
employer dollar for dollar for costs billed to the claim; and
The employer may be
referred to the Employer Compliance Department for a compliance audit.
Finalizing the U-3.
BWC will finalize an
employer’s application for coverage when all required information has been
provided, and there are no coverage initiation issues.
Once an application
is finalized by BWC the employer’s quote number is converted to a policy number
which will be used to identify the employer.
BWC will issue the
following to the employer:
A Certificate of
Ohio Workers’ Compensation Coverage.
A Notice of
Estimated Annual Premium and Premium Installment Schedule letter which
The estimated twelve
(12) month payroll from the U-3 used by BWC to calculate the employer’s
estimated premium due;
Individuals who have
iii. The manual classifications in which the
employer’s payroll is reportable;
The blended rates
for each of the manual classifications identified;
applied EM used in determining premium due;
estimated premium due for the applicable policy year; and
vii. An installment schedule that outlines
installment due dates and premium amounts. (Refer to Prospective
Billing Installment Payments for further details).
BWC will issue a
Certificate of Ohio Workers' Compensation Coverage. The certificate is only
valid if premium and assessments, including installments, are paid by the
applicable due date.
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.
BWC will apply a
credit in the amount of the application fee to the employer’s first installment
Coverage will become
effective upon timely receipt of the first premium installment payment,
retroactive to the date and time of receipt of the application:
customers, “the date and time of receipt of application” is determined by the
BWC time and date stamp.
applications, “the date and time of receipt of application” is determined by
the website time indicator.
iii. For mail-in applications, “the date and
time of receipt of application” is 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.
must be processed under the General
Employer Complaint Policy.
BWC has identified
specific extenuating circumstances that apply to Application for Coverage.
These extenuating circumstances are outlined in section IV.E. below.
circumstances for which relief may be granted.
Date. BWC may provide relief to the employer under the following extenuating circumstances:
employer was misinformed by its insurance agent/broker that the “all states”
endorsement on its insurance policy covered Ohio workers’ compensation. Merely
asserting the mistake does not establish this extenuating circumstance. The
employer must have written proof of the misinformation the employer was
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 failed to
forward or significantly delayed 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.
BWC may provide relief to the employer if the employer or their authorized
representative provides documentation such as:
A different federal
bank checking accounts;
Significant gap in
time between ceasing operations and purchase effective date.
No Coverage Penalty.
BWC may grant relief
of the penalty if the employer meets all of the following criteria:
The request must be
The employer must
provide actual payroll for the no coverage period to be used in calculating the
revised no coverage amount; and
iii. There must be no claims in the no
BWC will waive
penalty amounts of $120 or less provided the actual payroll was submitted as
Refer to the Successorship
policy on complaints related to this topic.
Later Effective Date
of Coverage. BWC may change the effective date of coverage upon request of the
employer if the employer meets the following criteria:
provided a date for employees first earning wages in Ohio after the date the
U-3 and application fee was received; and
The employer can
provide documentation establishing the date employees first earned wages in