OhioBWC - Basics: (Policy library) - File

Employer Policy


Override Policy


Policy Effective Date: April 25, 2007

Policy Revised: November 30, 2007





The Override Policy has been modified to ensure that any override or block to an individual employer’s or Group calculated experience modifier (EM), experience claim cost or claim reserve will be processed according to proper internal controls. The policy will ensure that overrides are made as directed by the source document, that proper authorization is obtained and that management is properly informed.



Guiding Principles


·        The term “override” refers to the process in which the individual employer’s EM, claim cost or claim reserve is manually calculated and revised for rate making purposes outside of the established rate making process or rate adjustment guidelines. The override is usually associated with a deviation from the source system data or established rate calculation rules/laws used to generate the premium rate.


·        Overrides are manually applied to the EM, experience claim cost or claim reserve for specific policy years or payroll periods. Overrides may result in financial impacts to employers and the state fund. It is very important that they are made with sound internal controls to assure integrity and compliance to applicable laws.


·        Employer premium rates are calculated by the rate making system based on actual payroll and claim losses, pursuant to Ohio Administrative Code (OAC) 4123-17-03.  As the result of business or court decisions however it is sometimes necessary and wise to adjust an employer’s EM, experience claim cost or claim reserve even when the controlling payroll and losses are accurately captured on the source systems, pursuant to Ohio Revised Code (ORC) 4123.34(C) allowing the Administrator to determine the appropriate rates.


·        It is also the policy of the Adjudication Unit to postpone collection of outstanding balance during the appeal process to the Adjudication Committee.  Therefore the Override function can also be used to block or reverse the financial premium impact to an individual employer or a Group plan during the administrative appeal (Adjudication) process.  In the case of a block placed upon the individual employers EM or Group rating EM, subsequent events that would normally cause a recalculation of the experience will be postponed as well until final adjudication of the protested issue as no legal authority exist to permanently perform blocks.


·        Overrides can be generated from various sources including: court orders, Administrator’s Designee/Adjudication orders, rate adjustment processes requiring an override pursuant to Ohio Administrative or Revised code, Executive decisions (not dictated by rules/laws, just deciding the final amount or rate) and system corrections.





·        Security profiles have been established in Rates & Payments to allow only Underwriters in the Rate Adjustment unit of the Actuarial Division to process manual overrides to employer’s and Group EMs. The Supervisor of Rate Adjustments will not be allowed to update EMs but will assign the work to underwriting staff.


·        Before an EM override is made, the Supervisor of Rate Adjustments will assure the following information is captured to authorize an Underwriter to make the adjustment: requestor, reason for override, policy demographic information, policy year/periods affected, calculated EM, adjusted EM and authorizing signature(s). This information will then be permanently placed in the appropriate risk file.


·        Description of Override Types and Documentation Required for Approval:


(The goal for the supporting documentation is to ensure that BWC establishes standard documentation protocols so that Executive Staff can expect to see the same supporting evidence based on the type of request.)


·        Court Orders


·        Description: Involves court orders from a hearing or settlement of dispute.


·        Documentation Required for Approval


·        Official Court Orders or Settlement Agreement approved by the court.



·        Administrator’s Designee/Adjudication Committee Orders


·        Description: Involves orders issued from either adjudicatory body as a result of the filing of an employer’s dispute, pursuant to OAC 4123-14-06.  Executive Staff sign off of any override ordered through the adjudication process is for acknowledgement only, not approval. NOTE: Adjudicating Committee will also request that an override be performed to eliminate or reverse the financial impact of a rate adjustment to stop invoices from being generated during the appeal process.  This is commonly used for Group rating protests.


·        Documentation Required for Approval


·        Official order from the Adjudication Committee or the Administrator’s Designee.


·        Documentation may also include any information included in the hearing process, including but not limited to: protest letters, statement of facts, monetary impact of override, and communication to employer/Group administrator.



·        Executive Decision


·        Description involves a directive given by Executive Staff to override or revise the data to arrive at a determined outcome.  This would include situations such as a determination after review that the EM is too high and BWC is collecting more premium than needed from the employer, a claim has questionable cost used in the experience or the MIRA reserve is found to be excessive for the type of injury or future liability of the claim, pursuant to ORC 4123.34.


·        Documentation Required for Approval


·        Justification


·        OAC or ORC citation, when applicable


·        The specific issue or on what grounds they are protesting,


·        The reason for BWC to grant override of calculated data (or what our obligation is) to do the override.


·        All calculations and worksheets completed to arrive at the revised EM, claim cost or MIRA reserve amount and any document referring to the monetary impact of the override.


·        A detailed explanation as to why the protest or issue was not directed to the adjudication process.


·        If the issue has previous been addressed at the Adjudication level, the previous hearing orders and statement of facts must be included as documentation.



·        System Correction (Fix)


·        Description: Occurs where the actual amount or percentage cannot be accurately displayed or used in the premium rate calculation due to system limitations.  In most cases, the amount or percentage is calculated pursuant to rate making rules off line and verified for accuracy.  This function is used primarily to resolve interface failures within the rate making system, such as the payroll suspension project or claim cost discrepancies.


·        Documentation Required for Approval:


·        Statement from IT analyst or system managers that override is necessary in lieu of any system enhancement or program change


·        All calculations and worksheets completed to arrive at the revised EM, claim cost or MIRA reserve amount


·        A detailed description of the issue or problem involving the systems



·        Rate Adjustment/Procedure Overrides


·        Description: Involves EM overrides as a result of the employer returning to the state fund or BWC granting the employer the right to use out of state experience in the calculation of the Ohio premium rates, pursuant to OAC 4123-17-03.1 and OAC 4123-19-05 respectively.


·        Documentation Required for Approval


·        OAC or ORC citation


·        All calculations and worksheets completed to arrive at the revised EM.



·        EM Block


·        Description: Block occurs where an experience modifier for either an individual policy or Group EM is blocked from being recalculated as a result of an event that has caused the policy/Group to be set up for re-rate.


·        Is primarily used in the appeal process to Adjudication as a result of the Adjudication policy to postpone any collection efforts on outstanding balances during the appeal process.


·        Can also be used when a system error has been identified and BWC determines that there will be a financial impact due to the system error if the policy is re-rated.


·        Is a temporary “work around” fix pending final resolution approval as no legal authority exists for a permanent Block?


·        Documentation Required for Approval


·        A detailed explanation of the issue


·        All calculations and worksheets completed to describe the potential financial impact to all parties if the policy/Group was re-rated.


·        Where large numbers of policies may be involved in a protest, a block may be the most efficient way to temporarily place balance adjustments in appeal or hold status pending final resolution of the issue.


Note: In addition to the items listed above under “Documentation Required for Approval”, all override requests must be submitted on the override request form completed in its entirety by the Actuarial Division and have attached the documentation required for approval.



·        “Authorizing approvals or signatures” represents that each signature agrees with the need to override the data in question and authorizes the processing of the override.  Each override type requires the following authorizing approvals.


·        Court Orders: an official magistrate , however executive signatures will be obtained for acknowledgement purposes only


·        Administrator’s Designee/Adjudicating Committee orders: official orders, however executive signatures will be obtained for acknowledgement purposes only


·        Executive Decision: BWC Administrator, Chief of Customer Services, Chief Actuarial Officer and Director of Actuarial,


·        System corrections:  BWC Administrator, Chief Information Officer, Chief of Customer Services, Chief Actuarial Officer and Director of Actuarial


·        Rate Adjustment Unit Override (pursuant to OAC or ORC): BWC Administrator, Chief of Customer Services, Chief Actuarial Officer and Director of Actuarial.



·        Tracking Override Decisions:  An IT report will be produced monthly that captures all EM overrides/blocks, experience claim cost adjustments and claim reserve overrides completed that month. The EM Override report will be sent to the Chief Actuarial Officer, Chief of Customer Services, Director of Actuarial, as well as made available to others as necessary especially those who requested the overrides.  The report will be reconciled with the EM override activity log listing all approved requests and the updating Underwriter prepared by Rate Adjustment Unit each month.



Customers Impacted




·        Actuarial Division-Rate Adjustment Unit


·        Executive Staff


·        Internal Audit




·        None