Policy Name:	Transitional Work Bonus
Policy #:	EP-20-02
Code/Rule Reference	ORC 4125.01 and 4133.01. OAC 4123-6-01, 4123-6-02.2, 4123-17-14, 4123-17-15, 4123-17-16, 4123-17-55; 4123-17-74, and Appendices A, B, and C; 4123-17-75 and Appendix.
Effective Date:	July 1, 2024
Approved:	Rex Blateri, Chief of Employer Services
Origin:	Employer Policy
Supersedes:	Transitional Work Performance Bonus dated July 1, 2023.
History:	Revised October 23, 2024; June 27, 2023; March 30, 2022; August 22, 2019; December 29, 2016; May 12, 2015. New policy issued October 25, 2013.
Review Date:	July 1, 2029

 

I.       Policy Purpose

 

The Ohio Bureau of Workers’ Compensation (BWC) provides a Transitional Work Bonus to eligible employers that meet program requirements in accordance with all applicable laws and rules. This policy addresses Employer Services’ administration of the Transitional Work Bonus. Medical Policy’s Transitional Work Bonus policy is found here.

II.     Applicability

The policy applies to employers, authorized representatives, BWC Employer Programs, and BWC Transitional Work Unit.

III.   Definitions

A.      Alternate employer organization (AEO): A sole proprietor, partnership, association, limited liability company, or corporation that enters into an agreement with one or more client employers for the purposes of providing human resource management services and sharing employer responsibility and liability. AEO does not include a temporary service agency. ORC 4133.01(A).

B.      Client employer: A sole proprietor, partnership, association, limited liability company, or corporation that enters into an AEO agreement and shares employee responsibility and liability with an AEO, or that enters into a Professional Employer Organization (PEO) agreement and is assigned shared employees by the PEO. OAC 4123-17-15.

C.      Professional employer organization (PEO): A sole proprietor, partnership, association, limited liability company or corporation that enters into an agreement with one or more client employers for the purpose of co-employing all or part of the client employer’s workforce at the client employer’s work site. PEO does not include a temporary service agency. ORC 4125.01(D).

D.     Program period: The policy year an employer participates in the Transitional Work Bonus program.

E.      Pure premium: The employer’s calculated premiums before Disabled Workers’ Relief Fund (DWRF) assessments are added.

F.      Transitional work: A work-site program that provides an individualized interim step in the recovery of an injured worker (IW) with job restrictions resulting from the allowed conditions in the claim. Developed in conjunction with the employer and the IW, or with others as needed, including, but not limited to the collective bargaining agent (where applicable), the physician of record, rehabilitation professionals, and the managed care organization (MCO), a transitional work program assists the IW in progressively performing the duties of a targeted job. OAC 4123-6-01(Y).

IV.   Policy

A.      BWC will gradually phase out the Transitional Work Bonus by reducing the percentage of the employer’s pure premium used in the Transitional Work Bonus calculation and by implementing a maximum bonus amount per employer. The last program period for the Transitional Work Bonus is the policy year beginning July 1, 2025, for private employers (PA employers), and the policy year beginning January 1, 2026, for public employer taxing districts (PEC employers).

B.      Eligibility criteria.

1.      The employer must be a state fund PA employer or a state fund PEC employer.

2.      As of the application deadline, the employer must:

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

b.      Be in an active policy status, which does not include an employer with a coverage status of "no coverage" or "lapsed”;

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

d.      Report actual payroll for the preceding policy year and pay any premium due upon reconciliation of estimated premium and actual premium for that policy year. See the Payroll True-Up policy for additional information.

3.      The following employers are not eligible for the Transitional Work Bonus program:

a.      State agencies;

b.      Self-insuring employers; and

c.       Employers paying only the minimum administrative charge for the applicable payroll period.

4.      An employer who is determined to be ineligible for the Transitional Work Bonus program may apply for a subsequent program period if the employer becomes eligible.

C.      AEO and PEO participation. An AEO or a PEO may participate in the Transitional Work Bonus program as follows.

1.      For Transitional Work Bonus calculation purposes, BWC assigns eligible claims to the employer of record on the date of injury, regardless of a subsequent AEO agreement termination, a subsequent PEO agreement termination, or change to the PEO agreement.

2.      Transitional work may be provided under a transitional work program of either the AEO or the client employer, or the PEO or the client employer.

D.     Application requirements and BWC evaluation of application.

1.      An employer must file an Application for Transitional Work Bonus Program (TWB-1) with BWC.

2.      The TWB-1 must be signed by the chief executive officer (CEO) or a designated management representative of the employer who certifies to BWC that the employer will comply with all program requirements.

3.      BWC automatically renews the employer for each subsequent program period provided the employer meets all eligibility requirements in section IV.B. of this policy.

4.      Application deadlines:

a.      For PA employers, the application deadline is the last business day of May prior to the upcoming July 1 program period.

b.      For PEC employers, the application deadline is the last business day of November prior to the upcoming January 1 program period.

5.      An employer who opts out, voluntarily withdraws, or is removed must file a new TWB-1 to participate in a future program period.

E.      Operation of program.

1.      Calculation and payment of the Transitional Work Bonus.

a.      To qualify for the Transitional Work Bonus an employer must:

i.        Have coverage that is in an active status at the time of calculation; and

ii.      Report actual payroll for the program period and pay any premium due upon reconciliation of estimated premium and actual premium. An employer will be deemed to have met this requirement if BWC receives the payroll report and the employer pays premium associated with such report before the expiration of any grace period.

b.      BWC will evaluate all claims with injury dates that occur during the applicable program period to determine transitional work potential and utilization.

c.       The Transitional Work Bonus calculation date occurs six months after the end of the applicable program period. This delayed review provides the employer the opportunity to use transitional work in claims that occur late in the program period.

d.      The employer's Transitional Work Bonus will be based on how successfully the employer utilized transitional work in claims that had the potential for transitional work.

e.      BWC calculates the employer's percentage of claims with potential for transitional work in which transitional work was used.

i.        This percentage is multiplied by a percentage of the employer's pure premium for the applicable program period, as outlined in the Appendix of OAC 4123-17-75.

ii.      For program periods beginning prior to July 1, 2024, for PA employers, and program periods beginning prior to January 1, 2025, for PEC employers, the maximum percentage of the employer’s pure premium used in the Transitional Work Bonus calculation is ten percent (10%). There is no maximum rebate limit per employer.

iii.    For the program period beginning July 1, 2024, for PA employers, and the program period beginning January 1, 2025, for PEC employers, the maximum percentage of the employer’s pure premium used in the Transitional Work Bonus calculation is seven percent (7%). The maximum rebate limit is $25,000 per employer.

iv.     For the program period beginning July 1, 2025, for PA employers, and the program period beginning January 1, 2026, for PEC employers, the maximum percentage of the employer’s pure premium used in the Transitional Work Bonus calculation is four percent (4%). The maximum rebate limit is $25,000 per employer.

v.       BWC posts the Transitional Work Bonus as a credit to the employer's account. The Transitional Work Bonus is refunded to the employer after any account balance is absorbed.

f.        The Transitional Work Bonus and the incentives earned through participation in other bonus and rebate incentive programs cannot reduce an employer's premium due below the amount of the minimum administrative charge as set forth in OAC 4123-17-26.

g.      BWC will not issue a Transitional Work Bonus to an employer paying only the minimum administrative charge for the applicable program period.

h.      Rate adjustments made to an employer's account after the issuance of the Transitional Work Bonus may result in recalculation of the Transitional Work Bonus.

2.      BWC will require an employer to repay any Transitional Work Bonus the employer was not entitled to receive.

3.      An employer may, during its participation in the Transitional Work Bonus program, participate in other compatible BWC programs. Employer program compatibility is outlined in OAC 4123-17-74, Appendix C.

4.      See Medical Policy's Transitional Work Bonus policy for information about BWC's monitoring of participating employer utilization of transitional work plans for bonus payment calculation.

F.      Exit or removal from program.

1.      An employer may voluntarily withdraw from the Transitional Work Bonus program by notifying BWC.

2.      BWC will remove an employer from the Transitional Work Bonus program for the current program period who fails to timely report actual payroll for the preceding policy year and pay any premium due upon reconciliation of estimated premium and actual premium. BWC will not remove an employer if BWC receives the payroll report, and the employer pays premium associated with such report before the expiration of any grace period.

3.      An employer who voluntarily withdraws or is removed from the Transitional Work Bonus program is not eligible for a Transitional Work Bonus for that program period.

4.      An employer who elects to opt out of the Transitional Work Bonus program for the subsequent program period must notify BWC by the application deadline as set forth in OAC 4123-17-74.

G.     Combinations and transfers.

1.      Predecessor: Enrolled in the Transitional Work Bonus program.

Successor: New employer without prior coverage.

Action: Successor is not eligible for the Transitional Work Bonus program until the next program period. Successor is transferred predecessor’s rights and obligations under the Transitional Work Bonus program. Any Transitional Work Bonus for predecessor’s participation is based on predecessor’s pure premium for the policy year.

2.      Predecessor: Enrolled in the Transitional Work Bonus program.

Successor: Not enrolled in the Transitional Work Bonus program, includes a self-insuring employer.

Action: Successor is not enrolled in the Transitional Work Bonus program. Successor is transferred predecessor’s rights and obligations under the Transitional Work Bonus program; however, any Transitional Work Bonus is based on predecessor’s pure premium for the policy year.

3.      Predecessor: Not enrolled in the Transitional Work Bonus program.

Successor: Enrolled in the Transitional Work Bonus program.

Action: Successor remains eligible for the Transitional Work Bonus program for the entire policy year.

4.      Predecessor: Enrolled in the Transitional Work Bonus program

Successor: Enrolled in the Transitional Work Bonus program.

Action: Successor remains eligible for the Transitional Work Bonus program for the entire policy year. Successor is transferred predecessor’s rights and obligations under the Transitional Work Bonus program. Any Transitional Work Bonus for predecessor’s participation is based on predecessor’s pure premium for the policy year.

5.      Predecessor: Enrolled in the Transitional Work Bonus program

Successor: Debtor-in-possession.

Action: An individual employer who is participating in the Transitional Work Bonus program and becomes a debtor-in-possession during the policy year remains eligible for the Transitional Work Bonus program for the entire policy year.

6.      Partial transfer.

Predecessor: Enrolled in the Transitional Work Bonus program.

Successor: Not enrolled in the Transitional Work Bonus program.

Action: The predecessor remains eligible for the Transitional Work Bonus program for the entire policy year. Claims incurred prior to the date of the partial transfer are included in the predecessor’s Transitional Work Bonus calculation. The successor remains in its current rating plan and is responsible for any claims incurred from the part of the predecessor entity transferred, beginning on the date of the partial transfer.

H.     Resolution of complaints.

1.      Employer complaints filed due to program eligibility issues, such as lapse days or coverage status, are addressed by the Employer Programs Unit. Employer complaints filed due to transitional work plan issues, such as an employer believes it did not receive appropriate credit for a return to work, are addressed by the Transitional Work Unit.

2.      An employer, whose application for the Transitional Work Bonus program has been denied, or who disagrees with BWC's Transitional Work Bonus determination, may file an appeal to BWC's Adjudicating Committee pursuant to ORC 4123.291 and OAC 4123-14-06.

3.      BWC has not identified any program-specific extenuating circumstances that apply to the Transitional Work Bonus program. Employer complaints are processed under the General Employer Complaint Policy.