Policy Name:	Sponsorship Certification
Policy #:	EP-19-01
Code/Rule Reference	Ohio Revised Code (ORC) 4123.29; Ohio Administrative Code (OAC) 4123-17-61.1, 4123-17-61, 4123-17-68.
Effective Date:	March 9, 2015
Approved:	Kevin R. Abrams, Chief of Employer Services
Origin:	Employer Policy
Supersedes:	Sponsor Certification policy issued July 1, 2009; Group Marketing policy issued October 5, 2009; Sponsoring Organization Complaint Policy revised February 8, 2012.
History:	New policy, July 1, 2009. Revised March 9, 2015.
Review Date:	March 9, 2020

 

 

I.      Policy Purpose

 

The purpose of this policy is to ensure that the Ohio Bureau of Workers’ Compensation (BWC) certifies Sponsoring Organizations and that certified Sponsoring Organizations market Group programs in accordance with the applicable laws and rules.

 

II.    Applicability

 

This policy applies to BWC Employer Programs, BWC Division of Safety and Hygiene (DSH), Sponsoring Organizations, and employer authorized representatives.

 

III.   Definitions

A.    Affiliated Sponsoring Organization: A Sponsoring Organization whose members are brokered, borrowed, shared, or co-opted for inclusion in a certified Sponsoring Organization’s Group.

B.    Capacity: A sanction that BWC may apply to a Sponsoring Organization that violates Group marketing requirements.

1.    For a Sponsoring Organization that files a Group roster(s) with BWC for the current policy year, “capacity” means the Sponsoring Organization will not be able to add new employers and affiliate with other Sponsoring Organizations for the upcoming policy year.

2.    For a Sponsoring Organization that did not file a Group roster with BWC for the current policy year, “capacity” means the Sponsoring Organization will not be able to form Groups or affiliate with other Sponsoring Organizations for the upcoming policy year.

C.   Governing member: A member with full voting privileges and vested with all of the rights and benefits conferred upon members of the organization.

D.   Group program: Means either the Group Experience Rating Program or the Group Retrospective Rating Program.

E.    Representative: A term that includes, but is not limited to, a third party administrator (TPA), a broker, or a marketer.

F.    Sponsoring Organization: An entity (usually a business entity) with governing members, which has been certified by BWC to sponsor and market Group programs through BWC.

G.   Unattainable: A term relating to specific discounts or refunds that a Sponsoring Organization may offer or estimate to employers.

1.    For Group Experience Rating “unattainable” means discounts that exceed the maximum discount when combining the lowest experience modifier and any applicable break-even factors as approved by the BWC Board of Directors.

2.    For Group Retrospective Rating “unattainable” means refunds that exceed the maximum possible refund when considering the basic premium factor and the maximum premium ratio as approved by the BWC Board of Directors.

IV.  Policy

A.    BWC will certify a Sponsoring Organization and permit it to sponsor Group programs if all requirements are met as outlined in ORC 4123.29 and OAC 4123-17-61.1.

1.    BWC reserves the right to use all the information submitted to BWC, as well as any other information available, to make the certification decision.

2.    BWC may certify a parent corporation as a Sponsoring Organization if it meets all of the requirements. The parent corporation may be a member of a Group of its subsidiary corporations for purposes of Group programs.

B.    Certification requirements.

1.    The Sponsoring Organization must:

a.    Have been in existence for at least two years prior to filing a Group program application with BWC. Group program application deadlines are outlined in OAC 4123-17-74, Appendix A and B.

b.    Be formed for a purpose other than obtaining Group workers’ compensation coverage.

c.     Be independent of, and cannot be formed by, a TPA.

d.    Have employers in its Groups that are governing members of the Sponsoring Organization or an affiliated Sponsoring Organization.

e.    Improve the accident prevention and claims handling of the employers in its Groups.

f.      Be in compliance with all BWC rules.

g.    Have the capability, or its authorized representative must have the capability, to send and receive secure electronic (FTP – file transfer protocol) files.

2.    The Sponsoring Organization has the burden of proof to demonstrate it meets certification requirements.

3.    See BWC Policy “Group Experience Rating Program” for Group Policy application and individual employer requirements.

C.   Sponsoring Organization application.

1.    The Sponsoring Organization must provide BWC:

a.    A fully completed and signed Sponsor Certification Application (U-149).

b.    A signed Certification Safety Agreement for Sponsors and Affiliate Sponsors.

c.     Its workers’ compensation policy number and proof of active workers’ compensation coverage.

d.    The name of its TPA, if applicable.

e.    A list of all affiliated Sponsoring Organizations.

f.      Copies of its articles of incorporation, mission statement, and marketing material. Marketing material includes, but is not limited to:

i.      Web site.

ii.     Brochures.

iii.    Description of services related to group programs and other programs.

2.    With reasonable notice, BWC may request additional information from the Sponsoring Organization. BWC may review the following information at a location specified by the Sponsoring Organization:

a.    Financial information.

b.    Dues structure.

c.     Revenue sources.

d.    Table of organization.

e.    A comprehensive membership roster.

f.      By-laws and/or a list of corporate officers.

3.    BWC may decertify or refuse to certify a Sponsoring Organization that:

a.    Fails to provide accurate information or submits false information.

b.    Fails to comply with all BWC rules.

4.    A Sponsoring Organization that is denied certification may appeal the decision to the BWC Adjudicating Committee.

5.    A Sponsoring Organization that is denied certification may reapply one year after the latest certification denial if:

a.    All administrative appeals have been exhausted, and;

b.    The Sponsoring Organization has corrected certification deficiencies.

D.   BWC responsibilities.

1.    BWC will report the aggregate performance of all Groups following the conclusion of each policy year.

2.    BWC will provide the BWC Board of Directors with an annual report regarding sanctions and corrective actions taken against Sponsoring Organizations that violate Group marketing requirements. The report will be submitted to the Board no later than April of each year.

3.    BWC will review the certification of a Sponsoring Organization at least once every three years, or on a more frequent basis as determined by BWC.

E.    Safety program requirements. (see OAC 4123-17-68)

1.    The Sponsoring Organization or affiliated Sponsoring Organization must submit the Safety Requirements Annual Report (SH-2) to DSH.

a.    The SH-2 must be submitted by the last business day of August for private employer Groups and by the last business day of February for public employer taxing district Groups.

b.    If the Sponsoring Organization is reapplying for a Group program, the SH-2 must also:

i.      Document the effectiveness of prior programs and any proposed improvements to these programs.

ii.     Identify the most common injuries among Group members and strategies aimed at increasing awareness and prevention of these injuries.

2.    DSH will review the Sponsoring Organization’s SH-2.

3.    DSH will make a recommendation to the BWC Employer Programs unit on whether the Group’s SH-2 is acceptable for the following policy year.

4.    BWC Employer Programs will consider the DSH recommendation when deciding whether to recertify a Sponsoring Organization.

5.    All primary and affiliated sponsoring organizations shall be required to sponsor a minimum of eight hours of safety training during the rating year for members of that group.

6.    If an employer in a Group program sustains a claim within the “green period,” the employer must complete an online accident analysis form and an online safety class or two hours of safety training.

F.    Group marketing.

1.    A Sponsoring Organization must be registered and certified by BWC prior to marketing Group programs.

2.    A Sponsoring Organization, affiliated Sponsoring Organization, or representative may not offer employers:

a.    Unattainable Group program discounts or refunds.

b.    Group program discounts or refunds for a future policy year until the factors used to calculate such discounts or refunds are approved by the BWC Board of Directors.

3.    A Sponsoring Organization, affiliated Sponsoring Organization, or representative may not provide marketing material that is false. Prohibited marketing material is any communication that:

a.    Instructs employers to provide false information on Group program forms, including the Temporary Authorization to Review Information (AC-3), Employer Statement for Group-Experience-Rating Program (AC-26), and Employer Statement for Group Retrospective Rating Program (U-153).

b.    Claims the Sponsoring Organization, affiliated Sponsoring Organization, or representative is endorsed by BWC or the state of Ohio.

4.    BWC may apply sanctions against a Sponsoring Organization that violates Group marketing requirements.

a.    BWC may place a Sponsoring Organization at capacity if it offers or estimates unattainable Group program discounts or refunds.

b.    BWC will immediately revoke the certification of a Sponsoring Organization that:

i.      Instructs an employer to provide false information on Group program forms, or;

ii.     Engages in any action that results in knowingly false information being submitted to BWC on Group program forms, or;

iii.    Claims to be endorsed by BWC or the state of Ohio.

c.     For those circumstances which do not require mandatory sanctions BWC may:

i.      Issue a letter to the Sponsoring Organization outlining the Group marketing requirements that were violated. BWC may also recommend corrective actions.

ii.     Require the Sponsoring Organization to communicate corrected information to employers who were offered unattainable discounts or refunds.

5.    BWC Employer Programs will investigate allegations of Group marketing violations. BWC Employer Programs may:

a.    Track the number of violations by each Sponsoring Organization.

b.    Place at capacity, or decertify, a Sponsoring Organization for repeated violations of the Group marketing requirements.

G.   Resolution of complaints.

1.    A Sponsoring Organization that is denied certification may file a complaint.

2.    Sponsoring Organization complaints should be processed as “employer” complaints under the General Employer Complaint Policy.

3.    BWC has not identified any extenuating circumstances specific to Sponsorship Certification. For example, the following are not extenuating circumstances:

a.    Changes to the management staff within the Sponsoring Organization.

b.    Change in Sponsoring Organization personnel or TPA.

c.     TPA error.

d.    Sponsoring Organization error.

e.    Confusion over Ohio workers’ compensation laws and rules.

4.    BWC Employer Programs will investigate the Sponsoring Organization’s complaint to ascertain:

a.    The relief that the Sponsoring Organization is requesting to resolve the complaint.

b.    The reasons the Sponsoring Organization is requesting relief.

c.     Whether the Sponsoring Organization has met certification criteria and marketing requirements as outlined in this policy.

d.    Whether the Sponsoring Organization meets criteria for granting relief under an extenuating circumstance.