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Policy
Name:
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Application
to Pay Compensation Directly (SI-6)
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Policy #:
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SI-01-02
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Code/Rule
Reference
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Ohio
Revised Code (ORC) 4123.35(B) & Ohio Administrative Code
(OAC) 4123-19-03
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Effective
Date:
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New
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Approved:
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Winnie
Warren, Interim Chief Employer Services
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Origin:
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Self-Insured
Department/Employer Services
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History:
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New
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Review
Date:
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11/01/2024
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I. Policy Purpose
Employers
who wish to be granted the privilege of self-insurance must meet specific
financial and administrative requirements. This policy outlines the requirements to apply to become self-insured.
II. Applicability
This
policy applies to applicants for SI status. This includes State Fund Employers
(private and public), out-of-state employers, and subsidiaries of Self-Insured
employers.
III. Definitions
A.
Designated Ohio
Administrator: An
employee of the SI employer applicant who has one or more years of experience
as a workers’ compensation administrator for a SI employer in Ohio.
B.
Self-Insuring
Employer (SI Employer):
An employer that has been granted the privilege of paying workers compensation
and benefits directly.
C.
Self-Insured
Review Panel (SIRP): A
panel of three (3) persons appointed by the BWC administrator to provide
employers with hearings on matters referred to the panel, or as requested by
the employer.
D.
State Fund Employer
(SF Employer): A
private employer (PA) or public employer (PE) that is insured through the State
Insurance Fund for workers’ compensation.
IV. Policy
A.
BWC will consider
the factors outlined in ORC 4123.35(B) when evaluating private and public
employers’ qualifications for self-insurance. ORC 4123.35(B)(1) provides criteria for private
employers and ORC 4123.35(B)(2) provides criteria for public
employers. The applicant must demonstrate the ability to meet all financial and
administrative requirements.
B.
Financial
Requirements:
1.
Private employers;
a.
must provide five
(5) years of Generally Accepted Accounting Principles (GAAP) audited financial
statements which will be used to evaluate the applicant’s financial strength
and ability to meet the financial requirements of self-insurance without the
need for additional security;
b.
must ensure
financial records include the balance sheets and a profit and loss history for
the last five (5) years; be audited by a certified public accountant (CPA) in
accordance with GAAP; and include a CPA’s audit opinion;
c.
must be aware BWC
may utilize a credit reporting service that offers financial and other business
information about individual employers.
2.
Public employers;
a.
must provide the
previous five annual audits completed by the Auditor of the State, or County
Auditor for a board of county commissioners;
b.
must submit five (5)
years audited financial statements if a public hospital;
c.
must ensure the
audited financial statements are prepared in accordance with GAAP or other
comprehensive basis of accounting as permitted in Ohio Auditor of State bulletin 2005-002.
3.
The self-insured
department will not approve an application if the financial review determines
additional security is required based on the securitization matrix.
C.
Administrative
Requirements:
1.
Provide organizational
plan for administering the workers’ compensation program including where the
official SI claim files will be housed;
2.
Provide proposed
plan to inform employees of the change from the state fund to self-insurance;
3.
Provide Medical
Management Plan;
4.
Provide the name and
years of experience of the applicant’s employee that will be the designated
Ohio administrator.
D.
Application
Requirements:
1.
Initial Application
for Authority to Pay Compensation Directly (SI-6);
2.
Permanent Authorization
(AC-2) if applicable;
3.
Election to Withdraw
from Claims Reimbursement Fund (SI-44) if you choose to opt out;
4.
Unconditional and
Continuing Guarantee (SI-38) (from the ultimate domestic parent);
5.
Agreement between
Employer and the Ohio Bureau of Workers’ Compensation Regarding Amount of SI
Buyout (SI-16);
6.
Private employer:
Ohio Secretary of State Certificate of Good Standing;
7.
Public Employer:
Appropriate State certified charter;
8.
Corporate organizational
structure chart detailing the ultimate domestic parent and all subsidiaries
with employees and payroll.
E.
Prior to final
approval, BWC will be conducting an orientation to ensure the applicant is
prepared for the responsibilities of an SI employer.
F.
If the application
is approved, BWC will notify the applicant in writing of the decision and the
effective starting date for the policy will be determined in conjunction with
the SI Department.
G.
If the application
is denied, BWC will notify the applicant in writing of the decision and the
employer will have fourteen (14) days from receipt to appeal the decision. All
appeals are to be in writing and submitted electronically via the SI Inquiries
email box at SIINQ@bwc.state.oh.us.
V. Resolution of Complaints
A.
Any complaints or
disputes related to this policy must be submitted in writing to the SI
Department via mail or email as detailed in the Self-Insured Employer Dispute/Protest
Policy.
Ohio Bureau of Workers’ Compensation
Self-Insured Department
30 W. Spring St., L-22
Columbus, Ohio 43215-2256
Email: SIINQ@bwc.state.oh.us
B.
If the SI employer
disagrees with the SI Department’s formal written response, the SI employer may
file a written request to appeal the decision to the SIRP.