Public Employers to Save $380 Million
in Workers' Comp Costs

The Ohio Bureau of Workers' Compensation (BWC) today announced savings of $380 million for public employers over the next two years. The first savings, a refund of more than $180 million, will be mailed to public employers by March 1, 2001. The remaining $200 million will appear as a one-time 75-percent premium reduction on the bill they receive in 2002.

The announcement was made at the monthly meeting of the Workers' Compensation Oversight Commission. These savings for Ohio's public employers, including cities, counties and school districts, is made possible by improved efficiency in the workers' comp system as well as better-than-expected returns on the bureau's investments. The savings will not impact injured workers' benefits.

"This refund comes at a good time for Ohio's public employers. These employers have the opportunity to use this money to implement safety measures and programs that will help prevent injuries, reduce claims costs, and save communities money," said James Conrad, BWC Administrator/CEO.

The heightened-awareness of safety is the result of a rising trend of public employer claims each year since 1997. This rise in the number of claims will be reflected in an average 3.7-percent increase in public sector taxing districts' overall premiums for the year 2001. Thus, public employers will see, on average, a 3.7-percent increase in their premiums due to the higher number of claims, but the one-time refund and one-time reduction will actually reduce their costs.

Confused? Premium rates, by law, are based on expected losses. When public employers have an increase in the number of claims, losses are expected to rise, thus premium rates must rise. Refunds and one-time premium reductions are based on efficiencies within the bureau and successful investment policies. These are one-time events and are independent from rate setting. Thus, this is a unique opportunity for public employers to use their refund to reduce injuries and limit future premium increases.

"As stewards of the public's trust, public employers must be responsible to keep costs low and our citizens safe," Conrad said. "These rising rates are caused by injuries and employers are in the driver's seat when it comes to work place safety. Therefore, we strongly encourage public employers to help stop this increasing trend in accidents and use these refunds to invest in safety practices."

The 3.7-percent rate increase for public-sector employers was voted on and approved by the Workers' Compensation Oversight Commission on Oct. 12, 2000. Conversely, private-sector employers' workers' comp rates have been declining since 1997 as their injury rates have also declined.

"All employers have a role to play by making safety work for them in preventing work place injuries and reducing associated workers' compensation costs," Conrad said.