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Media Advisory: Jan. 22, 2010

BWC Board of Directors Continues Expansion of Program Options for Ohio Employers

COLUMBUS – The Ohio Bureau of Workers’ Compensation (BWC) Board of Directors today expanded the options for the deductible program that was put in place last year. The Large Deductible Program will offer deductible levels between $25,000 and $200,000 and is intended to give large employers more options to mold a workers’ compensation plan that will best suit their business needs.

“The Large Deductible Program is a true insurance program that is offering employers another option to save on their workers’ compensation costs by accepting a particular level of risk,” said BWC Administrator Marsha Ryan. “This and our arsenal of performance-based new programs are helping employers mold their workers’ compensation plan to fit their overall business needs, while keeping safety at the forefront of those plans.”

With the Large Deductible Program, an employer agrees to pay the portion of a claim that falls below the selected deductible level. For taking on this degree of risk, the employer receives a premium discount.

Last year, BWC implemented its first-ever Deductible Program offering five deductible levels from $500 up to $10,000 per claim. For the program year beginning July 1, 2009, 580 employers registered for the smaller plan. With the Large Deductible Program, qualified employers can now choose from deductible levels of $25,000, $50,000, $100,000, or $200,000, and a “stop loss” option limits the employers’ exposure at three times the per claim limit chosen. The Large Deductible Program will be available to employers beginning July 1, 2010, with registration for either program taking place from March 1 through April 30.

In other actions, the Board adopted a new Hospital Outpatient Fee Schedule that covers services delivered during emergency department visits that may be the first treatment following an injury; as well as surgery or rehabilitation services intended to get an injured worker back to work. Hospital outpatient bills represent approximately seven percent of the bills BWC processes annually; and about 17 percent of BWC’s overall medical expenses.

Also, a new prospective payment methodology for hospital outpatient service was included that promotes consistency of payments. By allowing BWC to establish rates and policies prior to the delivery of services to injured workers, this methodology is expected to encourage facilities to improve efficiency when providing care. The hospital outpatient fee schedule rule was last updated September 1, 2007.

The Board of Directors also hired Mellon Capital Management as a BWC Passive Index Manager for the State Insurance Fund (SIF). Mellon Capital Management will manage a portion of the Fund’s Russell 3000 Benchmark Index equities mandate. The firm responded to a request for proposal posted by BWC on July 2, 2009, and will manage assets of the SIF under the supervision of the BWC Investment Division.

Finally, the board approved a new investment strategy for the Disabled Workers’ Relief Fund, a supplemental fund established to provide relief to an injured worker who is receiving permanent and total disability (PTD) compensation benefits adjusted to cost of living increases. It also accepted the recommendation of staff and BWC’s investment consultant, Mercer Investment Consulting, to set the asset allocation at 70 percent bonds and 30 percent equities.

The next BWC Board of Directors meeting will be held Friday, February 26, 2010 at 8 a.m. in Room 3, Level 2 of the William Green Building, located at 30 W. Spring St., Columbus.

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Ohio Bureau of Workers’ Compensation Board of Directors
Chairman William Lhota, SI Employers | Charles Bryan, Actuary | David Caldwell, Employee Organizations | Alison Falls, Investment & Securities | Thomas Pitts, Employees | Kenneth Haffey, CPA | James Harris, Employee Organizations | James Hummel, Large Employers | Jim Matesich, Small Employers | Larry Price, Public | Robert Smith, Investment & Securities