Workers’ Comp Premiums to Remain Stable in 2008

Encouraging economic trends, continued rebuilding efforts cited

Columbus, Ohio – Premium rates for Ohio employers paying workers’ compensation insurance will remain stable as a result of The Ohio Bureau of Workers’ Compensation’s (BWC’s) recommendation to not increase average premiums for the upcoming fiscal year. This zero percent average premium rate change was accepted and approved by the Workers’ Compensation Oversight Commission (WCOC) today.

The approved zero percent average rate change applies to private sector employers for fiscal year 2008, which starts on July 1, 2007. This represents the first time in five years that BWC did not recommend an average rate increase for private-sector employers.

“As BWC continues to rebuild, average premium rates for employers will not increase,” said Tina Kielmeyer, BWC’s Acting Administrator/CEO. “This recommendation was made possible because of several successful cost containment measures and greater partnership with Ohio employers to prevent injuries and invest in workplace safety.”

Mercer Oliver Wyman, BWC’s outside actuary, examines a myriad of economic and workers’ compensation trends before providing a premium range to the Administrator. Several factors influenced their recommendation, including the fact that claims have declined significantly over the past decade, including six percent between fiscal year 2005 to fiscal year 2006. Additionally, they noted medical expenses have decreased by $44 million through the first nine months of the current fiscal year.

“The operational improvements thus far have allowed BWC to keep rates stable for employers for the first time in five years,” said Kielmeyer. “Recommending a zero percent increase provides stability for employers while enabling BWC to appropriately and responsibly manage remaining challenges.”

While the zero percent average rate change means BWC does not need to collect additional premiums, employers will continue to be billed based primarily on their individual claims experience.

BWC collected approximately $2.1 billion in premium during fiscal year 2006. Currently, the agency incurs expenses of $0.75 for every dollar it earns. For more information on BWC’s financial health, please see Dollars and Sense.

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Media contact: Keary McCarthy, (614) 644-8944 or mccarthy.k.1@bwc.state.oh.us
Jeremy Jackson, (614) 644-7229