For Immediate Release: Dec. 21, 2007

BWC Board of Directors Holds Final Meeting of 2007

Agency Continues Commitment to Accountability, Fairness and Improved Service

COLUMBUS – The Ohio Bureau of Workers’ Compensation (BWC) Board of Directors held its final meeting of 2007 this week. Board actions included rule changes to the Marine Industry Fund and the Coal Workers Pneumoconiosis Fund, as well as approvals to issue a Request for Proposals (RFP) for investment management services.

With the board’s guidance, BWC has made significant progress toward building a system that is fair, reliable and equitable for Ohio employers and injured workers throughout 2007.

A year in review
Shortly after taking office, Governor Ted Strickland made reformation of BWC’s governance and oversight structure a priority in his fiscal years 2008 and 2009 biennium budget bill (HB 100). That reformation included the creation of the position of deputy inspector general, specifically appointed within the BWC and the Industrial Commission of Ohio (IC). Deputy Inspector General Joe Montgomery began his duties on Sept. 17. His role includes the investigation of wrongful acts or omissions committed by BWC and IC officers and employees.

House Bill 100 also called for the creation of an independent board of directors, including business and labor representatives, financial experts and four non-voting legislative members. Strickland said, “We must rebuild trust and accountability in the BWC ... to be successful, we must ensure integrity, professionalism and efficiency in the BWC system.”

To lead this effort, Strickland announced the appointment of Marsha P. Ryan as administrator of BWC, citing her professionalism and years of public and private sector experience as strengths in carrying out the bureau’s important obligations “efficiently and effectively.” Ryan officially began her duties as administrator on May 1, 2007.

“The strength of Ohio’s economy is rooted in the success of our business community and the well-being of its work force,” said Administrator Ryan. “By providing a stable, fair and equitable workers’ compensation system, we can ensure that employers will have an unwavering confidence in their premium investment, and injured workers will receive quality care and compensation that will allow them to maintain their quality of life.”

As directed in HB 100, 11 non-legislative members of the BWC Board of Directors were appointed to represent the interests of Ohio workers, employers and the public at large. The board also includes members with professional expertise in financial accounting, investments and securities and actuarial management. The newly-formed board held its first meeting on Aug. 23, 2007. One month later, it approved a zero-percent change in average premium rates for public employers. Also in that Sept. 27 meeting, the BWC Board of Directors agreed to Administrator Ryan’s recommendation to reduce the group-rating discount from 90 percent to no less than 80 percent for the upcoming program year.

“Ohio’s group-rating program has lacked actuarial soundness since its inception,” said Administrator Ryan. “The program was designed to allow like businesses to pool their experience and pay lower workers’ compensation premiums. Because the 90-percent discount is so deep, and Ohio’s workers’ compensation system is revenue neutral, we see non group-rated employers shouldering the additional $200 million needed to subsidize the current 90-percent group discount.”

At a November public forum, more than 60 employers and employer representatives presented their positions on lowering the group discount. The BWC Board of Directors then requested further study on the issue, asking staff to present a plan by June 30, 2008, that addresses rules related to the composition and continuity of groups. Pending further study, at its Nov. 21 meeting, the BWC Board of Directors made a significant decision to lower the group-rating discount from 90 percent to 85 percent, effective July 1, 2008. The reduction is expected to save non group-rated employers approximately $50 million and reduce Ohio’s premium base rate by approximately 2.5 percent.

“Reducing the group discount to 85 percent is a positive first step toward improving the group-rating program and to ensure that all Ohio employers are paying their fair share for workers’ compensation coverage,” said Administrator Ryan.

HB 100 also requires BWC to more accurately calculate reserves for Ohio employers. Lawmakers approved funding that will allow BWC to invest in a new claims reserving system. This new system will be an advanced and transparent reserving system that will more accurately estimate claim reserves that impact employer premiums.

The new BWC focuses on providing outstanding customer service to Ohio’s injured workers and Ohio employers. On Dec. 7, BWC delivered a newly restructured contract to 25 managed care organizations (MCOs). The new contract significantly increases performance requirements of the MCOs and enhances service to injured workers.

Additionally, the agency is working to streamline operations and reduce administrative costs. BWC recently announced it will merge its Cincinnati Customer Service Office with its Governor’s Hill (Hamilton County) Customer Service Office; and the Bridgeport Customer Focus Center with the Cambridge Customer Service Office, effective Dec. 28. The resulting cost savings for these consolidations will be more than $1.48 million over the remainder of the biennium budget cycle (fiscal years 2008 and 2009).

BWC helps employers and employees cope with workplace injuries by providing medical and compensation benefits for work-related injuries, diseases and deaths, providing insurance to about two-thirds of Ohio's work force. In calendar year 2007, BWC provided workers’ compensation coverage to more than 271,200 employers, processed more than 196,000 new claims and paid more than $1.2 billion in benefits to Ohio’s injured workers.

Contact: Keary McCarthy
mccarthy.keary@bwc.state.oh.us

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