Policy

·        When an employer wholly or partially succeeds another employer in the operation of a business, BWC will transfer the appropriate experience of the Predecessor employer to the Successor employer for calculation of the Successor employer’s rate(s).  For all successions taking place on or after September 1, 2006, in situations where an employer wholly succeeds another employer: the Predecessor employer’s financial rights, obligations, and experience under Ohio Workers’ Compensation Law will betransferred to the Successor employer by BWC.  The Predecessor employer is responsible for reporting payroll under its policy up to the effective date of the succession and the Successor employer is responsible for reporting payroll under its new or existing policy from the date of succession forward.  However, the Successor employer is ultimately held responsible for any unpaid billing or premium obligations posted on the Predecessor employer’s policy. 

 

Multiple criteria and the preponderance of the facts are used by BWC in the determination of whether or not a Successor employer “wholly succeeds” a Predecessor employer.  Criteria such as, but not limited to, the following are examined:

 

·        Business ownership

·        Continuity of business operations

·        Real Estate, plant and equipment, material inventories, and other real property

·        Customer profiles

·        Industrial pursuit

·        Employee roster

 

The criteria listed above may be found through examination of records to include, but not limited to, the following:

 

·        Purchase or sales agreements

·        Federal Tax and OBES records (to include W-2’s and 1099’s)

·        Receipts, invoices or transfer documents relating to real estate, equipment, vehicles, material inventory and other real property

·        List of customers and supporting invoices    

·        Account receivable ledgers

·        Payroll records

 

 

In situations where the Successor employer wholly succeeds the Predecessor employer:

 

·        The Predecessor employer’s policy will be combined into the Successor employer’s policy effective the date of the succession where the Successor employer has workers’ compensation coverage prior to the date of succession.  For employers not having workers’ compensation coverage prior to the date of succession the Predecessor employer’s policy will be combined into the Successor employer’s policy effective the date of the succession or the effective date of the Successor employer’s new policy.

 

·        For Successor employer’s not having workers’ compensation coverage prior to the date of succession, BWC will grant continuous coverage under certain circumstances which are as follows:

o   Successor employer submits Application for Ohio Workers’ Compensation Coverage (U-3) and appropriate minimum security deposit prior to the next payroll reporting period due date after the date of succession or 30 days from the date of succession whichever is greater.

o   Predecessor policy has active coverage on the date of succession.

 

·        The Predecessor employer’s rights and obligations under Ohio Workers’ Compensation Law are transferred to the Successor employer.

 

·        The payroll and claims experience of the Predecessor employer are transferred to the Successor employer.  When the Successor employer has existing BWC coverage, experience transfers become effective on the beginning date of the next payroll period.  When the Successor employer does not have existing BWC coverage or the date of succession is January 1 or July 1, the experience transfer takes place on the date of succession.

 

·        The Successor employer receives any and all rights and liabilities of the Predecessor employer, including but not limited to the Predecessor employer’s advance Premium Security Deposit (PSD).

 

·        The Successor employer is required to preserve the Predecessor employer’s payroll records for the five years preceding the date of succession.

 

·        Successions involving a bankrupt employer are forwarded to BWC Legal Department for advice.

 

·        Request for retention of its policy number by a Predecessor Employer will be denied.  Predecessor employer must complete an Application for Ohio Workers’ Compensation Coverage (U-3) to apply for coverage for its new/future business operation.

 

 

OAC 4123-17-02 Requires the Successor employer to notify the bureau of the succession.

 

Pursuant to this rule, the bureau shall provide to the parties the necessary forms and instructions to notify the bureau of the succession (Notification of Business Acquisition/Merger or Purchase/Sale (U-118)).  The certification section of the form requests a signature from the Predecessor and Successor employer.  However, the bureau has the right to proceed with processing a transaction to transfer the Predecessor’s experience and the liabilities when the Successor wholly succeeds another employer in the operation of a business without either party’s signature or approval.  The bureau shall review the completed forms and if any questions arise, the bureau may conduct a premium audit on each employer’s policy.

 

The effective date entered into BWC’s policy management system may be the effective date of succession plus 1 day to ensure the Predecessor employer has coverage through the date the Predecessor employer last had employees.

 

This policy does not address the impacts of other alternative rating programs in which an employer may be participating (The rules for the specific alternative rating plans apply; e.g., group, retrospective rating, DFWP or PDP).