The Bureau of Workers’ Compensation has announced its approval of Governor Mike DeWine’s proposal to send out $5 billion in dividends to Ohio employers. The dividend payment is intended to further ease the impact of the pandemic on Ohio employers. This dividend equals nearly four times the total premiums paid in policy year 2019 and is the largest rebate in Ohio history. This latest payment follows $1.3 billion in dividends sent out in late October and $1.5 billion in late April. All told, the BWC has paid out nearly $8 billion in rebates in the past year.
Employers eligible to receive the dividends are state insurance fund employers, which include private employers or public employer taxing districts only. The BWC notes that the dividends will be applied to an employer’s outstanding balances first, including any recent installment deferrals. Employers will need to have completed their “true-up” by October 2, 2020 to receive the dividend. The BWC states that it is refunding 372% of private employer billed premiums for the policy period of July 1, 2019 through June 30, 2020, and 372% of public employer billed premiums for the policy period of January 1, 2019 through December 31, 2019.
According to the BWC, the dividends are possible for two reasons. First, the bureau states they have received strong returns on investment of employer premiums. Specifically, the bureau earned approximately $902 million on investments between July 1 and September 30. Second, the BWC is continuing to see a decline in the number of claims allowed each year. Bureau statistics show a consistent decline in claims paid year-over-year, which continues a downward trend that has been observed since 2010. Despite the dividends paid over the last two years, the BWC notes that the state insurance fund’s net position after the payment will be approximately $6.3 billion, which the bureau states is “very substantial and will support injured workers well into the future.” The BWC anticipates checks will be issued in mid-December. The BWC cautions that the dividends will have tax implications for private employers and advises each employer receiving a dividend to reach out to a tax professional for assistance.
The attorneys at Fishel Downey Albrecht & Riepenhoff, LLP regularly assist employers with workers’ compensation matters. If you have any questions about this or any other matter, please contact us at info@fisheldowney.com or call 614.221.1216.