The Board of Directors for the Ohio Bureau of Workers’ Compensation announced a reduction in the workers’ compensation premium rates paid by private employers in Ohio. Beginning July 1 of this year, private employers will pay a total of $71 million less than they did in 2020, an overall 7.1% decrease in premiums. The move will affect more than 220,000 private employers statewide. The cut for private employers follows a corresponding 10% cut for public employers announced by the BWC back in January.
The BWC has cut rates every year since 2018, including a 13% cut in 2019 and a 20% cut in 2020, and has made a total of 12 cuts since 2008. Premium rates were already at 40-year lows back in 2020 before this latest announcement. The BWC has not raised rates since 2006. The announcement also comes after nearly $8 billion in rebates were paid by the BWC to employers in 2020, which totaled more than three-and-a-half times the amount employers were billed for premiums in the prior fiscal year.
Despite the massive rebates and historic rate cuts, the BWC states that the workers’ compensation fund remains well-positioned. Following the rebates last year, the BWC estimated the state fund’s net position was $6.8 billion. According to the BWC’s press release, the cuts are possible (and financially responsible) due to the continued downward trend in injury claims made against the fund and stable medical inflation costs. The BWC also cites prudent financial management, resulting in significant returns on investments made with the fund, including $902 million in returns between July 1 and September 30 of 2020.
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.