While noting that he wants Ohio’s group rating programs to continue, Pedrick reported that efforts were underway to ensure that the true economics were reflected properly in rates extended to participating businesses. In addition to changes in rates for the group programs, work groups are also studying other forms of performance-based discount programs that can be extended to all businesses.
Proponents of maintaining group rating programs’ maximum premium deduction state that only employers with minimal workers’ compensation claims can qualify for participation in group rating programs, thereby justifying the rate decrease. Pedrick reported that according to a study conducted for the Bureau by Deloitte, actual claims experience does not support rate decreases as high as 85%. Additionally, the Bureau is concerned that participating employers are not as homogeneous within industry and professional groups as originally envisioned.
Ohio Society of CPAs members have realized significant savings from participating in the Society-sponsored Ohio BWC group rating program. Although Pedrick noted that the timing and details are “a bit hazy,” what can participating employers expect if changes are approved? According to Pedrick, expect:
• Approximately 20% greater premiums than participants were used to paying
• An increase in live training opportunities that group rating program sponsors are required to offer members
• A requirement that group rating sponsors identify volunteer employer members that safety staff can visit to “audit” the effectiveness of the sponsor’s communication and education initiatives.
Not every employer qualifies to participate in group rating programs based upon claims experience. Other performance-based discount programs under consideration by the Bureau include:
• “High deductible plan” models where the employer absorbs the first portion of the risk, thereby reducing premiums paid for Workers’ Compensation.
• Retrospective rating programs, where members of an employer group participate in a greater portion of their own up-side and down-side risk.
• Safety dividend programs, in which a safety dividend is awarded if businesses exceed some performance measures as a result of a process implemented to reduce costs.