This website publishes administrative rules on their effective dates, as designated by the adopting state agencies, colleges, and
universities.
| Rule |
Rule 4123-17-01 | Annual rate revision, method of adoption, effective date, publication.
(A) Private employers. (1) The annual revision
of premium rates as provided in division (B) of section 4123.34 of the Revised
Code applies to all renewals, reinstatements, and new coverage effective on or
after July first of each year, unless otherwise specifically provided. The
bureau of workers' compensation may adopt such changes in classification
of occupations or industries with respect to their degree of hazard as will
best serve to determine the risks of the different classes of occupations and
will enable the establishing of appropriate premium rates measured by the
hazard involved. (2) The revised premium
rates and changes in classification of occupations or industries with respect
to their degree of hazard, as provided in paragraph (A)(1) of this rule, will
be adopted by rules recommended by the administrator of workers'
compensation and with the advice and consent of the bureau of workers'
compensation board of directors as provided under division (F) of section
4121.12 of the Revised Code. (3) The rule, with any
revised premium rates and changes in classification of occupations or
industries attached thereto, will be filed in accordance with section 111.15 of
the Revised Code. Any revised premium rates and changes in classification of
occupations or industries become effective on the date indicated on the filed
rule. (B) Public employers, taxing
districts. (1) The annual revision
of premium rates for the taxing districts, as provided in section 4123.39 of
the Revised Code, applies to all renewals, reinstatements, and new coverage
effective on or after January first of each year, unless otherwise specifically
provided. The bureau may adopt such changes in classification of occupations or
industries with respect to their degree of hazard, as will best serve to
determine the risks of the different classes of occupations and will enable the
establishing of appropriate premium rates measured by the hazard
involved. (2) The revised premium
rates and changes in classification of occupations or industries with respect
to their degree of hazard as provided in paragraph (B)(1) of this rule, will be
adopted by rules recommended by the administrator and with the advice and
consent of the bureau's board of directors as provided under division (F)
of section 4121.12 of the Revised Code. (3) The rule with any
revised premium rates and changes in classification of occupations or
industries attached thereto, will be filed in accordance with section 111.15 of
the Revised Code. Any revised premium rates and changes in classification of
occupations or industries become effective on the date indicated on the filed
rule. (C) Public employers, state of Ohio, its
agencies and instrumentalities. (1) The annual revision
of contribution rates for the state of Ohio, its agencies and
instrumentalities, as provided in section 4123.40 of the Revised Code, for all
state agencies is effective July first of each year. (2) The revised
contribution rates as provided in paragraph (C)(1) of this rule will be adopted
by rules recommended by the administrator and with the advice and consent of
the bureau's board of directors as provided under division (F) of section
4121.12 of the Revised Code. (3) The rule with the
revised contribution rates will be filed in accordance with section 111.15 of
the Revised Code. The revised rates become effective on the date indicated on
the filed rule.
Last updated July 27, 2023 at 9:07 AM
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Rule 4123-17-02 | Successorship.
(A) Responsibilities. (1) Whenever one employer
succeeds another employer in the operation of a business in whole or in part,
the successor shall notify the bureau of workers' compensation of the
succession. (2) Pursuant to this
rule, the bureau will provide to the parties to the transfer of experience the
necessary forms and instructions to complete the transfer of the appropriate
payrolls and claims. The bureau will review the transfer and if any questions
arise, the bureau may conduct a premium audit on each party's
account. (3) The successor must
preserve the predecessor's payroll records for the five years preceding
the date of succession. (B) Experience. (1) Where one legal
entity, not having coverage in the most recent experience period, wholly
succeeds another legal entity in the operation of a business, the
successor's rate will be based on the predecessor's experience within
the most recent experience period. (2) Where a legal entity
having an established coverage or having had experience in the most recent
experience period wholly succeeds one or more legal entities having established
coverage or having had experience in the most recent experience period, the
experience of all the involved entities will be combined to establish the rate
of the successor. (3) Where a legal entity
succeeds in the operation of a portion of a business of one or more legal
entities having an established coverage or having had experience in the most
recent experience period, the successor's rate will be based on the
predecessor's experience within the most recent experience period,
pertaining to the portion of the business acquired by the
successor. (4) When any combination
or transfer of experience is indicated under any of the provisions of this
rule, the effective date of such combination or transfer to the beginning date
of the following policy year. In cases where an entity institutes workers'
compensation coverage on the same date it wholly succeeds another entity or in
cases where the date of succession is determined to be the first date of the
policy year, the experience of the predecessor will be transferred to the
successor effective as of the actual date of succession. (5) For an out of state
employer purchasing an existing Ohio operation, the bureau may use the out of
state experience of the employer as a factor in determining the employer's
experience. (6) In addition to
paragraphs (B)(1) to (B)(5) of this rule, and regardless of whether the
predecessor's transfer to the successor was voluntary or through an
intermediary bank or receivership, the bureau will transfer the
predecessor's experience under the workers' compensation law to the
successor if any of the following criteria are met: (a) The successor expressly or impliedly agrees to assume such
obligations; (b) The succession transaction amounts to a de facto
consolidation or merger; (c) The successor is merely a continuation of the predecessor;
or (d) The succession transaction is entered into for the purpose of
escaping obligations under the workers' compensation law. (7) If all of the
following conditions are met, the bureau will not transfer the experience from
the predecessor to the successor: (a) There is a material change in ownership; (b) There is a change in governing classification;
and (c) There is a change in process and hazard. (8) In addition to
paragraph (B)(7) of this rule, the bureau will not transfer the experience from
the predecessor to the successor if both of the following are met: (a) The time between the predecessor ceasing all operations and
the effective date of purchase is greater than six months; and (b) There is no family relationship or other connection between
the predecessor and the successor. (9) The bureau will
consider, but is not bound by, language in a purchase agreement between parties
regarding non-assumed liabilities when determining experience
transfers. (C) Rights and obligations. (1) Where one employer
wholly succeeds another in the operation of a business, the bureau will
transfer the predecessor's rights and obligations under the workers'
compensation law to the successor. (2) In addition to
paragraph (C)(1) of this rule and regardless of whether the predecessor's
transfer to the successor was voluntary or through an intermediary bank or
receivership, the bureau will transfer the predecessor's rights and
obligations under the workers' compensation law to the successor if any of
the following criteria are met: (a) The successor expressly or impliedly agrees to assume such
obligations; (b) The succession transaction amounts to a de facto
consolidation or merger; (c) The successor is merely a continuation of the predecessor;
or (d) The succession transaction is entered into for the purpose of
escaping obligations under the workers' compensation law. (3) If all the following
conditions are met, the bureau will not transfer the predecessor's rights
and obligations to the successor: (a) There is a material change in ownership; (b) There is a change in governing classification;
and (c) There is a change in process and hazard. (4) In addition to
paragraph (C)(3) of this rule, the bureau will not transfer the
predecessor's rights and obligations to the successor if both of the
following are met: (a) The time between the predecessor ceasing all operations and
the effective date of purchase is greater than six months; and (b) There is no family relationship or other connection between
the predecessor and the successor. (5) The bureau will
consider, but is not bound by, language in a purchase agreement between parties
regarding non-assumed liabilities when determining rights and obligations
transfers. (6) The successor will be credited with
any credits of the predecessor available at the time the bureau completes the
transfer. This paragraph applies where an employer wholly succeeds another
employer in the operation of a business on or after September 1,
2006. (D) No retroactive coverage may be granted except as
provided in rule 4123-14-03 of the Administrative Code.
Last updated July 27, 2023 at 9:07 AM
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Rule 4123-17-03 | Employer's experience rating plan.
(A) Definitions. As used in this rule: (1) "Experience period" means: (a) For private employer policy years commencing on or after July 1, 2016, the oldest four of the latest five completed policy years immediately preceding the beginning of the policy year to which a rate is applicable. (b) For public employer taxing districts policy years commencing on or after January 1, 2016, the oldest four of the last five completed calendar years immediately preceding the beginning of the policy year to which the rate is applicable. (2) "Inactive employer" means an employer that satisfies all the following criteria: (a) The employer is assigned a "cancelled" policy status or a "no coverage" policy, and (b) As of the last day of September for private employers, or the last day of March for public employers, the employer is not paying premiums or assessments to the Ohio state insurance fund under either its own identity, the identity of any successor entity, or as a self-insured entity. (3) "Significant negative impact" occurs when: (a) An inactive employer reported ten per cent or more of the payroll in a manual classification during the experience period, and (b) The base rate for the manual classification is higher by including the payroll, losses, and costs of such inactive employer in the calculation of that manual classification base rate, than the manual classification base rate is when the payroll, losses, and costs of the inactive employer are excluded. For the purpose of determining "significant negative impact," the bureau of workers' compensation shall test each inactive employer separately. (B) An employer's premium rates shall be the manual classification base rates as provided under rules 4123-17-02, 4123-17-06, and 4123-17-34 of the Administrative Code for each of the employer's manual classifications except as modified by the employer's experience rating, and shall apply for the twelve-month period beginning on the first of July for private employers and for the calendar year beginning on the first of January for public employer taxing districts. (1) In calculating the manual classification base rate and the expected loss rate under this rule, the bureau shall exclude the experience in a manual classification of an inactive employer if the inclusion of that inactive employer's experience in that manual classification would have a significant negative impact upon the remaining employers in a particular manual classification. (2) The calculation of the manual classification base rate and the expected loss rate, as modified in paragraph (B)(1) of this rule, shall be applied to all employers reporting payroll in the manual classification. (C) An experience-rated employer's manual classification experience-modified rate shall be determined by multiplying its experience modification (EM) as defined in paragraph (D) of this rule times the manual classification base rate for each of the employer's assigned manual classifications. (D) An employer's EM is determined in accordance with the following formula: .jpg) TML = Actual losses of the employer for the experience period, limited in accordance with paragraph (E)(1) of this rule. TLL = Total limited losses = TEL multiplied by LLR TEL = Total expected losses, determined by applying expected loss rate to the payroll of each manual classification in the employer's experience period, as provided in the appendix to rule 4123-17-05.1 of the Administrative Code for private employers and in the appendix to rule 4123-17-33.1 of the Administrative Code for public employer taxing districts. The total expected losses are then used to determine credibility group, credibility, and the maximum value of a loss. LLR = Limited loss ratio, calculated for each credibility group within each industry group, as provided in appendix B to rule 4123-17-05 of the Administrative Code for private employers and appendix B to rule 4123-17-33 of the Administrative Code for public employer taxing districts. C = Credibility given to an employer's own experience, determined by the employer's total expected losses, as provided in the appendix to rule 4123-17-05.1 of the Administrative Code for private employers and in the appendix to rule 4123-17-33.1 of the Administrative Code for public employer taxing districts. (E) For a private employer that is not an alternate employer organization as defined in section 4133.01 of the Revised Code or a professional employer organization as defined in section 4125.01 of the Revised Code, and who is individually experience rated, individually retrospective rated, group retrospective rated, or in a deductible program under rule 4123-17-72 of the Administrative Code, the employer's EM as calculated in paragraph (D) of this rule is further adjusted by multiplying the EM adjustment factor as provided in appendix A to this rule and the employer's EM. (F) For a public employer taxing district employer that is not an alternate employer organization as defined in section 4133.01 of the Revised Code or a professional employer organization as defined in section 4125.01 of the Revised Code, and who is individually experience rated, individually retrospective rated, group retrospective rated, or in a deductible program under rule 4123-17-72 of the Administrative Code, the employer's EM as calculated in paragraph (D) of this rule is further adjusted by multiplying the EM adjustment factor as provided in appendix B to this rule and the employer's EM. (G) An employers' EM shall be subject to the following conditions and limitations: (1) Actual losses shall include all incurred costs but shall be limited as provided in rule 4123-17-12 of the Administrative Code, and at the claim level to the amounts provided in the appendix to rule 4123-17-05.1 of the Administrative Code for private employers and the appendix to rule 4123-17-33.1 of the Administrative Code for public employer taxing districts according to the total expected losses of an employer; and (2) An employer shall not be eligible for experience modification of manual classification base rates unless its expected losses are at least the minimum amount as provided in the appendix to rule 4123-17-05.1 of the Administrative Code for private employers and the appendix to rule 4123-17-33.1 of the Administrative Code for public employer taxing districts. (3) The year-over-year increase in an employer's EM may be limited pursuant to rule 4123-17-03.2 of the Administrative Code. (4) Actual losses where COVID-19 was contracted by an employee arising during the period between the emergency declared by executive order 2020-01D, issued March 9, 2020 and July 2, 2021 which is fourteen days after the Executive Order was repealed, shall be excluded from employer's experience for the purpose of experience rating calculations. (5) Actual losses occurring on or after March 23, 2022 where a student is a participant of the work-based learning program shall be excluded from an employer's experience for the purpose of experience rating calculations if both of the following conditions apply: (a) The employer provides work-based learning experiences for students enrolled in a career-technical education program approved under section 3317.161 of the Revised Code; and (b) The claim is based on a student's injury, occupational disease, or death sustained in the course of and arising out of the student's participation in the employer's work-based learning experience.
Last updated July 15, 2024 at 9:14 AM
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Rule 4123-17-03.2 | Experience modification cap.
(A) Definitions. As used in this rule: (1) "Experience
modification" or "EM" means the experience modification as
determined under rule 4123-17-03 of the Administrative Code. (2) "Eligibility determination
date" means the March first immediately preceding the policy year for
which the EM is being calculated for private employers, and the September first
immediately preceding the policy year for which the EM is being calculated for
public employer taxing districts. (B) Except as provided for in paragraph
(D) of this rule, the bureau of workers' compensation shall limit the
increase in EM of an employer meeting the eligibility requirements of this rule
to twenty-five per cent of the initial EM calculated for that employer in the
preceding rating year if the employer is either individually experience rated
or base rated in both the current and preceding rating years for any policy
years for private employers beginning July 1, 2023 and ending June 30, 2027 or
for any policy years for public employer taxing districts beginning January 1,
2023 and ending December 31, 2027. (C) Eligibility
requirements. As of the eligibility determination date: (1) The employer must be
current with respect to all payments due the bureau, as defined in paragraph
(A)(1)(b) of rule 4123-17-14 of the Administrative Code; (2) The employer must not
have cumulative lapses in workers' compensation coverage in excess of
forty days within the preceding twelve months; and (3) The employer must
report actual payroll for the preceding policy year and pay any premium due
upon reconciliation of estimated premium and actual premium for that policy
year no later than the eligibility determination date. (D) An employer removed from the EM cap
program for failure to meet the criteria set forth in paragraph (C)(3) of this
rule will be rerated for the full policy year at the employer's base rate
or experience-modified rate as determined by the employer's expected
losses for the policy year. (E) Application of cap to successor policies. (1) Where a transfer of
experience occurs pursuant to rule 4123-17-02 of the Administrative Code, the
resulting EM is not subject to limitation under this rule unless one of the
following apply: (a) The transfer is a combination as a result of bankruptcy
proceedings, when the transaction is a change in policy number without any
change in exposure; or (b) A base-rated successor wholly or partially succeeds a single
policy. (2) If the criteria in
paragraph (E)(1)(a) or (E)(1)(b) of this rule are met, the predecessor's
published EM in the preceding rating year will be the EM published for the
successor in the same rating year for purposes of determining whether the cap
applies under this rule.
Last updated July 2, 2024 at 11:24 AM
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Rule 4123-17-03.3 | Employer premium size factors.
(A) The administrator of workers'
compensation, with the advice and consent of the bureau of workers'
compensation board of directors, hereby sets the premium size factors in the
appendix to this rule to be effective July 1, 2024. (B) A private employer is eligible for
the premium adjustment under this rule provided the private employer is not a
professional employer organization as defined in section 4125.01 of the Revised
Code, and the private employer is individually experience rated, individually
retrospective rated, group retrospective rated, or participating in a
deductible program under rule 4123-17-72 of the Administrative
Code. (C) The premium size factors in the
appendix to this rule will be applied using the following formula to determine
an employer's initial premium: Initial premium equals payroll multiplied by base
rate multiplied by EM multiplied by EM adjustment factor where: Payroll equals the amount of payroll reported by
the employer as required under agency 4123 of the Administrative Code; Base rate equals the rate that an employer who is
not experience rated pays as a percentage of their payroll; EM equals experience modification as defined in
rule 4123-17-03 of the Administrative Code; and EM adjustment factor equals experience
modification adjustment factor as defined in rule 4123-17-03 of the
Administrative Code. (D) The following limitations apply to
the initial premium calculated in paragraph (C) of this rule: (1) For an employer that
is individually experience rated, group retrospectively rated, or participating
in a deductible program under rule 4123-17-72 of the Administrative Code, the
initial premium is adjusted by the following formula: Premium equals initial premium multiplied by
premium size factor where: Initial premium equals initial premium as
calculated in paragraph (C) of this rule; and Premium size factor equals the appropriate
premium size factor obtained from the table in the appendix to this rule when
applying the initial premium as calculated in paragraph (C) of this rule to the
experience rated premium range. (2) For individual
retrospective rated employers, the premium size factors will only apply to the
minimum premium and not to any payments on annual evaluation billings made by
the employer. (3) For employers
participating in the deductible program, the premium size factors will only
apply to the post deductible credited premium and not to any deductible claim
cost reimbursement payments made by the employer.
Last updated September 25, 2024 at 10:08 AM
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Rule 4123-17-04 | Classification of occupations or industries.
The administrator of workers' compensation,
with the advice and consent of the bureau of workers' compensation board
of directors, has authority to approve the classification of occupations or
industries pursuant to sections 4121.12, 4121.121, and 4123.29 of the Revised
Code. The administrator hereby establishes the following classifications of
occupations or industries to be effective July 1, 2024, as indicated in the
appendix to this rule, the classification of occupations or industries that is
based upon the national council on compensation insurance as required by
division (A)(1) of section 4123.29 of the Revised Code.
View Appendix
Last updated July 2, 2024 at 11:25 AM
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Rule 4123-17-05 | Private employer industry group and limited loss ratio tables.
The administrator of workers' compensation,
with the advice and consent of the bureau of workers' compensation board
of directors, has authority to approve contributions made to the state
insurance fund by employers pursuant to sections 4121.121, 4123.29, and 4123.34
of the Revised Code. The administrator hereby sets the industry group
assignment and limited loss ratio tables parts A and B, to be effective July 1,
2024, applicable to the payroll reporting period July 1, 2024, through June 30,
2025, for private employers as indicated in appendices A and B to this
rule.
View AppendixView Appendix
Last updated July 2, 2024 at 11:25 AM
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Rule 4123-17-05.1 | Private employer credibility table.
The administrator of workers' compensation,
with the advice and consent of the bureau of workers' compensation board
of directors, has authority to approve contributions made to the state
insurance fund by employers pursuant to sections 4121.121, 4123.29, and 4123.34
of the Revised Code. The administrator hereby sets the experience rating table
part A, "credibility and maximum value of a loss," to be effective
July 1, 2019, applicable to the payroll reporting period July 1, 2019 through
June 30, 2020, for private employers as indicated in appendix A to this
rule.
View Appendix
Last updated June 7, 2024 at 1:39 PM
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Rule 4123-17-06 | Private employer contributions to the state insurance fund.
Effective:
September 9, 2024
The administrator of workers' compensation,
with the advice and consent of the bureau of workers' compensation board
of directors, has authority to approve contributions made to the state
insurance fund by employers pursuant to sections 4121.121, 4123.29, and 4123.34
of the Revised Code. The administrator hereby sets the private employer class
code base rates, and private employer class code expected loss rates per one
hundred dollar unit of payroll to be effective July 1, 2024, applicable to the
payroll reporting period July 1, 2024, through June 30, 2025, for private
employers as indicated in appendices A and B to this rule.
View AppendixView Appendix
Last updated September 9, 2024 at 8:51 AM
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Rule 4123-17-07 | Officers of corporations, elective coverage entities, and ministers.
(A) Definitions. As used in this rule: (1) "Church"
means an established and legally recognized church, congregation, denomination,
society, corporation, fellowship, convention, or association that is formed
primarily or exclusively for religious purposes. (2) "Elective
coverage persons" means a sole proprietor, a member of a partnership, a
member of a limited partnership, an individual incorporated as a corporation
with no employees, or an officer of a family farm corporation. (3) "Elective
coverage entity" means a sole proprietorship, a partnership, a limited
partnership, an individual incorporated as a corporation with no employees, or
a family farm corporation. (4) "Family farm
corporation" has the same meaning as defined in division (E) of section
4123.01 of the Revised Code. (5) "Minister"
means a duly ordained, commissioned, accredited, or licensed minister, member
of the clergy, rabbi, priest, or Christian science practitioner. (B) Officers of
corporations. (1) The actual
remuneration of an executive officer of a corporation, such as president, vice
president, secretary, treasurer, and any other executive officer enumerated in
and empowered by the corporate charter or any regularly adopted bylaws of the
corporation and elected or appointed and empowered by the directors to perform
duties for the corporation, shall be included in the payroll report of the
corporation pursuant to rule 4123-17-14 of the Administrative Code, subject to
the weekly minimum and maximum provided in rule 4123-17-30 of the
Administrative Code. Such remuneration is to be assigned to the classification
code applicable to the duties performed. (2) Paragraph (B)(1) of
this rule does not apply to family farm corporations. The remuneration of the
officers of such corporation will not be reported as part of the payroll of
such employer, unless such employer elects to include as an
"employee," within Chapter 4123. of the Revised Code, any officer of
the family farm corporation, in which case the procedure outlined in paragraph
(C) of this rule applies. (C) Elective coverage
entities. (1) Remuneration of an
elective coverage person shall not be reported as part of the payroll of an
elective coverage entity unless that entity elects to include any such person
as an employee. (2) Upon the filing of
notice pursuant to paragraph (E) of this rule, the actual remuneration of an
elective coverage person shall be reported and included in the payroll report
of the employer pursuant to rule 4123-17-14 of the Administrative Code, subject
to the weekly minimum and maximum provided in rule 4123-17-30 of the
Administrative Code. Such remuneration is to be assigned to the highest rated
classification code applicable to the duties performed. (D) Ministers. (1) Division (A)(2)(a) of
section 4123.01 of the Revised Code excludes from coverage ministers, assistant
ministers, or associate ministers in the exercise of their ministry. The
remuneration for such persons shall not be reported as part of the payroll of a
church employer, unless the church elects to include such persons as
employees. (2) Upon the filing of
notice pursuant to paragraph (E) of this rule, the actual remuneration of a
minister, assistant minister, or associate minister shall be reported and
included in the payroll report of the employer. Such remuneration is to be
assigned to the classification code applicable to the duties
performed. (E) An employer may elect to include an
elective coverage person or minister, assistant minister, or associate minister
as an employee under paragraph (C) or (D) of this rule by notifying the bureau
of workers' compensation on a form prescribed by the bureau. After proper
election notice, and payment of premium, elective coverage persons or
ministers, assistant ministers, or associate ministers will be entitled to
receive compensation and benefits as provided in Chapter 4123. of the Revised
Code. (1) Coverage for such
persons will not be effective until notice has been filed and the mandatory
payment made with the bureau. (2) Coverage will remain
in effect, and the employer will be responsible for the payment of estimated
premium thereon, until the bureau receives written notice from the employer
requesting termination of coverage for the elective coverage persons or
ministers, assistant ministers, or associate ministers. (3) An employer's
failure to pay estimated premiums timely will terminate or lapse coverage for
its elective coverage persons or ministers, assistant ministers, or associate
ministers in accordance with bureau policy. Reinstatement of coverage will also
be determined in accordance with bureau policy. No retroactive coverage may be
granted except as provided in rule 4123-14-03 of the Administrative
Code. (F) Household workers. Coverage that is extended to a person who, in his
or her household, employs household worker(s) pursuant to section 4123.01 of
the Revised Code, does not include such person himself.
Last updated July 27, 2023 at 9:07 AM
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Rule 4123-17-08 | Classifications according to national council on compensation insurance.
In accordance with division (A)(1) of section
4123.29 of the Revised Code, the purpose of this rule is for the bureau of
workers' compensation to conform the classifications of industries
according to the categories the national council on compensation insurance
(NCCI) establishes that are applicable to employers in Ohio. This rule is based
upon "Rule 1, Classification Assignment," effective January 1, 2002,
of the classification rules of the NCCI and "Rule 2G, Interchange of
Labor." The rule is used with the permission of the NCCI and is modified
to conform to the requirements of the Ohio administrative code and the bureau
of workers' compensation. Where the NCCI scopes of basic manual
classifications contains additional rules and information relating to the
reporting of payroll or classification of industries under the manual
classifications, such scopes and rules shall apply under the rules of the
bureau of workers' compensation, unless otherwise specifically
excepted. (A) Classification system. (1) The purpose of the
classification system is to group employers with similar operations into
classifications so that: (a) The assigned classification reflects the exposures common to
those employers. (b) The rate charged reflects the exposure to loss common to
those employers. (2) Subject to certain
exceptions, it is the business of the employer within a state that is
classified, not separate employments, occupations or operations within the
business. (B) Explanation of
classifications. Classifications are divided into two types -
basic classifications and standard exception classifications. (1) Basic
classifications. Basic classifications describe the business of
an employer. This term is applied to all classifications listed in this manual,
except for the standard exception classifications. Examples of classifications that describe the
business of the employer include: (a) Business: manufacture of a product = classification:
furniture manufacturing. (b) Business: a process = classification: engraving. (c) Business: construction or erection = classification:
carpentry. (d) Business: a mercantile business = classification: hardware
store. (e) Business: a service = classification: beauty
salon. (2) Standard exception
classifications. Standard exception classifications describe
occupations that are common to many businesses. These common occupations are
not included in a basic classification unless specified in the classification
working. The standard exception classifications are described as
follows: (a) Clerical office or drafting employees NOC (code 8810);
clerical office or drafting telecommuter employees (code 8871). The noted classifications are assigned when
all the following conditions are met: the basic classification(s) wording
applicable to the business does not include clerical office, drafting or
telecommuting employees; other rules do not prohibit the assignment of code
8810 or code 8871; and the employee meets the duties, site and other
requirements listed as follows: (i) Duties. Duties must be limited to one or more of
the following work activities: (a) Creation or
maintenance of employer records, correspondence, computer programs,
files. (b) Drafting. (c) Telephone duties,
including telephone sales. (d) Data entry or word
processing. (e) Copy or fax machine
operations, unless the insured is in the business of making copies or faxing
for the public. (f) General office work
similar in nature to those noted in this paragraph. (ii) Site. (a) Code 8810 - the noted
duties must take place in a work station that is separated from the operative
hazards of: (i) Factories. (ii) Stores; (iii) Shops; (iv) Construction
sites; (v) Warehouses; (vi) Yards; (vii) Any other work
areas such as: (A) Work or service
areas. (B) Areas where inventory
is located. (C) Areas where products
are displayed for sale. (D) Areas to which the
purchaser customarily brings the product from another area for
payment. (b) Work stations or
service areas as described in paragraph (B)(2)(a)(ii)(a) of this rule must be
physically separated by: (i) Floors. (ii) Walls. (iii) Partitions. (iv) Counters. (v) Other physical
barriers that protect the clerical employee from the operating hazards of a
business. (c) Code 8871 - the noted
duties must take place in a clerical work area located within the home of the
clerical employee. It must be separate and distinct from the location of the
employer. (iii) Other
requirements. (a) Employees who
otherwise meet the requirements for code 8810 or code 8871 will not be
disqualified from assignment to this classification if they perform certain
incidental duties directly related to that employee's duties in the
office. These duties include: (i) Depositing of funds
in a bank. (ii) Pickup or delivery
of mail. (iii) Purchase of office
supplies. (iv) Entering an area
exposed to the operative hazards of the business for clerical purposes, such as
delivering paychecks. (b) Employees who
otherwise meet the requirements for code 8810 or code 8871 will be disqualified
from assignment to this classification if their duties involve: (i) Outside sales or
outside representatives. (ii) Direct supervision
of nonclerical employees not performed in an eligible site according to
paragraph (B)(2)(a)(ii)(a) of this rule. (iii) Physical
labor. (iv) Any work exposed to
the operative hazards of the business, such as a stock or tally clerk, that is
necessary, incidental, or related to any operations of the business other than
a clerical office. (b) Drivers, chauffeurs and their helpers NOC - commercial (code
7380). This classification is assigned to employees
who perform work on or in connection with a vehicle. This code includes garage
employees and employees using bicycles as part of their work duties. Duties
include, but are not limited to, delivering goods owned by the employer. Code 7380 does not apply when the basic
classification wording includes drivers. (c) Salespersons, collectors or messengers - outside (code
8742). This classification is assigned to employees
who perform these duties away from the employer's premises. This code excludes employees who: (i) Deliver
merchandise. (ii) Use vehicles to
deliver or pick up goods, even if they collect or sell. These employees must be
assigned to the classification applicable to the business for
drivers. (iii) Use public
transportation or walk to deliver goods, even if they collect or sell. These
employees must be assigned to the governing classification applicable to the
business. Code 8742 does not apply when the basic
classification wording includes outside salespersons, collectors or
messengers. (d) Automotive salespersons (code 8748). This classification is assigned to employees
who perform these duties on or away from the employer's premises. These
employees are subject to the same rules and treatment as salespersons,
collectors, or messengers - outside. (3) General
inclusions. Some operations appear to be separate
businesses but are included within all basic classifications. These are called
general inclusions. These operations are not separately classified. They
include the following: (a) Restaurants or cafeterias operated by the insured for
employee use. Exception: if these operations are conducted in connection with
construction, erection, lumbering or mining operations, they must be separately
classified. (b) Manufacture of containers by the insured, such as bags,
barrels, bottles, boxes, cans, cartons or packing cases for sole use in the
operations insured by the policy. (c) Hospitals or medical facilities operated by the insured for
its employees. (d) Maintenance or repair of the insured's buildings or
equipment by the insured's employees. (e) Printing or lithographing by the insured on its own
products. Some employees may perform general inclusion
duties for more than one basic classification. In such cases, refer to
paragraph (F) of this rule for classification treatment. Exceptions: A general inclusion operation must be
separately classified if: (i) The operation is
conducted as a separate and distinct business of the insured (refer to
paragraph (D)(3) of this rule.) (ii) The operation is
specifically excluded in the wording of the basic classification. (iii) The principal
business is described by a standard exception classification. (4) General
exclusions. Some operations in a business are so unusual
for the type of business described by the applicable basic classification, that
they are separately classified even though the operations are not conducted as
a secondary business. These are called general exclusions. They are: (a) Aircraft operations - all operations of the flying and ground
crews. (b) New construction or alterations. (c) Stevedoring. (d) Sawmill operations. (e) Employer-operated day care service. (5) Governing
classification. The governing classification at a specific job
or location is the classification, other than a standard exception
classification, that produces the greatest amount of payroll. If a basic classification is not applicable,
the governing classification is the standard exception classification that
produces the greatest amount of payroll. The governing classification is used to
determine the classification treatment of: (a) Miscellaneous employees. (b) Local managers. (c) Executive officers who regularly engage in duties that are
ordinarily performed by a superintendent, foreperson or worker. Example of a governing classification: a
business has the following payroll amounts assigned to the following
classifications: $220,000 for code 2003 (bakery); $120,000 for code 8017
(store; retail); and $240,000 for code 8810 (clerical). The governing code for this business is code
2003 because it is the classification code, other than the standard exception
code (code 8810), with the greatest amount of payroll. (6) Principal
business. Principal business is described by the
classification, other than a standard exception or general exclusion, with the
greatest amount of payroll. If the business is best described by a standard
exception operation, and there is no basic classification other than the
general inclusion or exclusion operations, then the standard exception
operation that produces the greatest amount of payroll for the business is
considered the principal business. (C) Classification wording. The following list provides an explanation of
classification wording usage. (1) Classification
captions and notes. The "caption" is the heading that
precedes the classification itself and is part of the classification
wording. The "note" is the phrase that follows
the classification and is part of the classification wording. The classification wording, including captions
and notes, controls, restricts or explains the classification usage. Example of a classification entry: Store: fruit or vegetable - retail. No handling
of fresh meats; "store" is the caption in the example and "no
handling of fresh meats" is the note. (2) Words and
phrases. (a) All employees, all other employees, all operations, or all
operations to completion. If a classification includes any of these
phrases, no other classification can be assigned unless noted in the
classification wording. This applies even if some operations or employees are
at a separate location. Examples of classifications that include
"all employees," "all other employees," all
operations," or "all operations to completion": (i) Code 9186 (carnival,
circus or amusement device operator - traveling - all employees & drivers);
all employees must be assigned to this classification. (ii) Code 7382 (bus co.:
all other employees & drivers); all employees, other than garage employees,
must be assigned to code 7382, not 8385; (iii) Code 5402
(greenhouse erection-all operations); all work for the erection of a greenhouse
must be assigned to this classification. (iv) Code 6005 (jetty or
breakwater construction-all operations to completion & drivers); all work
for the construction of a jetty from the beginning to the end of the project
must be assigned to this classification. Exceptions: The following operations within the
business must be classified separately even if the classification wording
includes "all employees," "all other employees," "all
operations," or "all operations to completion": (a) Construction or
erection permanent yard (code 8227). (b) Contractor -
executive supervisor or construction superintendent (code 5606). (c) Classifications
describing an operation that is a standard exception unless the basic
classification includes the standard exception operation. (d) Classifications
describing an operation that is a general exclusion. (e) Any separate and
distinct business (refer to paragraph (D)(3)(c) of this rule). (b) Clerical. Clerical means clerical office employees and
drafting employees as defined in paragraph (B)(2)(a) of this rule. Clerical includes clerical telecommuters as
defined in paragraph (B)(2)(a) of this rule. (c) Drivers. Drivers means drivers, chauffeurs, and their
helpers as defined in paragraph (B)(2)(b) of this rule. (d) "Includes" or "&." If the classification wording uses the terms
"includes" or "&," the operation or employees cited
after those terms must not be assigned to a separate classification. This
applies even though the operation or employees may be described by another
classification or are at a separate location. Examples of classification that include the
terms "includes" or "&": (i) Code 0005 (farm:
nursery employees & drivers); all drivers must be assigned to this
classification. (ii) Code 4829 (chemical
mfg. NOC - all operations & drivers - includes blending or mixing); all
drivers and all blending and mixing operations must be assigned to this
classification. (iii) Code 8832
(physician & clerical); all clerical employees must be included in this
classification. Note: if an insured's operations are
assigned to more than one basic classification, an employee's payroll may
be allocated among codes appropriate for each operation. This procedure is
provided under paragraph (F) of this rule, interchange of labor. (e) Local manager. Local manager is an employee, regardless of
title, who is in direct charge of the operative procedures in the yard of a
business. This employee is subject to the hazards of the business. Therefore,
the payroll of the local manager must be assigned to the governing
classification unless another basic classification assigned to the business
specifically includes this employee. (f) "No" or "Not." A classification that includes a restrictive
phrase beginning with "no" or "not" must not apply to any
risk that conducts any operation described in the restrictive phrase. Examples of classifications that include the
terms "no" or "not": (i) Code 2143 (fruit
juice mfg.-no bottling of carbonated liquids); this code cannot be assigned to
a business that manufactures fruit juice if it also bottles carbonated
liquids. (ii) Code 4611 (drug,
medicine or pharmaceutical preparation-no mfg. of ingredients); this code
cannot be assigned to a business preparing drugs, medicines, or pharmaceuticals
if the business also manufactures the ingredients. (iii) Code 8106 (steel
merchant-not applicable to junk dealers); this code cannot be assigned to a
steel merchant if that business also deals in junk. Exception: for mercantile, mining or
construction operations, this rule applies to each job or location. (g) "NOC." "NOC" means "not otherwise
classified." If the classification wording uses the term "NOC",
that classification applies only if no other classification more specifically
describes the insured's business. Examples of classification that include the
term "NOC": (i) Code 2688 (leather
goods mfg. NOC). (ii) Code 3022 (pipe or
tube mfg. NOC & drivers). (iii) Code 8017 (store:
retail NOC). None of the listed codes will be assigned
to a business if there is another code that more specifically and accurately
applies to that business. (h) "Or" or "And." The terms "or" or "and"
mean and/or. Examples of classifications that include the
term "or" or "and": (i) Code 2586 (cleaning
or dyeing); a business that does cleaning and/or dyeing is classified to this
code. (ii) Code 4720 (soap or
synthetic detergent mfg.); a business that manufactures soap and/or synthetic
detergents is classified to this code. (iii) Code 7600
(Telecommunications Co. - cable TV/satellite - all employees and drivers); a
business that installs overhead telephone and/or cable TV lines is classified
to this code. (i) Salespersons. Salespersons means salespersons, collectors,
and messengers as defined in paragraph (B)(2)(c) of this rule. (j) Stories in height. Certain classification wording refers to
"stories in height." A story is defined as fifteen feet in height. It
is measured from the lowest point above ground level to the highest point above
ground level. Some of these classifications are: (i) Code 5037 (painting:
metal structures - over two stories). (ii) Code 5059 (iron or
steel-erection-frame structures not over two stories). (k) To be separately rated. Certain classification wording contains the
phrase "to be separately rated." Operations or employees referenced
in those classifications must be separately classified. Examples of classifications that include the
term "to be separately rated": (i) Code 2111 (cannery
NOC can mfg. to be separately rated as code 3220); in a business that cans
foods, the manufacturing of the cans must separately classified to code
3220. (ii) Code 4131 (mirror
mfg.-mfg. of glass, frames, backs, or handles to be separately rated); in a
business that makes mirrors, the work of producing glass, or fabricating
frames, backs, or handles must be separately classified. (iii) Code 8107
(machinery dealer NOC-store or yard & drivers, operations away from
premises, other than demonstration or repair, to be separately rated); in a
business that is a machinery dealer, work other than demonstrating or repairing
the equipment that is not done at the insured's location must be
separately classified. Rules regarding the assignment of more than
one basic classification apply. Refer to paragraph (D)(3) of this rule. (D) Classification
procedures. The purpose of the classification procedure is to
assign the one basic classification that best describes the business of the
employer within a state. Subject to certain exceptions described in this rule,
each classification includes all the various types of labor found in a
business. It is the business that is classified, not the
individual employments, occupations or operations within the business. Certain exceptions apply as noted: (1) Separate legal
entities. Classification rules apply separately to each
legal entity operating in a state even if multiple entities are insured under a
single policy. (2) Businesses not
described by a classification. If no basic classification clearly describes
the business, the classification that most closely describes the business must
be assigned. All the rules pertaining to the assigned basic classification
apply to this operation. (3) Assignment of more
than one basic classification. More than one basic classification may be
assigned to an insured who meets conditions set forth in paragraphs (D)(3)(a)
to (D)(3)(c) of this rule. Operation means activities, enterprises, processes,
secondary businesses or undertakings. (a) The insured's principal business is described by a basic
classification that requires certain operations or employees to be separately
rated. (b) The insured conducts one or more of the following
operations: (i) Construction or
erection. (ii) Farming. (iii) Employee leasing,
labor contracting, temporary labor services. (iv) Mercantile
business. (c) The insured conducts more than one operation in a
state. (i) For purposes of this
rule, an insured is conducting more than one operation in a state if portions
of the insured's operations in that state are not encompassed by the
classification applicable to the insured's principal business. To qualify
for a separate classification, the insured's additional operation
must: (a) Be able to exist as a
separate business if the insured's principal business in the state ceased
to exist. (b) Be located in a
separate building, or on a separate floor in the same building, or on the same
floor physically separated from the principal business by structural
partitions. Employees engaged in the principal business must be protected from
the operating hazards of the separate additional operations. (c) Maintain proper
payroll records. Refer to paragraph (F)(2) of this rule on maintenance of
proper payroll records. Example of two operations that could
qualify as two separate businesses: an insured operates bowling lanes and a
movie theater. These distinct operations can qualify as two separate businesses
for classification purposes because: (i) The operations of
bowling lanes and movie theaters are not ordinarily conducted as one business,
and therefore, are not included within each other's scope. (ii) Either the bowling
lane (if the movie theater ceases to exist) or the movie theater (if the
bowling lane cease to exist) can be expected to continue its
operations. Examples of operations that must be
separately classified because they are specifically excluded in the wording of
a classification considered to be the insured's principal business: (A) Code 0251 (irrigation
works operation & drivers); code 0251 and the farm classification cannot be
assigned to the same risk unless the operations described by these
classifications are conducted as separate and distinct businesses. Irrigation
system construction must be separately rated as code 6229. (B) Code 5059 (iron or
steel: erection-frame structures not over two stories in height); code
5040-iron or steel: erection-frame structures cannot be assigned to the same
job or location that code 5059 applies to. (C) Code 8265 (iron or
steel scrap dealer & drivers); wrecking or salvaging must be separately
rated. This code cannot be assigned to a risk engaged in an operation described
by another classification unless the operations subject to Code 8265 are
conducted as a separate and distinct business. (ii) If the separate
additional operation is not encompassed in the classification applicable to the
insured's principal business and meets all the conditions listed in
paragraph (D)(3)(c)(i) of this rule, the insured is considered to be engaged in
an additional operation. If this is the case, a separate basic classification
may be assigned to each operation that qualified as a separate additional
operation. (iii) If the additional
operation does not meet all conditions listed in paragraph (D)(3)(c)(i) of this
rule and is not encompassed in the classification applicable to the
insured's principal business and has a rate: (a) Lower than the
insured's principal business, assign this operation to the same
classification as the insured's principal business. (b) Higher than or equal
to the insured's principal business, assign this operation to the
classification that describes the additional operation. (iv) Policies with more
than one classification may include employees working under several
classifications. Payroll assignment for these employees is subject to the
interchange of labor rule. Refer to paragraph (F) of this rule. (d) Construction or erection operations. These operations are identified by a
"circle" immediately following the code number. Each distinct type of construction or
erection operation must be assigned to the class that specifically describes
the operation only if separate payroll records are maintained for each
operation. If separate payroll records are not
maintained for any construction or erection operation, the highest rated
classification that applies to the job or location where the operation is
performed must be assigned. If a construction or erection operation is
included in the scope of another classification, a separate code must not be
assigned. (i) Insured
subcontractors. An insured subcontractor who performs a
single type of work on a construction project or job just be classified based
on the classification that describes the particular work involved. Example of how to classify the work
performed by an insured subcontractor: The insured subcontractor who performs only
excavation work in connection with the construction of a sewer is classified
under code 6217 (excavation) rather than under code 6306 (sewer
construction). Exception: all operations in conjunction
with concrete construction including making and erecting forms, placing
reinforcing steel and stripping forms, when done by subcontractors, must be
assigned to the appropriate concrete construction classification. (ii) Uninsured
subcontractors. Uninsured subcontractors covered under the
principal or general contractor's policy are classified on the basis of
the classification that would apply if the work were performed by the
principal's own employees. Example of how to classify the work
performed by an uninsured subcontractor: The uninsured subcontractor who performs
only excavation work, but is covered under the policy of the principal
contractor who is performing the construction of a sewer, is classified under
code 6306 (sewer construction). (e) Farm operations. These operations are identified by a
"square" immediately following the code number. A farm is defined as any parcel(s) of land
used for the purpose of agriculture, horticulture, viticulture, dairying, or
stock or poultry raising as a business or commercial venture. If separate payroll records are maintained, a
division of payroll is allowed for each separate and distinct type of
commercial farm operation. If payroll records of the farm classification
are not clear, and separate payroll records are not maintained, the entire
payroll of the farm must be segregated on the basis of proportionate
acreages. Each farm classification includes: (i) All
employees. (ii) Drivers. (iii) All normal repair
and maintenance of buildings or equipment performed by the employees of the
insured. (iv) Operations usual and
incidental to a farm, such as: (a) Maintenance of cows,
hogs or chickens for family use. (b) A family orchard or
truck garden. (c) Hay or grain crops
raised for the purpose of maintaining work animals on the farm. (d) Outside domestic
workers at the farm location. Each farm classification excludes inside
domestic workers at the farm location. (f) Employee leasing, labor contractors and temporary labor
services. (i) Workers assigned to
clients must be classified the same as direct employees of the client
performing the same or similar duties. (ii) If the client has no
direct employees performing the same or similar duties, leased employees are
classified as if they were direct employees of the client entity. Example of how to classify workers assigned
to clients of employee leasing companies, labor contractors, and temporary
labor services: The client is a retail store classified to
code 8017: (a) Code 8017 is
applicable to the worker assigned as a cashier, just as it is applicable to the
client's employee who works as a cashier. (b) Code 7380 is
applicable to the worker assigned as a delivery truck driver, just as it is
applicable to the client's employee who drives a delivery
truck. (g) Mercantile businesses. These operations are identified by a
"diamond" immediately following the code number. A mercantile business is any store or dealer
engaged in the sale of goods or merchandise, or in the sale of services. For mercantile businesses, the classification
is assigned separately for each location. Store operations are classified based on the
principal type of merchandise sold and whether the operations are wholesale or
retail. For purposes of the rule, principal means more than fifty per cent of
gross receipts, excluding receipts derived from the sale of lottery
tickets. The following definitions and instructions
must be used to determine the appropriate store classification. (i) Type of merchandise
sold. If a store sells a variety of goods, each
of which may be subject to a different classification, the store must be
assigned to the classification that best describes the merchandise that
generates more than fifty per cent of the gross receipts. (ii) Wholesale vs.
retail. Retail applies to the sale of merchandise
to the general public for personal or household consumption or use and not for
resale. Wholesale applies to the sale of
merchandise for resale to others; or sale to manufacturers, builders,
contractors, or others for use in their business or as raw materials. Exception: if a store's sales are
clearly retail in nature, the appropriate retail store classification may be
assigned regardless of the definition of retail. Examples of store sales that are clearly
retail in nature: (a) A store selling
artwork in a shopping mall whose majority of sales are for artwork purchased by
businesses. (b) A store selling art
supplies in a shopping mall whose majority of sales are to artists who use the
materials in their business. (iii) Combination of
retail and wholesale. A store that sells merchandise on a
combined wholesale and retail basis must be assigned to the appropriate store
classification depending on whether the majority of gross receipts come from
wholesale or retail sales. (4) Standard
exceptions. Standard exceptions must be separately
classified unless specifically included in a classification assigned to the
business. Classifications for standard exceptions apply
even if the basic classification includes phrases such as "all
employees" or "all operations." Examples of classifications that include
"all employees" or "all operations" but do not specifically
refer to any standard exception employees: (a) Code 6260 (tunneling-pneumatic-all operations); this
classification does not specifically include any standard exception employees.
Those employees are separately classified to codes 8810, 8871, 8742, and
7380. (b) Code 8829 (convalescent or nursing home-all employees); this
classification does not specifically include any standard exception employees.
Those employees are separately classified to codes 8810, 8871, 8742, and
7380. Examples of classifications that specifically
include standard exception employees: (i) Code 4361
(photographer-all employees & clerical, salespersons, drivers); this
classification specifically includes clerical employees, salespersons, and
drivers. For this type of business, those employees are not separately
classified to codes 8810, 8871, 8742, and 7380. (ii) Code 9061 (club NOC
& clerical); this classification specifically includes clerical employees.
For this type of business, those employees of this type of business are not
eligible for classification to code 8810 or 8871. (5) Businesses described
by a standard exception classification. If the principal business is described by a
standard exception classification, the operations of all employees not included
in the definition of standard exception classification must be assigned to the
separate basic classification that most closely describes their
operation. Example of principal business that is described
by a standard exception code: the insured is a public museum: (a) Professional and clerical employees are assigned to code
8810. (b) Maintenance employees are assigned to code 9101. (c) Gift shop employees are assigned to code 8017. (6) Classifications
limited to separate businesses. The assignment of certain classifications is
limited by their notes to separate and distinct businesses because the notes
may describe an operation that frequently is an integral part of a business
described by another classification. Example of assignment of a classification
limited by a note: (a) Code 4511 (Analytical laboratories or assaying - including
laboratory, outside employees, collectors of samples, and drivers); cannot be
assigned to a risk engaged in operations described by another classification
unless the operations subject to code 4511 are conducted as a separate and
distinct business. (7) Repair
operations. Risks with shop operations that involve the
repair of a product for which there is no repair classification are assigned to
the classification that applies to the manufacture of the product, unless this
repair work is specifically referred to by another classification, footnote, or
definition in the manual. Example of repair operations that are
classified to the manufacturing code: (a) A pump repair business is assigned to code 3612 (pump mfg.).
There is no separate code for pump repair. (b) A motor repair business is assigned to code 3643 (electric
power or transmission equipment mfg.). There is no separate code for motor
repair. (8) Recycling
operations. (a) The collection, sorting and handling of recyclable materials
for resale to others must be assigned to the appropriate store or dealer
classification, or to the classification that most closely describes the
business. (b) Risks with operations that involve the reuse of materials for
the production of a new product must be assigned to the classification that
applies to the manufacture of the product unless such work is specifically
referred to another classification, footnote, or definition in the
manual. (E) Payroll assignment: miscellaneous
employees. (1) Miscellaneous
employees who perform duties that are commonly conducted for separate
operations that are subject to more than one basic classification must be
assigned to the governing classification. (2) Miscellaneous
employees include general superintendents (other than construction
superintendents), maintenance or power plant employees, shipping or receiving
clerks, and yard workers (other than construction). Refer to paragraph (D)(5) of this rule if the
governing classification is a standard exception. Example of classification for miscellaneous
employees: The insured has two separate operations, a
machine shop (code 3632) on one floor of the building and a plastics
manufacturing business (code 4452) on another floor. If it is determined that
code 3632 is the governing classification, all elevator operators, porters,
cleaners, superintendents, and shipping clerks serving both operations are
assigned to code 3632. (F) Payroll assignment: interchange of
labor. Some employees may perform duties directly
related to more than one properly assigned classification according to
paragraph (D)(3) of this rule. Their payroll may be divided among the properly
assigned classifications provided that: (1) The classifications
can be properly assigned to the employer according to the rules of the
classification system. (2) The employer
maintains proper payroll records, which show the actual payroll by
classification for that individual employee. (a) Records must reflect actual time spent working within each
job classification and an average hourly wage comparable to the wage rates for
such employees within the employer's industry. (b) Estimated or percentage allocation of payroll is not
permitted. Note: if payroll records do not show the
actual payroll applicable to each classification, the entire payroll of the
individual employee must be assigned to the highest rated classification that
represents any part of his or her work. (3) Payroll for holiday,
vacation, sick pay, overtime and all other forms of payroll that are not
directly attributable to a specific classification code must be allocated to
the classification code with the greatest amount of payroll applicable to the
individual employee. If none of the classification codes applicable
to the employee has the greatest amount of payroll, the payroll for holiday,
vacation sick pay, overtime and all other forms of payroll that are not
directly attributable to a specific classification code must be allocated to
the highest rated classification code applicable to the employee. (4) Some employees
qualify for division of payroll between two or more basic classification codes
and also engage in operations that are classified by codes 8810, 8742, 8748 or
8871. The payroll for these standard exception operations must be allocated to
the basic classification code with the largest amount of payroll applicable to
that employee. (5) An executive order
from the governor requires a business to change its standard means of
operations. For the duration of the executive order, if an
employer has employees work from home, the appropriate classification for the
operations performed will be assigned to the employer, and a division of
payroll will be allowed between two or more classifications including standard
exception classifications. Examples of division payroll allowed under an
executive order: (a) Any operational employee sent home to telework and
performs clerical duties or assigned no duties, all payroll is reported to
8871. (b) When operational employees are sent home and continue
to perform the same task or job duty as they performed at their employer's
location the classification assigned to those operations does not change and
reporting to class code 8871 is prohibited. Example, the employer manufactures
surgical masks. The employees are sent home and continue to sew masks to meet
customers' needs. The operational classification of 2501 cloth, canvas and
related product manufacturing NOC still applies to these operations. The
exposures for the employee do not change. Exceptions: Code 8810 (clerical office employees), code
8871 (clerical telecommuter employees), code 8742 (salespersons, collectors, or
messengers-outside) and code 8748 (automobile salespersons) are not available
for division of payroll under this rule. However, when an interchange of labor
exists between code 8810 and code 8871: (i) Code 8871 will be
assigned when the employee spends more than fifty per cent of the time worked
telecommuting as described by paragraph (B)(2)(a)(ii)(c) of this
rule. (ii) Code 8810 will be
assigned when the employee spends fifty per cent or less of the time worked
telecommuting as described by paragraph (B)(2)(a)(ii)(c) of this
rule. (c) The distribution of payroll for the employee may result
in no single basic classification code that represents the largest amount of
that employee's payroll. In such cases, the payroll included in the
standard exception codes (8810, 8742, 8748 and 8871) will be assigned to the
highest rated classification code that represents any part of the
employee's work. This rule does not apply to miscellaneous
employees. Refer to paragraph (E) of this rule for these employees. Examples of instances of interchange of labor
where an employee's payroll may be divided between two or more
classifications: (i) In a business that
manufactures clocks, all employees must be assigned to either code 3385 (clock
mfg.), code 8810 (clerical), code 8742 (salespersons-outside), or code 7380
(drivers). In this example, division of payroll is only allowed for employees
whose work is divided between activities described by codes 3385 and 7380.
Codes 8810 and 8742 are not eligible for division of payroll. (ii) In a business that
sells furniture, all employees must be assigned to either code 8044 (store:
furniture & drivers), code 8810 (clerical), or code 8742
(salespersons-outside). No division of payroll is allowed in this example,
since drivers are already included in the basic classifications. Codes 8810 and
8742 are not eligible for division of payroll. (iii) In a business that
manufactures paper and also further processes this paper into wallpaper, all
employees must be assigned to either code 4239 (paper mfg.), code 4279
(wallpaper mfg.), code 8810 (clerical), code 8742 (salespersons-outside), or
code 7380 (drivers). A division of payroll is allowed for employees whose work
is divided among activities described by codes 4239, 4279, and 7380. Codes 8810
and 8742 are not eligible for division of payroll.
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Rule 4123-17-09 | Clerical office payroll.
Clerical office payroll shall include only the
payroll of those employees whose duties are confined to keeping the books and
records of the employer, and conducting correspondence, and drafting, or who
are engaged wholly in office work where such books and records are kept, having
no other duties of any nature in or about the employer's premises.
Last updated July 2, 2024 at 11:25 AM
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Rule 4123-17-10 | Excess premiums.
The administrator of workers' compensation,
with the advice and consent of the bureau of workers' compensation board
of directors, has authority to approve contributions made to the state
insurance fund by employers pursuant to sections 4121.121, 4123.29, 4123.32,
and 4123.34 of the Revised Code. Pursuant to sections 4123.29 and 4123.34 of
the Revised Code, the administrator is to keep premiums at the lowest level
consistent with the maintenance of a solvent state insurance fund and of a
reasonable surplus. Pursuant to section 4123.321 of the Revised Code, in the
event there is developed as of any given premium rate revision date a surplus
of earned premium over all losses which, in the judgment of the bureau's
board of directors, is larger than is necessary adequately to safeguard the
solvency of the fund, the bureau's board of directors may return such
excess surplus to the subscriber to the fund in either the form of cash refunds
or a reduction of premiums, regardless of when the premium obligation has
accrued. The bureau's board of directors has full discretion and authority
to determine whether there is an excess surplus of premium; whether to return
the excess surplus to employers; the nature of the cash refunds or reduction of
premiums; the employers who are subscribers to the state insurance fund who are
eligible for the cash refunds or reduction of premiums; the payroll period or
periods for which a reduction of premium has accrued and the premium payment
for which the reduction of premium applies; the applicable date of the cash
refunds or reduction of premiums; and any other issues involving cash refunds
or reduction of premiums due to an excess surplus of earned premium.
Last updated July 27, 2023 at 9:08 AM
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Rule 4123-17-11 | Rule of merit rating controlling the employee having but one eye, one hand, etc.
Should any employee having but one hand, arm, eye, foot or leg thereafter lose any one of the foregoing members in an industrial accident or as the result of an occupational disease the same shall be merit-rated, not as a permanent total disability, but as a permanent partial disability, based upon the loss of the last member only. The remaining cost shall not be charged against the accident experience of the employer.
Supplemental Information
Authorized By:
–
Amplifies:
–
Five Year Review Date:
Prior Effective Dates:
7/1/1962
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Rule 4123-17-12 | Catastrophe claims.
(A) A "catastrophe" is defined
as an occurrence in which two or more employees of one employer are killed or
receive injuries resulting in permanent and total disability. (B) "Catastrophe cost" is
defined as the costs enumerated in section 4123.30 of the Revised Code,
including reserves for these costs, as a direct result of a
catastrophe. (C) Catastrophe cost in excess of two
hundred fifty thousand dollars shall not be included in the experience of a
classification code or of an employer. (D) Catastrophe cost in excess of two
hundred fifty thousand dollars for a retrospective policy year as defined in
rule 4123-17-41 of the Administrative Code, shall not be included in the annual
evaluation or final settlement of that retrospective policy year. (E) Notwithstanding the provisions of
this rule, the administrator of workers' compensation may consider any
special circumstances which may affect the determination of a
catastrophe.
Last updated July 2, 2024 at 11:26 AM
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Rule 4123-17-13 | Employer application for workers'
compensation coverage.
(A) An employer may institute
workers' compensation coverage under this rule by submitting an
application for coverage that completely provides all the information necessary
for the bureau of workers' compensation to establish coverage for the
employer. (1) The application for
coverage shall be submitted on a form designated by the bureau that includes,
at a minimum, the following information: (a) The legal name and business entity type, for example
corporation, limited liability company, sole proprietorship, or
partnership; (b) Address of the employer; (c) The federal tax identification number or social
security number of the employer; (d) Information related to the description of the
employer's operations, including: (i) A description of the
work done or industry conducted by the employer, (ii) The estimated
average number of employees in each kind of work, and (iii) The estimated wages
of employees in each kind of work over the next twelve months. (e) Information related to whether the applicant for
coverage has purchased an existing business or has another associated
policy; (f) Name of the owners or corporate officers, and, where
applicable for elective coverage, the name and necessary identifying
information of the sole proprietor, partners, ministers, or officers of the
family farm corporation; (g) Signature of the person completing the application for
coverage; and (h) A non-refundable application fee equal to the minimum
administrative annual charge set forth in rule 4123-17-26 of the Administrative
Code. (2) If the bureau
receives an application for coverage that does not contain all of the
information specified by paragraph (A)(1) of this rule, the bureau will attempt
to contact the employer to obtain the necessary information. If the applicant
does not provide the necessary information, the bureau will deny the
employer's application for coverage based upon the employer's failure
to provide all the information specified by paragraph (A)(1) of this
rule. (3) When an applicant
fails to provide the information specified by paragraph (A)(1) of this rule and
has employed one or more persons, the employer may be considered a
non-complying employer under rule 4123-14-01 of the Administrative Code, and
the bureau may recover premium and penalties from the employer under rule
4123-14-02 of the Administrative Code. (B) Upon receipt of the application, the
bureau will assign payroll to the classification codes applicable to the duties
performed. The bureau will provide the employer notice of its determination
regarding the employer's classification codes and division of the
employer's payroll within those classification codes, the rates for those
classification codes, and estimated premium due for the remainder of the policy
year in which the employer applies for initial coverage. (C) If the bureau determines, after
reviewing the information submitted with the application provided for in
paragraph (A) of this rule, that the employer was subject to division (B)(2) of
section 4123.01 of the Revised Code but failed to comply with the law in
matters of workers' compensation coverage, the bureau will notify the
employer in writing of such a finding and request any additional information
necessary to make a determination of the period for which the employer was not
in compliance with the law. Upon such determination, the bureau will notify the
employer of the premium and assessments due for the period of
noncompliance. (D) If the bureau determines, after
reviewing the information submitted with the application provided for in
paragraph (A) of this rule, that the employer is essentially the same employer,
regardless of entity type for which workers' compensation coverage
previously had been provided, the bureau may do either of the following:
(1) Transfer the prior policy to the employer,
and if necessary reactivate a previously cancelled policy in order to complete
the transfer, pursuant to rule 4123-17-02 of the Administrative Code, and the
employer will assume any outstanding obligations under the prior policy; or
(2) Deny or rescind the application, and the
employer will maintain the prior or existing policy. (E) Upon receipt of the application fee,
the bureau will issue a notice of workers' compensation coverage pursuant
to section 4123.83 of the Revised Code. The notice will indicate that coverage
is contingent on payment of estimated premium and assessments due. (F) Upon receipt of the application fee,,
the employer's coverage begins. (1) Unless the provisions
of paragraph (D) of this rule apply, such coverage is effective from the date
of receipt of the application for coverage pursuant to paragraph (A) of this
rule. (2) A credit in an amount
equal to the application fee will be applied to the employer's account
upon receipt of the first estimated premium payment. (3) If the first estimated premium payment is not
made, the employer's coverage will lapse back to the effective date of
the policy.
Last updated July 27, 2023 at 9:08 AM
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Rule 4123-17-14 | Reporting of payroll and reconciliation of premium due.
(A) Definitions. (1) As used in this
chapter of the Administrative Code: (a) "Applied EM" means the experience modification, or
"EM," as set forth in rule 4123-17-03 of the Administrative Code,
except where such EM is modified by participation in the group experience
rating program set forth in rules 4123-17-61 to 4123-17-66 of the
Administrative Code, the claim impact reduction program set forth in rule
4123-17-71 of the Administrative Code, or the EM cap program set forth in rule
4123-17-03.2 of the Administrative Code. In such cases, "applied EM"
means the experience modifier resulting from participation in those
programs. (b) "Current" with respect to payments due the bureau
of workers' compensation means not more than forty-five days past
due. (c) "Payments due the bureau" means any premiums,
administrative costs, assessments, fines or monies otherwise due to any fund
administered by the bureau for which the employer has not submitted a dispute
of the obligation to the bureau's adjudicating committee as set forth in
rule 4123-14-06 of the Administrative Code. (d) "Payroll" or "wages" means the entire
remuneration allowed by an employer to employees in the employer's service
for the applicable period. (e) "Public employer taxing district" means an employer
that is not the state itself and subject to the provisions of sections 4123.38
and 4123.39 of the Revised Code. (f) "Remuneration" has the same meaning as defined in
division (H) of section 4141.01 of the Revised Code. (i) The definition of
remuneration applies to all persons of such employers considered to be
employees under the statutes or rules of the bureau, regardless of whether the
employer is required to report payroll or remuneration to the Ohio department
of job and family services under Chapter 4141. of the Revised Code or whether
the employer reports payroll or remuneration to the Ohio department of job and
family services for such persons considered to be employees by the
bureau. (ii) For employees who
customarily receive tips or gratuities, remuneration includes all actual wages
paid and all tips and gratuities. (2) All other terms have
the same meaning as prescribed in section 4123.01 of the Revised
Code. (B) Private employers: notice of
estimated premium. (1) Except as otherwise
provided in paragraph (E) of this rule, the bureau will notify private
employers of the development of estimated premium no later than the first day
of May preceding the policy year for which such premium is due. (2) The bureau will provide all of the
following: (a) The estimated payroll used by the bureau to calculate the
employer's estimated premium due; (b) The classification codes in which the employer's payroll
is allocated and the base rates for each of the classification codes
identified; (c) The employer's applied EM used in determining premium
due; and (d) The employer's estimated premium due for the applicable
policy year. (3) An employer may revise the estimated
payroll amount used to calculate estimated premium due for the policy year for
good cause shown, as determined by bureau policy. (a) The estimated premium will be revised for the policy year and
the balance of installments for the remainder of the policy year will be
adjusted to reflect the new estimated premium amount. (b) Requests will not be accepted to revise payroll for a policy
year after the last business day of March in that policy year; the adjustment
to premium due will be upon the employer's report of actual payroll
pursuant to paragraph (D) of this rule. (C) Private employers: invoice and
estimated premium payments. (1) Except as otherwise
provided in paragraph (E) of this rule, the bureau will provide private
employers with an invoice for estimated premium no later than the first day of
June immediately preceding the policy year for which the estimated premium is
charged. The bureau will provide subsequent invoices according to a schedule
made available with the notice of estimated premium. (2) Payment of invoices
will be due no later than the date indicated on each invoice. (3) The administrator of
workers' compensation may assess penalties and late fees on payments
received after the deadlines set forth in paragraph (C)(2) of this rule,
pursuant to rule 4123-17-16 of the Administrative Code. (D) Private employers: payroll report and
reconciliation of premium due. (1) Except as otherwise
provided in paragraphs (D)(5) and (E) of this rule, after the conclusion of
each policy year, every private employer shall submit a payroll report to the
bureau containing the number of employees employed within each of the
employer's assigned classification codes and the aggregate amount of wages
paid to such employees over the relevant time period. (2) The bureau will establish an
electronic payroll reconciliation process to address the difference between
estimated gross payroll and actual gross payroll immediately upon the filing of
the payroll report. (3) The payroll report shall report data
for the full policy year. The report must be filed by, and any payment due the
bureau paid by the fifteenth day of August, and effective the policy year
beginning July 1, 2024, by the thirty-first day of August, immediately
following the conclusion of the policy year. Any balance due the employer will
be credited to the employer's account. (4) An employer may elect to provide
payment other than through the electronic reconciliation process, provided
payment is received by the fifteenth day of August, and effective the policy
year beginning July 1, 2024, by the thirty-first day of August, immediately
following the conclusion of the policy year. (5) The administrator may
waive the provisions of paragraph (D)(1) of this rule for private employers
who: (a) Are not an alternate employer organization ("AEO")
as defined in section 4133.01 of the Revised Code or a professional employer
organization ("PEO") as defined in section 4125.01 of the Revised
Code; (b) Do not have any employees in the policy year, including no
employees subject to rule 4123-17-07 of the Administrative Code;
and (c) Have reported no payroll on the payroll report for the three
previous policy years. (E) Alternate employer organizations and
professional employer organizations. (1) Each employer that is
recognized by the administrator as an AEO or as a PEO shall submit a monthly
payroll report. (2) The AEO or the PEO shall
electronically report data for each month no later than the fifteenth day after
the last day of the month for which payroll is being reported and pay all
monthly premium and assessments concurrently with the filing of the monthly
payroll report. (3) If an AEO or a PEO fails to make
timely payment of premiums and assessments pursuant to this rule, coverage will
lapse, and the administrator will proceed to revoke the registration of the AEO
or the PEO pursuant to rule 4123-17-15.7 of the Administrative
Code. (4) The administrator may waive the provisions of paragraph
(D)(1) of this rule for a client employer of an AEO or a PEO if the client
employer: (a) meets all of the
criteria of paragraphs (D)(5)(a) and (D)(5)(b) of this rule; (b) has been in an AEO
agreement or a PEO agreement for the entire policy period; and (c) reports all wages
under the workers' compensation policy for the AEO or PEO for the entire
policy period. (F) Public employer taxing districts:
notice of estimated premium. (1) The bureau will
notify public employer taxing districts of the development of estimated premium
due no later than the last day of October preceding the start of the policy
year. (2) The bureau will
provide all of the following: (a) The estimated payroll used by the bureau to calculate the
employer's estimated premium due; (b) The classification codes in which the employer's payroll
is allocated and the base rates for each of the classification codes
identified; (c) The employer's applied EM; and (d) The employer's estimated premium due for the applicable
policy year. (3) An employer may
revise the estimated payroll amount used to calculate estimated premium due for
the policy year for good cause shown, as determined by bureau
policy. (a) The estimated premium will be revised for the policy year and
the balance of installments for the rest of the year will be adjusted to
reflect the new estimated premium amount. (b) Requests will not be accepted to revise payroll for a policy
year after the last business day of September in that policy year; the
adjustment to premium due will be upon the employer's report of actual
payroll pursuant to paragraph (H) of this rule. (G) Public employer taxing districts:
invoice and estimated premium payments. (1) The bureau will provide public
employer taxing districts with an invoice for estimated premium no later than
the first day of December immediately preceding the policy year for which the
estimated premium is charged. The bureau will provide subsequent invoices
according to a schedule made available with the notice of estimated
premium. (2) Payment of invoices
will be due no later than the date indicated on each invoice. (3) The administrator may
assess penalties and late fees on payments received after the deadlines set
forth in paragraph (G)(2) of this rule pursuant to rule 4123-17-16 of the
Administrative Code. (H) Public employer taxing districts:
payroll report and reconciliation of premium due. (1) After the conclusion
of each policy year, every public employer taxing district shall submit a
payroll report to the bureau containing the number of employees employed within
each of the employer's assigned classification codes and the aggregate
amount of wages paid to such employees over the policy year. (2) The employer shall
submit its payroll report electronically and remit any payments due the bureau
no later than the fifteenth day of February, and effective the policy year
beginning January 1, 2025, no later than the last day of February, immediately
following the conclusion of the policy year. Immediately upon receipt of the
payroll report, the bureau will adjust the premium and assessments charged to
each employer for the difference between estimated gross payrolls and actual
gross payrolls. At the conclusion of the payroll and premium reconciliation,
each employer shall remit any payments due the bureau. If the reconciled
premium results in a credit, the bureau will post such credit to the
employer's account. (I) Allocation of payroll. (1) If an employer elects
under section 4123.292 of the Revised Code to obtain other-states'
coverage directly from an other-states' insurer for employment
relationships localized in Ohio, the employer shall notify the bureau of the
election on a form prescribed by the bureau and provide the bureau with a copy
of the other-states' coverage policy. (2) An employer that
elects to obtain other-states' coverage directly from an
other-states' insurer under section 4123.292 of the Revised Code shall
include on the payroll report required by this rule only the remuneration for
work the employees performed in Ohio and other work not covered by the
other-states' policy. The employer will maintain documentation of the
amount of remuneration paid to its employees for work performed outside of Ohio
and covered by the other-states' policy and provide it to the bureau upon
request. (3) If an employer
employs an employee covered under a federal Longshore and Harbor Workers'
Compensation Act policy, the employer shall include on the payroll report the
remuneration for work the employees performed in Ohio for which the employees
are eligible to receive compensation and benefits under Chapters 4121. and
4123. of the Revised Code. The employer will maintain documentation of the
amount of remuneration for work covered by an insurer under the federal
Longshore and Harbor Workers' Compensation Act and provide it to the
bureau upon request.
Last updated July 2, 2024 at 11:30 AM
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Rule 4123-17-14.1 | Misrepresentation of payroll.
(A) No employer shall knowingly
misrepresent to the bureau of workers' compensation the amount or
classification of payroll upon which the premium under this chapter is based.
No self-insuring employer shall knowingly misrepresent to the bureau the amount
of paid compensation paid by such employer. (B) As used in the rule,
"knowingly" means that the employer had actual knowledge of the
misrepresentation and was aware that the misrepresentation would cause a
certain result. An employer will not be deemed to have knowingly misrepresented
its payroll, its classification of payroll, or its paid compensation where the
employer's determination of how to report was based on: (1) The employer's
reasonable interpretation of a law, rule, or classification code;
or (2) Prior reporting
instructions or written advice received from the bureau. (C) Whenever the bureau finds that an
employer violated division (A) of section 4123.25 of the Revised Code by
knowingly misrepresenting its payroll or classification of payroll to the
bureau, the administrator of workers' compensation or the
administrator's designee may impose a penalty that the administrator or
the administrator's designee deems appropriate upon the employer based on
the following criteria: (1) Amount of difference
between the premium the employer paid and the amount the employer should have
paid; (2) The frequency with
which the employer has misrepresented its payroll or classification of payroll
to the bureau; (3) The number of
misrepresentations or misclassifications the employer has made to the
bureau; (4) The duration for
which the employer made such misrepresentations or
misclassifications; (5) Whether the bureau
has found misclassified or underreported payroll in a premium audit on prior
occasion; and (6) Any additional circumstances that
warrant consideration in determining the penalty amount. (D) The penalty imposed under paragraph (C) of this rule
will not exceed ten times the amount of the difference between the premium the
employer paid and the amount the employer should have paid. (E) Whenever the self-insuring employers evaluation board
finds that a self-insuring employer violated division (B) of section 4123.25 of
the Revised Code by knowingly misrepresenting its paid compensation to the
bureau, the self-insuring employers evaluation board may impose a penalty upon
the employer as provided under section 4123.25 of the Revised
Code. (F) Except for a self-insuring employer, an employer may
appeal a penalty imposed under this rule to the adjudicating committee under
section 4123.291 of the Revised Code.
Last updated June 17, 2024 at 10:43 AM
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Rule 4123-17-14.2 | Installment payments.
Effective:
March 26, 2018
(A) An employer may elect to pay its
estimated premium due in equal installments of two, four, six, or twelve in
number. (1) Employers paying in
advance of the installment schedule will not incur a penalty for early
payment. (2) Employers paying the
minimum administrative charge shall not be eligible for an installment
plan. (B) Initial installment
plans. (1) All eligible private
employers will be invoiced on the six-payment installment plan. (2) All eligible public
employer taxing districts will be invoiced on the twelve-payment installment
plan. (C) An employer may change its
installment plan upon request. (1) A private employer
must request a change in installment plan no later than the fiftheent day of
May preceding the start of the policy year. (2) A public employer
taxing district must request a change in installment plan no later than the
fifteenth day of November preceding the start of the policy year. (D) Each installment shall be due by the
date indicated on the invoice. (E) In making payment arrangements with an employer, the bureau
may alter an installment plan if it determines such change is
appropriate. (F) Election of installment payments under this rule shall not
disqualify an employer from participation in the rating plans and discount
programs established in this chapter, but any lapse periods imposed on an
employer for failure to timely pay installments shall be counted toward the
maximum number of days during which an employer is permitted to be lapsed in
the eligibility criteria for such rating plans and discount
programs. (G) A public employer taxing district may elect to defer payment
of installments due prior to April thirtieth in that policy year until April
thirtieth. Such election must occur on or before November fifteen of the
previous policy year. If an employer makes such election, the bureau will apply
a deferment fee of 0.94 per cent to the total amount of the installments that
are deferred. (H) The bureau will grant an early
payment discount to an employer that pays the full twelve month estimated
annual premium by the due date for the first installment for each policy year.
The employer must be in an active policy status as of the due date for the
first installment to be eligible for this discount. For purposes of this rule,
"active policy status" does not include a policy that is a no
coverage policy or a policy that is lapsed. If an employer elects to pay all
installments in a single payment, the bureau will grant a discount to the
eligible employer for that policy period as set forth in this rule. The
discount cannot reduce the total amount due below the minimum required premium
as provided in rule 4123-17-26 of the Administrative Code. (1) A discount of two per
cent will be available to private employers for the policy years commencing on
July 1, 2017. (2) A discount of two per
cent will be available to public employer taxing districts for the policy years
commencing on January 1, 2017.
Last updated June 17, 2024 at 10:43 AM
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Rule 4123-17-15 | Alternate employer organizations and professional employer organizations.
(A) Definitions. As used in rules 4123-17-15 to 4123-17-15.7 of
the Administrative Code: (1) "Alternate
employer organization" or "AEO" has the same meaning as defined
in section 4133.01 of the Revised Code. "Alternate employer
organization" or "AEO" does not include a service agency that is
in the business of employing individuals for the purpose of utilizing the
services of the individuals for a temporary period of time. (2) "Professional employer
organization" or "PEO" has the same meaning as defined in
section 4125.01 of the Revised Code. PEOs that coemploy a part of a client
employer's workforce are to comply with the provisions set forth in
paragraph (C) of this rule. "Professional employer organization" or
"PEO" does not include a service agency that is in the business of
employing individuals for the purpose of utilizing the services of the
individuals for a temporary period of time. (3) "Client employer" has the
same meaning as defined in section 4125.01 of the Revised Code for client
employers of a PEO and section 4133.01 of the Revised Code for client employers
of an AEO. "Client employer" does not mean an employer who is a
noncomplying employer as defined in rule 4123-14-01 of the Administrative
Code. (4) "AEO
agreement" means an alternate employer organization agreement as defined
in section 4133.01 of the Revised Code. On entering into an AEO agreement all
worksite employees of a client employer are covered under the workers'
compensation policy of the AEO. (5) "PEO agreement" means a
professional employer organization agreement as defined in section 4125.01 of
the Revised Code. (6) "PEO reporting entity"
means a professional employer organization reporting entity as defined in
section 4125.01 of the Revised Code. (7) "Assurance organization,"
"coemploy," and "shared employee" have the same meaning as
defined in section 4125.01 of the Revised Code. (8) "Trade
secret" has the same meaning as defined in section 1333.61 of the Revised
Code. (9) "Working
capital" means the excess of current assets over current liabilities as
determined by generally accepted accounting principles. (10) "Worksite
employee" has the same meaning as defined in section 4133.01 of the
Revised Code. (11) "Policy number," is a term
synonymous with "risk number," meaning the identification number that
the bureau of workers' compensation assigns to an employer. (B) Where an AEO or a PEO is required to
give notice, register, or make a report to the bureau under rules 4123-17-15 to
4123-17-15.7 of the Administrative Code, the AEO or the PEO shall do so on
forms prescribed by the bureau. Forms are to be completed in full, as
determined by the bureau, for such notice, registration, or report to be
effective. (C) Partial leases. (1) A PEO may enter into
a PEO agreement to coemploy part of a client employer's workforce,
provided the client employer is not a temporary agency, for workers'
compensation purposes only to the extent wages are paid by and reported under
the tax identification number of the PEO for federal tax purposes. (2) Under such partial
lease agreement, the PEO shall report under its workers' compensation
policy number the payroll associated with the wages paid by and reported by the
PEO for federal tax purposes under the PEO's tax identification number.
The client employer shall report under its workers' compensation policy
number all payroll associated with wages not paid by and not reported under the
PEO's tax identification number. (3) All of a client
employer's payroll within a classification code is to be reported in its
entirety under either the workers' compensation policy number of the PEO
or client employer; such payroll cannot be split between the PEO and client
employer. (D) Obligations of an AEO. An AEO must perform all of the following
functions: (1) Annually provide
written notice to each worksite employee an AEO assigns to perform services to
a client employer of the relationship between and the responsibilities of the
AEO and the client employer; (2) Process and pay all
wages and applicable state and federal payroll taxes associated with the
worksite employee under the federal tax identification tax number of the client
employer, either directly by the AEO or through a third party vendor contracted
by the AEO that is not a client employer, irrespective of payments made by the
client employer, pursuant to the terms and conditions of compensation in the
AEO agreement between the AEO and the client employer. (3) Pay all related
payroll taxes associated with a worksite employee under the federal tax
identification number of the client employer independent of the terms and
conditions contained in the AEO agreement between the AEO and the client
employer. (4) Annually certify to
the bureau that all client employer federal payroll taxes have been timely and
appropriately paid and provide proof of payment to the bureau upon
request. (5) In any AEO agreement
between an AEO and a client employer, list the client employer on the W-2 of
all worksite employees, but the AEO remains jointly and severally liable for
all applicable local, state, and federal withholding and employer-paid taxes
with respect to the worksite employees. (6) File federal payroll
taxes entirely under the tax identification number of the client employer but
remain jointly and severally liable for all wages and payroll taxes associated
with worksite employees. (7) If any client
employer of an AEO fails to transmit payment to the AEO sufficient to cover
payment of all wages and employer-paid taxes, keep a record of the nonpayment
or underpayment and a record that the AEO nonetheless paid the wages and taxes
owed. (8) Maintain
workers' compensation coverage, pay all workers' compensation
premiums, and manage all workers' compensation claims, filings, and
related procedures associated with the worksite employee in compliance with
Chapters 4121. and 4123. of the Revised Code under the AEO's policy
number, except that when worksite employees include elective coverage persons
as those terms are defined in rule 4123-17-07 of the Administrative Code,
payroll reports are to include the entire amount of payroll associated with
those persons and are not subject to the weekly minimum and maximum provided in
rule 4123-17-30 of the Administrative Code. (9) Maintain complete
records separately listing the classification codes of each client employer and
the payroll reported to each classification code for each client employer for
each payroll reporting period during the time period covered in the AEO
agreement. Payroll is to be kept in a manner that clearly identifies the
appropriate classification codes assigned to each client employer, the payroll
reported in each classification code, and the amount of premiums paid for each
client employer for each payroll period covered in the AEO
agreement. (10) Maintain a complete
record of workers' compensation claims for each client employer, with
claims separately identified according to the client employer. (11) Report individual
client employer payroll, claims, and classification data under a separate and
unique subaccount to the bureau. (12) Within fourteen days
of receiving notice from the bureau that a dividend, refund, or rebate will be
applied to workers' compensation premiums, provide a copy of that notice
to any client employer to whom that notice is relevant. (13) Within thirty days
after receiving a dividend, refund, or rebate that is applied to workers'
compensation premiums, either fully redistribute or fully credit the client
employer to whom that dividend, refund, or rebate is relevant. (14) Not provide partial
or split workers' compensation coverage for worksite employees in which
the client employer provides that coverage for some, but not all, of the client
employer's worksite employees. (E) Obligations of a PEO. A PEO must perform all of the following
functions: (1) Provide written
notice to each shared employee it assigns to a client employer of the
relationship between and the responsibilities of the PEO and the client
employer. (2) Pay wages and payroll
taxes associated with shared employees as established within the PEO agreement,
either directly by the PEO or through a third party vendor contracted by the
PEO that is not a client employer. The responsibility for making payments under
this section is not contingent on receipt of payment from the client employer.
Shared employee wages are to be paid by and reported under the tax
identification number of the PEO for federal tax purposes. A PEO may only enter
into agreements in which all employees of the client employer are shared and
reported under the PEO's tax identification number for federal tax
purposes, but reported under the client employer's policy number for
workers' compensation purposes, when: (a) The client employer's payroll is wholly reported under
the PEO employer's tax identification number for federal tax purposes;
and (b) The client employer's payroll is wholly reported under
the client employer's policy number for workers' compensation
purposes. (3) Be responsible for
maintaining both adequate and required employment-related records for
employees, and for reporting such information as may be required by appropriate
governmental agencies. (4) Comply with
applicable state laws regarding workers' compensation insurance
coverage. (5) Maintain complete
records, separately listing the payroll and claims of its client employers for
each payroll reporting period. Payroll is to be kept in a manner that clearly
identifies the appropriate classification codes assigned to each client
employer, the payroll reported in each classification code, and the amount of
premiums paid for each client employer for each payroll period covered in the
PEO agreement. Claims are to be separately identified according to the client
employer. (6) Report individual
client employer payroll, claims, and classification data under a separate and
unique subaccount to the bureau. (7) Maintain
workers' compensation coverage, pay all workers' compensation
premiums and manage all workers' compensation claims, filings, and related
procedures associated with a shared employee in compliance with Chapters 4121.
and 4123. of the Revised Code, except that when shared employees include
ministers or elective coverage persons as those terms are defined in rule
4123-17-07 of the Administrative Code, payroll reports are to include the
entire amount of payroll associated with those persons and are not subject to
the weekly minimum and maximum provided in rule 4123-17-30 of the
Administrative Code. The PEO must maintain workers' compensation coverage
under its workers' compensation policy number for all payroll reported
under its tax identification number for federal tax purposes, except as
provided in paragraph (D)(2) of this rule. (8) Within fourteen days
after receiving notice from the bureau that a dividend, refund, or rebate will
be applied to workers' compensation premiums, provide a copy of that
notice to any client employer to whom that notice is relevant. (9) Within thirty days
after receiving a dividend, refund, or rebate that is applied to workers'
compensation premiums, either fully redistribute or fully credit the client
employer to whom that dividend, refund, or rebate is relevant.
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Rule 4123-17-15.1 | AEO agreements and PEO agreements.
(A) Where a client employer enters into
an AEO or a PEO agreement: (1) Each client employer
must establish and maintain an individual account with the bureau of
workers' compensation. (2) The AEO or the PEO is
considered the succeeding employer, solely for purposes of workers'
compensation experience, and is subject to rule 4123-17-02 of the
Administrative Code. (3) If the AEO agreement
or the PEO agreement between a client employer and the AEO or the PEO is
terminated, or if the AEO or the PEO declares bankruptcy or ceases operation in
Ohio, the AEO or the PEO must notify the bureau and each client associated with
that AEO or that PEO within thirty days from the effective date of termination,
and identify on forms prescribed by the bureau the portion of the experience of
the AEO or the PEO related to the client employer that will be transferred to
the client employer. (4) An AEO or a PEO shall
report any transfer of employees between related AEO entities, PEO entities or
PEO reporting entities to the bureau within fourteen calendar days after the
date of the transfer. The AEO, the PEO, or the PEO reporting entity shall
include in the report all client payroll and claim information regarding the
transferred employees and a notice of all workers' compensation claims
that have been reported to the AEO, the PEO, or the PEO reporting entity in
accordance with the internal reporting policies of the AEO, the PEO or the PEO
reporting entity. (B) An AEO or a PEO shall notify the
bureau within thirty days when entering into an AEO agreement or a PEO
agreement, or when changing the type of a PEO agreement. The AEO, or the PEO
for payroll reported under the PEO's policy, must list payroll within the
existing classification codes of the client employer. If the bureau is not
notified within thirty days, the bureau will recognize the AEO agreement or the
PEO agreement on the date the bureau receives notice and the client employer is
responsible for reporting payroll and claims under the client employer's
individual policy until the recognized effective date of the
agreement. (C) An AEO or a PEO which enters into an
AEO agreement or a PEO agreement with a noncomplying employer or an AEO or a
PEO which fails to comply with rules 4123-17-15 to 4123-17-15.7 of the
Administrative Code will not be considered the employer for workers'
compensation purposes. In these instances, the payroll of the shared employees
is to be reported by the client employer under its workers' compensation
policy number for workers' compensation premium and claims purposes,
unless barred by federal law. Claims that are filed by the client
employer's shared employees will be charged to the experience of the
client employer. (D) The bureau will not recognize an AEO
agreement or a PEO agreement between an out of state client employer and an AEO
or a PEO where the employees of the out of state client employer do not have
sufficient contacts with Ohio to meet the jurisdictional conditions for
coverage. (E) An AEO agreement or a PEO agreement,
or a change in an AEO agreement or a PEO agreement, filed with the bureau will
have the following effective date with the bureau for workers'
compensation premium and claims purposes: (1) For a self-insured
AEO or self-insured PEO entering into an AEO agreement or a PEO agreement, the
commencement date of the AEO agreement or PEO agreement; or (2) For a state fund AEO
or state fund PEO entering into an AEO agreement or a PEO agreement or changing
an AEO agreement or a PEO agreement, and for a self-insured AEO or self-insured
PEO changing an existing AEO agreement or PEO agreement: (a) If the commencement date of the AEO agreement or the PEO
agreement, or change in the AEO agreement or the PEO agreement, is January
first or July first, the commencement date; or (b) If the commencement date of the AEO agreement or the PEO
agreement, or change in the AEO agreement or the PEO agreement, is not January
first or July first, the next January first or July first, whichever is
earlier. (F) An AEO or a PEO cannot enter any AEO
agreement or PEO agreement where the client employer is an AEO or a PEO, and
the bureau will not recognize any AEO agreement or PEO agreement where the
client employer is an AEO or a PEO. (G) The following acts are not
permitted: (1) A PEO from entering
into an AEO agreement with any client employer, and (2) An AEO from entering
into a PEO agreement with any client employer. (H) For each occurrence of the following, an AEO or a PEO will be
assessed fifty dollars as a late processing fee: (1) The AEO or the PEO
fails to notify the bureau within thirty days when entering into, or changing,
an AEO agreement or a PEO agreement; (2) The AEO or the PEO
fails to notify the bureau or client employer within thirty days of termination
of an AEO agreement or a PEO agreement; (3) The AEO or the PEO
fails to notify the bureau or a client employer within thirty days of declaring
bankruptcy; and (4) The AEO or the PEO
fails to notify the bureau or a client employer within thirty days of ceasing
operations in Ohio. (I) An AEO or a PEO may appeal any late processing fees assessed
by the bureau under paragraph (H) of this rule pursuant to the administrative
hearing procedure set forth in section 4123.291 of the Revised
Code.
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Rule 4123-17-15.2 | Registration and reporting requirements.
(A) The AEO or the PEO shall register
with the bureau of workers' compensation no later than thirty days after
the formation of the AEO or the PEO. An AEO or a PEO operating in this state
shall register annually with the administrator of workers'
compensation. (1) The AEO or the PEO
will submit an initial registration fee as set forth in the appendix to this
rule with its initial application. The AEO or the PEO will submit an annual
renewal fee as set forth in the appendix to this rule to the bureau on or prior
to December thirty-first of each year. (2) The AEO or the PEO
will submit the following information when registering with the
bureau: (a) A list of each of the client employers of the AEO or the PEO
that is current as of the date of registration for purposes of initial
registration or current as of the date of annual registration renewal, or
within fourteen days of adding or releasing a client, that includes the client
employer's name, address, federal tax identification number, and bureau of
workers' compensation policy number; (b) The name or names under which the AEO or the PEO conducts
business; (c) The address of the principal place of business of the AEO or
the PEO and the address of each office it maintains in this state; (d) The taxpayer or employer identification number of the AEO or
the PEO; (e) A list of each state in which the AEO or the PEO has operated
in the preceding five years, and the name, corresponding with each state, under
which the AEO or the PEO operated in each state, including any alternative
names, names of predecessors, and if known, successor business entities, and
whether the entity is an AEO or PEO in the other state(s); (f) A list of all corporate officers of the AEO or the
PEO; (g) A list of all related corporate entities; (h) An attestation of the accuracy of the data submissions from
the chief executive officer, president, or other individual who serves as the
controlling person of the AEO or the PEO; (i) Security pursuant to sections 4125.05 and 4133.07 of the
Revised Code; and (j) The most recent financial statement prepared and audited in
accordance with rule 4123-17-15.4 of the Administrative Code, and such
financial statement is to be no older than thirteen months at the time it is
submitted to the bureau. (B) On an annual basis, on a date
determined by the bureau, the AEO or the PEO shall provide an annual report of
its client employers and total workforce to the bureau. The report will list
all individual employees, by client employer. For each employee, the AEO or the
PEO will provide employee identification information, quarterly payroll,
associated classification code, title or position, and department. (C) A PEO reporting entity that will
complete the financial reporting mandates of this chapter for commonly owned or
controlled PEOs must register with the bureau and pay an initial registration
fee as set forth in the appendix to this rule. (1) The PEO reporting
entity shall submit the following information when registering with the
bureau: (a) A list of each of the PEOs for which the PEO reporting entity
will complete financial reporting mandates; (b) The name or names under which the PEO reporting entity
conducts business; (c) The address of the PEO reporting entity's principal
place of business and the address of each office it maintains in this
state; (d) The PEO reporting entity's taxpayer or employer
identification number; (e) A list of all corporate officers of the PEO reporting
entity; (f) The most recent financial statement prepared and audited in
accordance with rule 4123-17-15.4 of the Administrative Code, and such
financial statement is to be no older than thirteen months at the time it is
submitted to the bureau; (g) Security pursuant to section 4125.05 of the Revised Code; and
(h) An attestation of the accuracy of the data submissions from
the chief executive officer, president, or other individual who serves as the
controlling person of the PEO reporting entity. (2) The PEO reporting
entity will renew such registration and pay an annual renewal fee as set forth
in the appendix to this rule no later than December thirty-first of each
year. (D) The administrator may grant limited
registration to an AEO or a PEO for reasons specified by the administrator in
the certificate of limited registration if the AEO or the PEO provides all of
the following items: (1) A properly executed
request for limited registration on a form prescribed by the
bureau; (2) A limited
registration fee as set forth in the appendix to this rule; (3) All information set
forth in paragraphs (A)(2)(a) to (A)(2)(h) of this rule; and (4) Information and
documentation necessary to show that the AEO or the PEO satisfies all of the
following criteria: (a) The AEO or the PEO is domiciled outside of Ohio and does not
maintain an office in the state; (b) The AEO or the PEO is licensed or registered as an AEO or a
PEO in another state; (c) The AEO or the PEO does not participate in direct
solicitations for client employers located or domiciled in Ohio;
and (d) The AEO or the PEO has fifty or fewer shared employees
employed or domiciled in Ohio on any given day. For purposes of this paragraph,
an AEO or a PEO is not domiciled outside of Ohio if a commonly owned or
otherwise related corporate entity is domiciled in Ohio or maintains an office
in the state. (5) The administrator may
demand security of the limited registration AEO or the limited registration PEO
pursuant to sections 4125.05 and 4133.07 of the Revised Code. (E) The bureau will maintain a list of
AEOs, PEOs, and PEO reporting entities registered under this rule that is
readily available to the public. (F) The following acts are not
permitted: (1) Beginning on and
after January 1, 2022, an AEO, that is currently registered in Ohio under this
rule, owning, co-owning, or commonly controlling an AEO, a PEO, or a PEO
reporting entity that is registered in Ohio under this rule, and (2) Beginning on and
after January 1, 2022, a PEO or a PEO reporting entity, that is currently
registered in Ohio under this rule, owning, co-owning, or commonly controlling
an AEO that is registered in Ohio under this rule. (G) Except to the extent necessary for the administrator to
administer the statutory duties of the administrator and for employees of the
state to perform their official duties, all records, reports, client lists, and
other information obtained from an AEO, a PEO or a PEO reporting entity under
this rule are confidential and are considered trade secrets and will not be
published or open to public inspection.
View Appendix
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Rule 4123-17-15.4 | Financial mandates.
(A) An AEO, a PEO, or a PEO reporting
entity shall prepare financial statements in accordance with generally accepted
accounting principles and submit them electronically for registration and
registration renewal pursuant to sections 4125.05 and 4133.08 of the Revised
Code. (1) The financial
statements shall be audited by an independent certified public accountant
authorized to practice in the jurisdiction in which that accountant is
located. (a) The resulting report of the auditor is not to include either
of the following: (i) A qualification or
disclaimer of opinion as to adherence to generally accepted accounting
principles; or (ii) A statement
expressing substantial doubt about the ability of the AEO, the PEO, or the PEO
reporting entity to continue as a going concern. (b) If an AEO or a PEO does not have at least twelve months of
operating history on which to base financial statements, the financial
statements are to be reviewed by a certified public accountant. (2) A PEO reporting
entity may submit a combined or consolidated financial statement for its member
PEOs to satisfy this paragraph. If the combined or consolidated financial
statement includes entities that are not PEOs or that are not in the PEO
reporting entity, the controlling entity of the PEO reporting entity that is
submitting the consolidated or combined financial statement shall guarantee
that the PEOs of the PEO reporting entity have completely satisfied paragraph
(B) of this rule. (B) An AEO, a PEO, or a PEO reporting
entity is obligated to maintain positive working capital at initial or annual
registration, as reflected in the financial statements submitted to the bureau
of workers' compensation under paragraph (A)(2)(j) of rule 4123-17-15.2 of
the Administrative Code. If a deficit in working capital is reflected in the
financial statements submitted to the bureau, the AEO, the PEO, or the PEO
reporting entity shall: (1) Submit to the bureau
a quarterly financial statement for each calendar quarter during which there is
a deficit in working capital, accompanied by an attestation of the chief
executive officer, president, or other individual who serves as the controlling
person of the AEO, the PEO, or the PEO reporting entity that all wages, taxes,
workers' compensation premiums, and employee benefits have been paid by
the AEO, the PEO, or members of the PEO reporting entity. (2) Obtain a bond,
irrevocable letter of credit, or securities with a minimum market value in an
amount sufficient to cover the deficit in working capital. Such security is to
be held by a depository designated by the administrator of workers'
compensation to secure payment by the AEO, the PEO, or the PEO reporting entity
of all taxes, wages, benefits, or other entitlements due or otherwise
pertaining to shared employees, if the AEO, the PEO, or the PEO reporting
entity does not make those payments when due.
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Rule 4123-17-15.5 | Self-insured AEOs and PEOs.
(A) An AEO or a PEO registered with the
bureau of workers' compensation under rule 4123-17-15.2 of the
Administrative Code may apply to pay compensation directly as a self-insuring
employer. (1) The AEO or the PEO
must meet all eligibility criteria set forth in section 4123.35 of the Revised
Code. (a) The AEO or the PEO will provide five years of financial
records as set forth in division (B)(1)(e) of section 4123.35 of the Revised
Code. The administrator of workers' compensation cannot waive this
mandate. (b) Worksite employees of an AEO and shared employees of a PEO
will be considered employees of the AEO or the PEO for the purposes of meeting
the provisions of division (B)(1)(a) of section 4123.35 of the Revised Code
only if the following criteria are met: (i) An AEO will
demonstrate to the bureau that it is in compliance with all of the
following: (a) The duties of
organization regarding worksite employees set forth in section 4133.03 of the
Revised Code, as amplified in paragraph (D) of rule 4123-17-15 of the
Administrative Code; (b) The provisions of
section 4133.07 of the Revised Code; and (c) The provisions of
section 4133.10 of the Revised Code, as amplified by paragraphs (A)(3) and
(A)(4) of rule 4123-17-15.1 of the Administrative Code; (ii) A PEO will demonstrate to the bureau that it is in compliance
with all of the following: (a) The duties of
organization regarding shared employees set forth in section 4125.03 of the
Revised Code, as amplified by paragraphs (C) and (E) of rule 4123-17-15 of the
Administrative Code; (b) The provisions of
section 4125.05 of the Revised Code; and (c) The provisions of
section 4125.07 of the Revised Code, as amplified by paragraphs (A)(3) and
(A)(4) of rule 4123-17-15.1 of the Administrative Code. (iii) Client employer
wages. (a) For an AEO, all of
the client employer's wages for worksite employees are paid and reported
under the tax identification number of the client employer for federal tax
reporting purposes as stated in section 4133.03 of the Revised Code and
paragraph (D) of rule 4123-17-15 of the Administrative Code. (b) For a PEO, all of the client employer's wages are paid
and reported under the tax identification number of the PEO for federal tax
reporting purposes. (2) Any AEO or PEO
application for self-insured status will be referred to the self-insured review
panel pursuant to paragraph (F)(1) of rule 4123-19-14 of the Administrative
Code. (3) Any application to
add an AEO or a PEO to an existing self-insured entity will be referred to the
self-insured review panel pursuant to paragraph (F)(1) of rule 4123-19-14 of
the Administrative Code. (B) An AEO or PEO granted the privilege
of self-insured status must do all of the following: (1) If determined
necessary by the bureau, furnish security, in the amount, and in the form of a
letter of credit from a federally insured financial institution or other
security approved by the bureau, as provided by paragraphs (F), (G), and (H) of
rule 4123-19-03 of the Administrative Code. (a) The amount of security deemed necessary will be as determined
by the bureau. (b) The AEO or the PEO is not permitted to use an assurance
organization to meet its security obligations under this rule. (c) The bureau may, pursuant to paragraph (N) of rule 4123-19-03
of the Administrative Code, demand the AEO or the PEO to furnish additional
security within thirty days of receiving the notice issued pursuant to this
rule. (2) Submit to the bureau
every two years, or upon the bureau's request, an actuarial estimate of
the unpaid loss and loss adjustment expense liabilities of the AEO or the PEO
performed by an independent actuary with a fellow of the society of actuaries
or casualty actuary society credential. (3) Make contribution to
the self-insuring employers' guaranty fund as set forth in rule 4123-19-15
of the Administrative Code. For purposes of this rule, the premium as reported
on the total of the last two full six-month semi-annual payroll reports will
include the premium of the AEO or the PEO and all its client
employers. (4) Pay all assessments
levied upon self-insuring employers under rule 4123-17-32 of the Administrative
Code. (5) Reimburse the bureau
for disabled workers' relief fund payments on claims for which the AEO or
the PEO, or its client employers are employer of record, pursuant to paragraph
(B) of rule 4123-17-29 of the Administrative Code. (6) Make a quarterly
report to the bureau that details the active clients, all claims, and the claim
reserves for each claim of the AEO or the PEO. (C) For purposes of this rule, "paid
compensation" means all amounts paid by the AEO or the PEO and its client
employers for living maintenance benefits, all amounts for compensation paid
pursuant to sections 4121.63, 4121.67, 4123.56, 4123.57, 4123.58, 4123.59,
4123.60 and 4123.64 of the Revised Code, all amounts paid as wages in lieu of
such compensation, all amounts paid in lieu of such compensation under a
nonoccupational accident and sickness program fully funded by the AEO or the
PEO, or its client employers, and all amounts paid by an AEO or a PEO and its
client employers for a violation of a specific safety standard pursuant to
Section 35 of Article II, Ohio Constitution and section 4121.47 of the Revised
Code. Any reimbursement received from the surplus fund pursuant to section
4123.512 of the Revised Code by the AEO or the PEO, or its client employers for
any such payments or compensation paid is to be applied to reduce the amount of
paid compensation reported in the year in which the reimbursement is made. Any
amount recovered by the AEO or the PEO, or its client employers under section
4123.931 of the Revised Code and any amount that is determined not to have been
payable to a claimant in any final administrative or judicial proceeding will
be deducted, in the year collected, from the amount of paid compensation
reported. (1) For an AEO or a PEO
that is a self-insuring employer for which paragraph (I) of rule 4123-17-32 of
the Administrative Code is applicable, paid compensation includes any amounts
paid by the state insurance fund for claims directly attributable to the AEO or
the PEO and any client employers of the AEO or the PEO. In determining the
applicability of paragraph (I) of rule 4123-17-32 of the Administrative Code to
an AEO or a PEO, the bureau will use the date on which the AEO or the PEO was
added to the self-insured policy if such date is after the effective date of
the self-insured policy. (2) If a client employer
enters into a new AEO agreement with an AEO, or a new PEO agreement with a PEO,
that is self-insured risk which paragraph (I) of rule 4123-17-32 of the
Administrative Code is applicable, paid compensation includes any amounts paid
by the state insurance fund for claims directly attributable to that client
employer. (D) An AEO or a PEO granted the privilege
of self-insured status cannot: (1) Enter into AEO
agreements or PEO agreements to provide workers' compensation coverage
through the state insurance fund; or (2) Enter into a
partial-lease agreement. (E) An AEO or a PEO granted the privilege
of self-insured status shall do all of the following: (1) Prior to entering
into an AEO or a PEO agreement with a client employer, provide written notice
to the client employer that the submission of a lease termination notice form
by the AEO or the PEO to the administrator will require the AEO or the PEO to
report all information necessary for the administrator to develop a state fund
experience modification factor for each client employer involved in the lease
termination. (2) The self-insured AEO
or the self-insured PEO will submit all necessary information by the date set
by the administrator, and in a format determined by the administrator. This
information is to be submitted each year following the submission of a lease
termination notice form by the AEO or the PEO, for as many years as deemed
necessary by the administrator to develop a state fund experience modification
factor for each client employer involved in the lease termination. The
self-insured AEO or the self-insured PEO may have to submit additional
information to the administrator if the administrator determines that
additional information is needed to develop a state fund experience
modification factor for each client employer involved in the lease
termination. (3) A self-insured AEO or
a self-insured PEO that submits a lease termination notice form to the
administrator will provide the following information to the administrator
within thirty calendar days from the lease termination date for each client
employer involved in the lease termination: (a) The payroll of each client employer involved in the lease
termination, organized by classification code and policy year; (b) The medical and indemnity costs of each client employer
involved in the lease termination, organized by claim; and (c) Any other information the administrator may need to develop a
state fund experience modification factor for each client employer involved in
the lease termination. (4) The administrator may
revoke or refuse to renew the privilege of operating as a self-insuring
employer if an AEO or a PEO fails to provide the information requested by the
administrator under this rule. (F) The administrator will use the
information provided under this rule to develop a state fund experience
modification factor for each client employer involved in a lease termination
with a self-insured AEO or a self-insured PEO.
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Rule 4123-17-15.6 | Client employer information.
(A) An AEO or a PEO shall provide a list
of all of the following information to the client employer upon the written
request of the client employer: (1) All premiums and
payroll associated with that client employer; (2) All workers'
compensation claims, and the compensation and benefits paid, and reserves
established for each claim; and (3) Any other information
available to the AEO or the PEO from the bureau of workers' compensation
regarding that client employer. (B) The AEO or the PEO will provide the
information pursuant to paragraph (A) of this rule in writing to the requesting
client employer within forty-five days after receiving a written request from
the client employer. An AEO or a PEO has provided this information to the
client employer when: (1) The information is
received by the United States postal service; or (2) When the information
is personally delivered, in writing, directly to the client employer. For
purposes of this rule, a communication sent via electronic mail is personally
delivered at the time the communication was sent by the AEO or the PEO to a
valid electronic mail address for the client employer. (C) If an AEO or a PEO fails to comply
with a client employer's written request for information, the client
employer may submit a complaint to the bureau. (1) The bureau will
investigate the complaint to determine whether the AEO or the PEO has complied
with this rule. (2) If the bureau finds
the AEO or the PEO has failed to comply with this rule: (a) The bureau will provide the requested information to the
client employer. All administrative costs associated with investigation and
providing the information to the client employer will be assessed to the AEO or
the PEO; and (b) The bureau will provide the client employers of the AEO or
the PEO with notification of the failure to comply with the rule and advise the
client employers of their ability to request information under this
rule.
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Rule 4123-17-15.7 | Denial or revocation of AEO or PEO registration.
(A) The administrator of workers'
compensation shall deny or revoke the registration of an AEO, a PEO, or a PEO
reporting entity if it fails to comply with the provisions of rule 4123-17-15.4
of the Administrative Code. (B) The administrator may deny or revoke
the registration of an AEO, a PEO, or a PEO reporting entity upon finding that
the AEO, the PEO, or the PEO reporting entity has done any of the
following: (1) Obtained or attempted
to obtain registration through misrepresentation, misstatement of a material
fact, or fraud; (2) Misappropriated any
funds of a client employer; (3) Used fraudulent or
coercive practices to obtain or retain business or demonstrated financial
irresponsibility; (4) Failed to appear,
without reasonable cause or excuse, in response to a subpoena lawfully issued
by the administrator; or (5) Failed to comply with
the provisions of rules 4123-17-15 to 4123-17-15.5 of the Administrative
Code. (C) Concurrent with, or upon, the denial
or revocation of the registration of an AEO, a PEO, or a PEO reporting entity,
the administrator may deny or revoke the registration of any AEO, PEO, or PEO
reporting entity, that is majority owned or commonly controlled by the same
entity, parent, or controlling person. (D) An AEO or a PEO may appeal a denial or revocation of status
under this rule pursuant to the administrative hearing procedure set forth in
Chapter 119. of the Revised Code. (E) The administrator's decision to deny or revoke an
AEO's registration or a PEO's registration is stayed pending the
exhaustion of all administrative appeals by the AEO or the PEO. The bureau of
workers' compensation may notify client employers of the
administrator's decision to deny or revoke the registration of the AEO or
the PEO upon issuance of the administrator's decision, provided the bureau
also notifies client employers that the AEO or the PEO has the right to appeal
the administrator's decision. (F) Upon revocation of the registration of an AEO or a PEO, each
client employer associated with that AEO or PEO will file payroll reports and
pay workers' compensation premiums directly to the administrator on its
own behalf at a rate determined by the administrator based solely on the claims
experience of the client employer. (G) If pursuant to this rule the
administrator has denied or revoked the registration of an AEO or a PEO, or a
PEO reporting entity, then any of the following are ineligible to reapply as an
AEO or a PEO, or a PEO reporting entity for a period of two years from the date
of denial or revocation of the registration, and rescission of the PEO or PEO
reporting entity's status as a coemployer: (1) The former AEO, the
former PEO, or the former PEO reporting entity; or (2) Any applicant that is
majority owned, or commonly controlled, by the same entity, parent, or
controlling person of the former AEO, former PEO, or former PEO reporting
entity. (H) When an employer contacts the bureau to determine whether a
particular AEO or PEO is registered, if the administrator has denied or revoked
that AEO's registration or that PEO's registration, and if all
administrative appeals are not yet exhausted when the employer inquires, the
appropriate bureau personnel will inform the inquiring employer of the denial,
revocation, or rescission and the fact that the AEO or the PEO has the right to
appeal the administrator's decision.
Last updated July 14, 2023 at 1:20 PM
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Rule 4123-17-16 | Penalties: late payment and reporting.
(A) Definitions. As used in this rule: (1) "Annual payroll
report" means the report of the employer's actual payroll
expenditures submitted pursuant to section 4123.26 of the Revised Code for
private employers, section 4123.41 of the Revised Code for public employers,
and under rule 4123-17-14 of the Administrative Code. (2) "Payments"
means premiums, administrative costs, assessments, fines or monies otherwise
due to any fund administered by the bureau of workers' compensation,
including amounts due for retrospective rating. (B) Premium payments are due by the date
indicated on the invoice provided by the bureau pursuant to rule 4123-17-14 of
the Administrative Code. Other payments and reports pursuant to Chapter 4123.
of the Revised Code will be considered late if not received by the bureau on
the due date specified by statute or administrative rule implementing such
statute. If statute and rule do not specify a date for a payment, such payments
will be considered late if not received by the bureau by the due date on the
invoice issued by the bureau. (1) The administrator of
workers' compensation may establish a grace period during which a penalty
will not be assessed on late payments or late reporting. (2) If the bureau imposes
a lapse in coverage on an employer's policy for failure to make premium
payments within a grace period established by the administrator pursuant to
paragraph (B)(1) of this rule, such lapse will be effective from the first day
of the month which falls nearest the due date of the payment. (C) Penalties for late
payments. (1) If an employer fails
to pay premium and assessments when due, the administrator may assess a penalty
at the interest rate established by the state tax commissioner pursuant to
section 5703.47 of the Revised Code. (2) If an employer
recognized by the administrator as an alternate employer organization as
defined in section 4133.01 of the Revised Code, or a professional employer
organization, as defined in section 4125.01 of the Revised Code, fails to make
timely payment of premiums and assessments in accordance with rule 4123-17-14
of the Administrative Code, the administrator will revoke the alternate
employer organization's registration or the professional employer
organization's registration pursuant to rule 4123-17-15.7 of the
Administrative Code. (D) Penalties for failure to file or pay
amounts due under the annual payroll report. (1) If an employer fails
to file or pay amounts due under the annual payroll report within the grace
period established by the administrator pursuant to paragraph (B)(1) of this
rule: (a) The employer will be removed from all rating plans and
discount programs for the policy year immediately following the policy year to
which the annual payroll report pertains. Unless otherwise specified in the
rules of the program, such employer will be base-rated or experience-rated, as
determined by the expected losses of the employer pursuant to rules 4123-17-33
and 4123-17-34 of the Administrative Code, and (b) The premium and assessments due from the employer for the
policy year to which such report pertains will be calculated based on the
estimated payroll of the employer used in calculating estimated premium due,
increased by ten per cent. (2) The bureau will not
impose a lapse in coverage on an employer that is current with its estimated
premium payments for failure to file an annual payroll report for the preceding
policy year. (E) Certification of past-due amounts to
the attorney general. Pursuant to sections 131.02 and 4123.323 of the
Revised Code, the bureau will certify past due amounts to the attorney general
according to the following schedule: (1) Premium payments:
seventy-five days after the annual payroll report for the policy year to which
the premium payments pertain is due under rule 4123-17-14 of the Administrative
Code. (2) Penalties for failure
to make estimated premium payments: seventy-five days after the annual payroll
report for the policy year to which the premium payments pertain is due under
rule 4123-17-14 of the Administrative Code. (3) All other assessments
and penalties thereon: forty five days after the due date set forth in
paragraph (B) of this rule.
Last updated July 14, 2023 at 1:20 PM
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Rule 4123-17-17 | Auditing and adjustment of payroll reports.
(A) Every employer amenable to the
workers' compensation law shall keep, preserve, and maintain complete
records showing in detail all expenditures for payroll reportable to Ohio and
the division of such expenditures in the various divisions and classification
codes of the employer's business. If an employer elects under section
4123.292 of the Revised Code to obtain other-states' coverage, the
employer shall also keep records of all payroll reported to the
other-states' insurer for work performed outside of Ohio. Both types of
payroll records shall be preserved for at least five years after the respective
time of the transaction upon which such records are based. (B) All books, records, papers, and
documents reflecting upon the amount and the classification codes of the
payroll expenditures of an employer shall be kept available for inspection at
any time by the bureau of workers' compensation or any of its assistants,
agents, representatives, or employees. If any employer fails to keep, preserve,
and maintain such records and other information reflecting upon payroll
expenditures, or fails to make such records and information available for
inspection, or fails to furnish the bureau or any of its assistants, agents,
representatives, or employees, full and complete information in reference to
expenditures for payroll when such information is requested, the bureau may
determine upon such information as is available the amount of premium due from
the employer, and the bureau's findings shall constitute prima facie
evidence of the amount of premium due from the employer. (C) The bureau shall have the right at
all times to inspect, examine, or audit any or all books, records, papers,
documents, and payroll of an employer for the purpose of verifying the
correctness of reports made by employers as required by law. (1) The bureau shall
have the right to make adjustments as to classification codes, allocation of
wage expenditures to classification codes, amount of wage expenditures, premium
rates, or amount of premium. (2) Except as provided in
rules 4123-17-14 and 4123-17-28 of the Administrative Code, adjustments in an
employer's account which result in changes to the amount of premium due
from an employer for a policy year shall be limited to the annual or adjustment
periods ending within twenty-four months immediately prior to: (a) The date when such error affecting the reports and the
premium are brought to the attention of the bureau by an employer through
written application for adjustment, or (b) The date that the bureau provides written notice to the
employer of the bureau's intent to inspect, examine, or audit the
employer's records. (D) Where the bureau has assigned two or more classification
codes for an employer's operations, the employer shall keep an appropriate
record showing a correct and verifiable segregation of all payroll into such
classification codes. If it is found that the employer has failed to keep such
record, the part of the payroll which cannot be reasonably determined by the
bureau as belonging to any other classification codes shall be placed by the
bureau under the assigned classification code having the highest rate, and the
employer will be assessed premium accordingly.
Last updated July 2, 2024 at 11:33 AM
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Rule 4123-17-19 | Employer contribution to the marine industry fund.
The administrator of workers' compensation,
with the advice and consent of the bureau of workers' compensation board
of directors, has authority to establish contributions made to the marine
industry fund by employers pursuant to sections 4121.121 and 4131.14 of the
Revised Code. The administrator hereby sets the premium rates per one hundred
dollar unit of payroll to be effective July 1, 2024 as indicated in the
appendix to this rule.
View Appendix
Last updated July 2, 2024 at 11:33 AM
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Rule 4123-17-20 | Employer contribution to the coal-workers pneumoconiosis fund.
The administrator of workers' compensation,
with the advice and consent of the workers' compensation board of
directors, has authority to establish contributions made to the coal-workers
pneumoconiosis fund by employers pursuant to sections 4121.121 and 4131.04 of
the Revised Code. The administrator hereby sets the premium rates per one
hundred dollar unit of payroll, as indicated in the appendix to this
rule.
View Appendix
Last updated July 2, 2024 at 11:33 AM
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Rule 4123-17-22 | Traveling expense.
Where employees who travel in the course of their
employment are required to pay their travel expenses out of their remuneration,
the employer, in submitting payroll reports of the earnings of such employees,
may deduct from the remuneration an amount representing actual travel expenses,
not exceeding an amount equal to one-third of the remuneration, provided the
employer maintains complete detailed records documenting the travel
expenses.
Last updated July 2, 2024 at 11:34 AM
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Rule 4123-17-23 | Duties outside the state.
(A) The entire remuneration of employees whose employment involves activities both within and outside the borders of Ohio, and where the supervising office of the employer is located in Ohio, shall be included in the payroll report. However, if the employer elects to obtain other-states' coverage under section 4123.292 of the Revised Code directly through an other-states' insurer the employer shall report payroll as set forth in paragraph (I) of rule 4123-17-14 of the Administrative Code. (B) The remuneration of employees of other than Ohio employers, who have entered into a contract of employment outside of Ohio to perform transitory services in interstate commerce only, both within and outside of the boundaries of Ohio, shall not be included in the payroll report. (C) The bureau of workers' compensation respects the extraterritorial right of the workers' compensation insurance coverage of an out-of-state employer for its regular employees who are residents of a state other than Ohio while performing work in the state of Ohio for a temporary period not to exceed ninety days. While temporarily within this state the rights of the employee and the employee's dependents under the laws of the other state are the exclusive remedy against the employer on account of injury, disease or death pursuant to division (H)(5) of section 4123.54 of the Revised Code and remuneration for such employees shall not be included in the payroll report. However, if a temporary period exceeds ninety consecutive days the out-of-state employer shall include in the payroll report the remuneration for work the employees perform in Ohio beyond that ninety day period. (D) Employees hired to work specifically in Ohio must be reported for workers' compensation insurance under the Ohio fund, regardless of where the contracts of hire were entered. (E) When an Ohio employer hires an employee to perform transitory work outside of Ohio and the employee is not covered by the workers' compensation laws of the state of residence for claims arising outside that state because the contract of employment was not entered into in the state of residence, the employer and his employee, if the employment relationship maintains sufficient contacts with the Ohio location to be covered by Ohio workers' compensation law, may mutually agree to be bound by the workers' compensation laws of the state of Ohio by executing form C-110, or mutually agree to be bound by the workers' compensation law of some other state by executing form C-112, such forms to be obtained from and filed with the bureau of workers' compensation within ten days after execution.
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Rule 4123-17-24 | Other states coverage policy.
(A) Definitions. For purposes of this rule: (1) "Other states
coverage policy (OSCP)" is the policy offered by the bureau of
workers' compensation under section 4123.292 of the Revised Code to
provide optional coverage to eligible Ohio employers for workers'
compensation exposures in states other than Ohio. (2) "Contracting
carrier" means the insurer providing other states coverage through the
bureau. (3) "Limited other
states coverage" is insurance coverage for eligible Ohio employers who
have employment relationships localized in Ohio but whose employees have
incidental exposures in jurisdictions outside Ohio. (4) "Other states
coverage" is insurance coverage for eligible Ohio employers who have
regular or full time employment exposure in jurisdictions outside of
Ohio. (B) OSCP application. (1) An employer wishing
to obtain an OSCP will complete and submit an application to the bureau, and if
the employer has an existing other states policy, the employer will provide any
declaration page or certificate of coverage of any existing other states
policy. Declaration pages or certificates of coverage for previous policy years
may be requested as deemed appropriate by the bureau. (2) The bureau will only
process a complete application, and no application will be deemed complete
until all information requested by the bureau in connection with the
application is supplied. (3) The bureau may make
reasonable inspections of an applicant's place of business and of any
records applicable to ensuring proper classification code assignment to the
policy or to review loss prevention or safety programs prior to reaching a
decision regarding an application for coverage. The bureau will provide
advanced notice to the employer of any such inspection. (4) Only employers
meeting the following criteria are eligible for an OSCP: (a) The employer is headquartered, primarily located, or has a
history of predominant business operations in Ohio; (b) The employer has an active state fund workers'
compensation policy with the bureau; (c) The employer cannot have cumulative lapses in workers'
compensation coverage in excess of forty days within the prior twelve months;
and (d) The employer's Ohio policy cannot have past due balances
at the time of application or renewal. (5) The bureau will
establish underwriting guidelines for determining whether to approve or deny an
application. In addition to the criteria set forth in paragraph (B)(4) of this
rule, the bureau's underwriting guidelines may consider the
following: (a) The applicant's history with the bureau, including
compliance with applicable workers' compensation laws and rules, payment
of premiums and assessments, claims history, safety record, and experience
ratings; and (b) The applicant's history with coverage through any
insurer for worker's compensation in any jurisdiction other than Ohio,
including premium payment records, claims history, safety record, and
experience modification history, if any. (6) The following
employers are not eligible for an OSCP: (a) Self-insuring employers providing compensation and benefits
pursuant to section 4123.35 of the Revised Code; (b) Temporary employment agencies or other staffing
entities; (c) Professional employer organizations as defined in Chapter
4125. of the Revised Code, and each of the professional employer
organization's client employers; and (d) Alternate employer organizations as defined in Chapter 4133.
of the Revised Code, and each of the alternate employer organization's
client employers. (7) The bureau has the
authority, in the administrator of workers' compensation's
discretion, to approve or deny an OSCP application. The decision of the
administrator is final. (a) In the event that an employer is denied an OSCP, the bureau
will provide written documentation of the reason for denial; and (b) An employer may reapply once the reason for denial is
remedied. (C) Premium payment and policy
issuance. (1) An employer whose
application for coverage is approved by the bureau will receive a quote for the
cost of coverage. If the employer elects to obtain coverage, the bureau will
issue an OSCP only after the following: (a) The bureau's receipt of premium payment for the OSCP;
and (b) If an employer has previously had a policy covering its
exposure out of state, submission of proof of cancellation of the existing
policy or the expiration date of the previous policy. (2) Coverage under an
OSCP will be effective when the OSCP is issued. (a) The bureau will issue the policy within five business days of
receipt of premium if cancellation notices and other information necessary from
the policyholder to issue the OSCP are provided; and (b) Coverage becomes effective per the effective date of the
policy as issued by the contracting carrier. (D) OSCP renewal. (1) An employer wishing
to renew its OSCP may complete the renewal application, which will be provided
by the bureau. The bureau will establish a deadline for the renewal
application. (2) If the renewal
application is not completed by an employer, the renewal quote will be based
upon the previous policy year's information. (3) The bureau will non-renew an
employer's OSCP if the employer is not eligible for coverage under this
rule at the time of renewal. (4) The premium for the OSCP renewal
period has to be received by the bureau prior to the expiration of the previous
policy period. (5) If the renewal premium is not
received by the expiration of the previous policy, notice of the policy
cancellation for non-payment will be sent to the insured employer under the
laws and procedures of the jurisdiction from which coverage is provided. If the
bureau received an insured employer payment late, the bureau may, in the
administrator's discretion, reinstate the coverage or may require the
employer to submit a new OSCP application. (6) The bureau has the authority, in the
administrator's discretion, to non-renew an employer's OSCP. The
decision of the administrator is final. (E) Audits and inspection. (1) An OSCP will expire
per the terms of the policy issued by the contracting carrier, unless otherwise
canceled as set forth in this rule. (2) An employer with an
OSCP will have to complete a final audit at the conclusion of each OSCP term
and upon cancellation pursuant to the terms of the OCSP. (3) In the event of a
claim filed in a jurisdiction outside Ohio, the bureau may make reasonable
inspection of an applicant's place of business and of any records
necessary to secure information for the purpose of determining compensability
of such claim. (4) Any audit will be
conducted in accordance with rule 4123-17-17 of Administrative
Code. (5) Adjustments to
premium may be made based on the results of any audit. The employer will have
to pay any balance due within the timelines established by the
bureau. (6) If the employer
refuses or otherwise fails to cooperate with an audit by the bureau, the bureau
may estimate the insured's payroll. Any estimated payroll pursuant to this
section may result in an adjustment of premium. (7) In the event of an
audit dispute, the bureau will make reasonable efforts with the insured to
resolve the disputed findings. (8) If resolution between
the bureau and the insured cannot be made, the audit findings can be appealed
to the extent allowable under the laws and procedures of the jurisdiction for
which coverage is being provided. (F) Policy cancellation. (1) An OSCP may be
canceled for any of the following reasons: (a) At the written request of the employer; (b) Employer misrepresentation regarding its
operations; (c) Fraud committed by, or for the benefit of, the
employer; (d) Employer failure to complete a final audit or pay any amounts
due as a result of a final audit; (e) Any past due balance owed for the OSCP; (f) Refusal on the part of the insured to permit reasonable
audits or inspections; or (g) Any reason the contracting carrier is authorized to cancel a
policy, as established by the laws of the jurisdiction for which coverage is
being provided. (2) An OSCP may be
canceled under the laws and procedures of the jurisdiction for which coverage
is being provided. (a) Notice of cancellation will be provided in accordance with
the laws and procedures of the jurisdiction for which coverage is being
provided; and (b) A policy cancellation can be appealed to the extent allowable
under the laws and the procedures of the jurisdiction for which coverage is
being provided. (G) Assignment of payroll. (1) If an employer is
issued an OSCP for limited other states coverage, the bureau may assign payroll
in the event of a claim to the jurisdiction where the claim is filed. The
payroll amount will not exceed one hundred per cent of the injured
workers' wages for one year. (2) The assignment of
payroll may result in a premium adjustment for the OSCP. The employer will have
to pay any balance due within the timelines established by the
bureau.
Last updated July 14, 2023 at 1:20 PM
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Rule 4123-17-25 | Military and naval service.
Remuneration given by employers to employees while
engaged in active military or naval service of the United States of America
shall be excluded from the payroll reports which the employers are required to
submit to the bureau of workers' compensation for premium purposes unless
the employees are also required to render services to the employers while
engaged in active military or naval service.
Last updated July 2, 2024 at 11:34 AM
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Rule 4123-17-26 | Minimum annual administrative charge.
The administrator of workers' compensation,
with the advice and consent of the bureau of workers' compensation board
of directors, has authority to calculate contributions by employers pursuant to
sections 4121.121, 4123.341, and 4123.342 of the Revised Code. The
administrator hereby establishes that in cases where an employer reports no
payroll for a payroll reporting period the employer shall pay a minimum annual
administrative charge at a rate of one hundred twenty dollars annually. In
cases where an employer reports payroll resulting in a premium of less than the
minimum administrative charge, the employer shall pay the one hundred twenty
dollar minimum annual administrative charge.
Last updated July 2, 2024 at 11:34 AM
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Rule 4123-17-27 | Protest of an employer's experience.
A protest of an employer's experience is to be
submitted in writing, which includes by e-mail. Only the employer or a
representative with a permanent authorization from that employer can file a
protest. A protest will be considered on its merits only if the protest is
timely received by the bureau of workers' compensation. A protest is
timely filed if the date of receipt by the bureau is within two years of the
initial effective date of the basic rate(s) on which the protested experience
is predicated.
Last updated July 14, 2023 at 1:20 PM
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Rule 4123-17-28 | Correction of inaccuracies affecting employer's premium rates.
(A) Whenever the bureau of workers'
compensation detects an inaccuracy in the recording or processing of data,
records, payroll, claims, or other pertinent items affecting the
employer's status, experience modification, or premium, the bureau will
correct such discrepancy . This correction will be accomplished regardless of
whether this entails increasing or decreasing the employer's experience
modification or premium rate. The employer or its representative will be
advised of any correction and the effect thereof made under the authority of
this rule. (B) Any correction made pursuant to the
provisions of paragraph (A) of this rule will be applied to the current rating
year, the rating year immediately preceding the current rating year, and to all
rating years subsequent to the current rating year as of the date on which the
error was discovered by the bureau or reported to the bureau, whichever date is
earlier, except in matters involving disability relief and service-connected
disabilities and cases covered by rules 4123-17-02, 4123-17-17, and 4123-19-03
of the Administrative Code. In cases where two or more employers may be
affected by such correction, the same period of adjustment will be applied to
all affected employers. (C) Notwithstanding paragraphs (A) and
(B) of this rule or paragraphs (C) and (D) of rule 4123-17-17 of the
Administrative Code, the bureau may adjust the employer's account or
experience for a period in excess of twenty-four months immediately prior to
the beginning of the current payroll reporting period for the following
circumstances: (1) If the bureau
determines that the employer misrepresented payroll or failed to submit payroll
for any period, the bureau may adjust the employer's account or
experience resulting in an increase in any amount of premium above the amount
of contributions made by the employer to the fund for the entire period the
employer misrepresented payroll or the entire period the employer failed to
submit payroll, regardless of when the misrepresentation of payroll or failure
to submit payroll occurred. (2) If the bureau
excluded any claim costs from the employer's account or experience
because the costs were subject to an appeal to court under section 4123.512 of
the Revised Code and by a final adjudication it is determined that the claim
costs are to be charged to the claim, the bureau may adjust the
employer's account or experience resulting in an increase in any amount
of premium above the amount of contributions made by the employer to the fund
for the entire period affected by the addition of the claim costs to the
employer's account or experience.
Last updated April 3, 2024 at 1:28 PM
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Rule 4123-17-29 | Disabled workers' relief fund; employers' assessments and self-insurers' payments.
(A) State fund employers. (1) In order to make
disabled workers' relief fund (DWRF) payments to claimants having dates of
injury or disability prior to January 1, 1987, assessments shall be levied in
the following manner for so long as payments to such claimants are
required: (a) Private state fund employers: zero cents per
one-hundred-dollar unit of payroll, effective July 1, 2016; (b) Public employer taxing districts: zero cents per
one-hundred-dollar unit of payroll, effective January 1, 2016; (c) Public employer state agency: one cent per one-hundred-dollar
unit of payroll, effective July 1, 2022. These assessments shall be billed at the same
time state insurance fund premiums are billed and payments shall be credited to
the DWRF. (2) In order to make DWRF
payments to claimants having dates of injury or disability on or after January
1, 1987, assessments shall be levied in the following manner for so long as
payments to such claimants are required: (a) Private state fund employers: zero per cent of premium,
computed at basic rate, effective July 1, 2015; (b) Public employer taxing districts: zero per cent of premium,
computed at basic rate, effective January 1, 2015; (c) Public employer state agency: zero per cent of premium,
computed at basic rate, effective July 1, 2015; These assessments shall be billed at the same
time state insurance fund premiums are billed and payments shall be credited to
the DWRF. (B) Self-insuring employers. (1) Each self-insuring
employer shall reimburse the bureau for DWRF payments made in claims in which
it is the employer of record, without regard to the date the employer was
granted the privilege to pay compensation directly, for all DWRF payments made
on or after August 22, 1986. (2) Self-insuring
employers shall be billed on a semi-annual basis for the DWRF payments made
pursuant to this rule. (3) Upon default and a
finding of noncompliance by the administrator of workers' compensation,
reimbursement shall be made from the self-insuring employers' guaranty
fund.
Last updated March 22, 2024 at 11:13 AM
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Rule 4123-17-30 | Payroll limitations for corporate officers, sole proprietors, an individual incorporated as a corporation with no employees, members of partnerships, and family farm corporations.
The administrator of workers' compensation,
with the advice and consent of the bureau of workers' compensation board
of directors, has authority to establish the total payroll reportable by
employers pursuant to sections 4121.12 and 4123.29 of the Revised Code. The
administrator hereby sets the total payroll limitations for executive officers
of corporations, sole proprietors, members of partnerships, an individual
incorporated as a corporation with no employees, and officers of family farm
corporations as provided in this rule. (A) For executive officers of
corporations, the payroll reportable shall be the actual payroll received by
the executive officers of the corporation, but not less than an average weekly
wage equal to fifty per cent of the statewide average weekly wage as defined in
division (C) of section 4123.62 of the Revised Code, but shall not exceed an
average weekly wage equal to one hundred fifty per cent of the statewide
average weekly wage as defined in division (C) of section 4123.62 of the
Revised Code. The minimum reportable payroll for executive officers of
corporations shall apply only to active executive officers of corporations. As
used in this rule, "active executive officer" means an officer
engaged in the decision making and day to day operations of the
corporation. (B) For sole proprietors, members of
partnerships, an individual incorporated as a corporation with no employees,
and officers of family farm corporations who elect to include themselves as
employees under the workers' compensation act and comply with rule
4123-17-07 of the Administrative Code, the payroll reportable shall be the
actual payroll received by the sole proprietor, member of partnership, an
individual incorporated as a corporation, and officer of a family farm
corporation, but not less than an average weekly wage equal to fifty per cent
of the statewide average weekly wage as defined in division (C) of section
4123.62 of the Revised Code, nor more than an average weekly wage equal to one
hundred fifty per cent of the statewide average weekly wage as defined in
division (C) of section 4123.62 of the Revised Code.
Last updated July 2, 2024 at 11:35 AM
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Rule 4123-17-32 | Self-insuring employer assessment based upon paid compensation.
The administrator of workers' compensation,
with the advice and consent of the bureau of workers' compensation board
of directors, has authority to determine and levy against self-insuring
employers amounts to be paid to support the safety and hygiene fund, the
administrative cost fund, the portion of the surplus fund that is mandatory and
the portion of the surplus fund used for claims reimbursement for self-insuring
employers under division (H) of section 4123.512 of the Revised Code, pursuant
to sections 4121.12, 4121.37, 4121.66, 4123.34, 4123.342, and 4123.35 of the
Revised Code in conjunction with rule 4123-19-01 of the Administrative Code.
The administrator hereby sets the self-insuring employer assessments to be
effective July 1, 2024, for the period July 1, 2024, to June 30, 2025, payable
in two equal remittances by February 28, 2025, and August 31, 2025, as
follows: (A) The assessments shall be on the basis
of the paid compensation attributable to the individual self-insuring employer
as a fraction of the total amount of paid compensation for the previous
calendar year attributable to all amenable self-insuring
employers. (B) Paid compensation means all amounts
paid by a self-insuring employer for living maintenance benefits, all amounts
for compensation paid pursuant to sections 4121.63, 4121.67, 4123.56, 4123.57,
4123.58, 4123.59, 4123.60 and 4123.64 of the Revised Code, all amounts paid as
wages in lieu of such compensation, all amounts paid in lieu of such
compensation under a non-occupational accident and sickness program fully
funded by the self-insuring employer, and all amounts paid by a self-insuring
employer for a violation of a specific safety standard pursuant to section 35
of article II, Ohio Constitution and section 4121.47 of the Revised Code. Any
reimbursement received from the surplus fund pursuant to section 4123.512 of
the Revised Code by a self-insuring employer for any such payments or
compensation paid shall be applied to reduce the amount of paid compensation
reported in the year in which the reimbursement is made. Any amount recovered
by the self-insuring employer under section 4123.931 of the Revised Code and
any amount that is determined not to have been payable to a claimant in any
final administrative or judicial proceeding shall be deducted, in the year
collected, from the amount of paid compensation reported. (C) The assessments shall be computed for
all self-insuring employers operating in Ohio by multiplying the following
rates by the individual self-insuring employer's paid compensation for
calendar year 2023: (1) Safety and hygiene
fund: 0.0031. (2) Administrative cost
fund, BWC: 0.0795. (3) Administrative cost
fund, IC: 0.1352. (4) Surplus fund
(mandatory): 0.0590. (D) The assessment to fund the portion of
the surplus fund that is used for claims reimbursement for all self-insuring
employers operating in Ohio who have not made an election to opt out of the
right to reimbursement under the provisions of division (H) of section 4123.512
of the Revised Code shall be computed by multiplying the following rate by the
individual self-insuring employer's paid compensation for calendar year
2023: Surplus fund (disallowed claims reimbursement):
0.0060. (E) An employer who no longer is a
self-insuring employer in Ohio or who no longer is operating in this state
shall continue to pay assessments for administrative costs and for the portion
of the surplus fund that is mandatory. The assessments shall be computed by
such employer by multiplying the following rates by the individual
employer's paid compensation for calendar year 2023: (1) Administrative cost
fund, BWC: 0.0795. (2) Administrative cost
fund, IC: 0.1352. (3) Surplus fund
(mandatory): 0.0590. (F) If the paid compensation for a
self-insuring employer for calendar year 2023 is less than ten thousand eight
hundred thirty-eight dollars and fifteen cents, the minimum assessments shall
be paid as follows: (1) Safety and hygiene
fund: $33.60. (2) Administrative cost
fund, BWC: $861.63. (3) Administrative cost
fund, IC: $1,465.32. (4) Surplus fund
(mandatory): $639.45. An employer who no longer is a self-insuring
employer in Ohio or no longer is operating in this state and who has less than
ten thousand eight hundred thirty-eight dollars and fifteen cents in paid
compensation for calendar year 2023 shall have a reduced minimum assessment.
The minimum assessment shall be ninety per cent of the above minimum
assessments in this paragraph in the year after becoming inactive, eighty per
cent in the following year, seventy per cent in the following year, and so
forth, being reduced ten per cent each year, until the assessment is phased out
over ten years. The bureau may, in its discretion, permit an employer to pay
its total assessment obligation under this paragraph in a single payment,
discounted for present value at a rate determined by the bureau. An employer
electing to pay its assessment obligations in a single payment must continue to
administer self-insured claims and pay compensation and benefits pursuant to
paragraph (C) of rule 4123-19-05 of the Administrative Code. (G) If an individual self-insuring
employer has become self-insured in the last five years (on or after July 1,
2019) paid compensation shall be as defined in paragraph (B) of this rule and
shall additionally include compensation paid in calendar year 2023 by the state
insurance fund for claim costs directly attributable to the employer prior to
becoming self-insured. (H) The initial assessment to a
self-insuring employer in its first calendar year of operation as a
self-insuring employer shall be prorated to cover the time period that
self-insurance was in effect, but shall not be less than the minimum assessment
for a self-insuring employer as provided in paragraph (F) of this
rule. (I) Pursuant to rule 4123-19-15 of the
Administrative Code, the following assessment, to be billed and payable in two
equal remittances by February 28, 2025, and August 31, 2025, shall be computed
for all self-insuring employers by multiplying the following rate by the
individual self-insuring employer's paid compensation for calendar year
2023: Self-insuring employer guaranty fund:
0.0765. (J) All self-insuring employers must pay
assessments under this rule using the online payment offering on the
bureau's website. The bureau may waive the online payment requirement with
written justification and supporting documentation, satisfactory to the bureau,
from the self-insuring employer and filed with the bureau by the payment due
date on the assessment remittance. The written justification and supporting
documentation must demonstrate the self-insuring employer's inability to
remit payment through the online payment offering on the bureau's
website. (K) If an employer fails to pay the
assessment when due, the administrator may add a late fee penalty of not more
than five hundred dollars to the assessment plus an additional penalty amount
as follows: (1) For an assessment
from sixty-one to ninety days past due, the prime interest rate, multiplied by
the assessment due; (2) For assessment from
ninety-one to one hundred twenty days past due, the prime interest rate plus
two per cent, multiplied by the assessment due; (3) For an assessment
from one hundred twenty-one to one hundred fifty days past due, the prime
interest rate plus four per cent, multiplied by the assessment
due; (4) For an assessment
from one hundred fifty-one to one hundred eighty days past due, the prime
interest rate plus six per cent, multiplied by the assessment due; (5) For an assessment
from one hundred eighty-one to two hundred ten days past due, the prime
interest rate plus eight per cent, multiplied by the assessment
due; (6) For each additional
thirty-day period or portion thereof that an assessment remains past due after
it has remained past due for more than two hundred ten days, the prime interest
rate plus eight per cent, multiplied by the assessment due. For purposes of this paragraph, "prime
interest rate" means the average bank prime rate, and the administrator
shall determine the prime interest rate in the same manner as a county auditor
determines the average bank prime rate under section 929.02 of the Revised
Code.
Last updated July 2, 2024 at 11:35 AM
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Rule 4123-17-33 | Public employer taxing district industry group and limited loss ratio tables.
Effective:
January 1, 2024
The administrator of workers' compensation,
with the advice and consent of the bureau of workers' compensation board
of directors, has authority to calculate contributions made to the state
insurance fund by employers pursuant to section 4121.121 of the Revised Code.
The administrator hereby sets the industry group assignments and limited loss
ratio tables parts A and B to be effective January 1, 2024 applicable to the
payroll reporting period January 1, 2024 through December 31, 2024 for public
employer taxing districts as indicated in appendices A and B to this
rule.
View AppendixView Appendix
Last updated October 9, 2024 at 4:45 PM
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Rule 4123-17-33.1 | Public employer taxing districts experience rating table.
Effective:
January 1, 2021
The administrator of workers' compensation,
with the advice and consent of the bureau of workers' compensation board
of directors, has authority to calculate contributions made to the state
insurance fund by employers pursuant to section 4121.121 of the Revised Code.
The administrator hereby sets the public employer taxing district experience
rating table part A, "credibility and maximum value of a loss," to be
effective January 1, 2021, for public employer taxing districts as indicated in
appendix A to this rule.
View Appendix
Last updated October 9, 2024 at 4:45 PM
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Rule 4123-17-34 | Public employer taxing districts contribution to the state insurance fund.
Effective:
January 1, 2024
The administrator of workers' compensation,
with the advice and consent of the bureau of workers' compensation board
of directors, has authority to approve contributions made to the state
insurance fund by employers pursuant to section 4121.121 of the Revised Code.
The administrator hereby sets base rates and expected loss rates to be
effective January 1, 2024 applicable to the payroll reporting period January 1,
2024 through December 31, 2024 for public employer taxing districts as
indicated in the appendix to this rule.
View AppendixView Appendix
Last updated October 9, 2024 at 4:45 PM
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Rule 4123-17-35 | Public employer state agency contribution to the state insurance fund.
The administrator of workers' compensation,
with the advice and consent of the bureau of workers' compensation board
of directors, has authority to approve contributions made to the state
insurance fund by employers pursuant to sections 4121.121, 4123.39, and 4123.40
of the Revised Code. For the purpose of collecting amounts to cover the payment
of costs to the managed care organizations (MCO) that manage the claims of
state agencies, including state universities and university hospitals, the
administrator has authority to include that expected cost in establishing the
combined contribution rate of the state insurance fund. The administrator
hereby sets the combined contribution rates per one hundred dollar unit of
payroll to be effective July 1, 2024, applicable to the payroll reporting
period July 1, 2024, through June 30, 2025, for public employer state (PES)
agencies, including state universities and university hospitals, as indicated
in the appendix to this rule.
View Appendix
Last updated July 2, 2024 at 11:35 AM
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Rule 4123-17-35.1 | Public employer state agency lump sum settlement program.
(A) Public employer state (PES) agency that is not
currently participating in a settlement payment program may participate in the
lump sum settlement (LSS) direct reimbursement rating and payment program. A
PES agency participating in this program will have the LSS payments excluded
from the bureau's rate calculation process. (1) Requirements. (a) A PES agency shall make a three-year minimum commitment
to the LSS direct reimbursement payment and rating program. (b) The earliest beginning date of the LSS program is July
1, 2004. (c) A PES agency shall notify the bureau of its desire to
participate in the LSS direct reimbursement and payment program before the
first day of the second month following any quarter ending date to be effective
the following quarter. For example, if the PES agency chose to participate in
the LSS program beginning April 1, 2016, the request must be submitted before
February 1, 2016. The notification shall be made on the form provided by the
bureau and signed by the PES agency's designee. (d) A PES agency currently participating in a settlement
program is not eligible to participate in the LSS direct reimbursement payment
and rating program. (2) LSS rate calculation. (a) All LSS payments will be treated the same whether the
result of a court-ordered settlement, an agency-negotiated settlement or any
other type of settlement. (b) Once a PES agency begins participating in the LSS
direct reimbursement and rating program, all LSS payments will be excluded from
the losses used to calculate the contribution rate for future policy
years. (c) When an agency terminates a LSS direct reimbursement
and rating program, the contribution rate will include all LSS payments that
were made by the bureau and not reimbursed by the PES agency. (3) LSS reimburseemnt
payments. (a) A LSS will be billed in the next month following the
date the LSS warrant was cashed. (b) The bureau will bill a structured settlement to the PES
agency as the warrant is cashed. (c) The PES agency shall pay the LSS monthly bill within
thirty days of the billing date. (d) If the PES agency fails to pay a LSS monthly bill
within thirty days, the bureau will remove the PES agency from the LSS direct
reimbursement rating and payment program and the bureau will include the
outstanding LSS payments in the rate calculation. (e) A PES agency may settle permanent total disability
(PTD) and death benefit claims in which the present value was previously used
in the rate calculations. PES agencies will not be billed for the
settlement costs of PTD and death benefit claims in which the present value of
both medical and indemnity costs was included in contribution rate
calculations. These claims would likely be death benefit claims awarded before
January 1, 2001 and PTD claims awarded before January 1, 1996. For PTD claims awarded between January 1,
1996 and December 31, 2000 and where the present value of the future indemnity
cost was previously included in the development of the agency's
contribution rates, the bureau will include only the medical portion of the
settlement amount in the quarterly billings. (f) A PES agency shall file any dispute in writing,
specifying the agency's objections to the billing, with the bureau's
direct billing department. The filing of a dispute does not relieve or suspend
the agency's obligation to pay the obligation. Questions concerning the
rate calculations should be directed to the bureau's actuarial
division. (4) Change in status. (a) When a PES agency combines with another PES agency, the
succeeding agency's participation in this program will not be
affected. (b) A PES agency that is participating in a program and
transfers a portion of its operations to another agency shall continue to
participate in the program. Participation in this program by the agency to
which the operations were transferred will not be affected. (c) Where a PES agency participating in a LSS direct
reimbursement rating and payment program becomes self-insured, the bureau will
calculate a buyout and any obligations owed by the PES agency under the program
will be included in the buyout. (B) Terminating a LSS program. (1) A PES agency may
request, in writing, to terminate a LSS program after the three year minimum
commitment period has been completed. The agency's participation in the
program will automatically be renewed for another three years unless the
written request is submitted. (2) A PES agency shall
submit a request to terminate a program before the first day of the second
month of the quarter the three year commitment ends. For example, if the PES
agency started participating in the LSS program or its participation was
renewed for the policy year beginning July 1, 2013, the request must be
submitted before May 1, 2016. (3) Once a PES agency
terminates a LSS program, the agency is no longer eligible to participate in
this program.
Last updated June 7, 2024 at 1:46 PM
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Rule 4123-17-36 | Administrative cost contribution.
(A) The administrator of workers'
compensation, with the advice and consent of the bureau of workers'
compensation board of directors, has authority to calculate contributions for
administrative costs attributable to the activities of the industrial
commission, the bureau of workers' compensation board of directors, and
the bureau of workers' compensation pursuant to sections 4121.121,
4123.341, and 4123.342 of the Revised Code. The administrator hereby sets
administrative cost contributions for public employer state agencies as
indicated in paragraph (D) of this rule for the bureau of workers'
compensation and the bureau of workers' compensation board of directors.
Based upon the information provided to the administrator by the industrial
commission pursuant to section 4123.342 of the Revised Code, the administrator,
with the approval of the chairperson of the industrial commission, hereby sets
administrative cost contributions for public employer state agencies as
indicated in paragraph (E) of this rule for the industrial
commission. (B) The administrative cost contributions
due for each employer, except for self-insuring employers, are set in
accordance with section 4123.341 of the Revised Code. (C) Whenever administrative cost
contributions established under this rule and rule 4123-17-32 of the
Administrative Code prove inadequate or excessive, the same may be adjusted at
any time during the biennial period. (D) Administrative cost contributions for
the bureau of workers' compensation and bureau of workers'
compensation board of directors for public employer state agencies are 17.85
per cent of premium effective July 1, 2024. (E) Administrative cost contributions for
the industrial commission for public employer state agencies are 8.03 per cent
of premium effective July 1, 2024.
Last updated July 2, 2024 at 11:36 AM
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Rule 4123-17-37 | Employer contribution to the safety and hygiene fund.
The administrator of workers' compensation,
with the advice and consent of the bureau of workers' compensation board
of directors, has authority to approve contributions to the state insurance
fund by employers pursuant to sections 4121.121 and 4121.37 of the Revised
Code. The administrator hereby establishes the amount of premium to be set
aside to fund the division of safety and hygiene to be one per cent of paid
premium for public employer taxing districts effective January 1, 2025, one per
cent of paid premium for public employer state agencies effective July 1, 2024,
and one per cent of paid premium for private employers effective July 1,
2024.
Last updated July 2, 2024 at 11:36 AM
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Rule 4123-17-40 | Self-insured buy-out factors.
The administrator of workers' compensation,
with the advice and consent of the bureau of workers' compensation board
of directors, has authority to establish factors for the purpose of
implementing the procedure for self-insurance buy-outs. The administrator
hereby adopts factors to establish the liability of a private employer or a
public taxing district employer requesting to transfer from state insurance
fund coverage to self-insurance with the buy-out calculated upon the pure
premium paid by the employer on payroll for a seven calendar year period, as
provided in paragraph (M) of rule 4123-19-03 of the Administrative Code. The
factors indicated in attached appendix A shall apply to all
applications.
View Appendix
Last updated July 2, 2024 at 11:36 AM
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Rule 4123-17-41 | Retrospective rating definitions applicable to any employer.
Rules 4123-17-41 to 4123-17-54 of the Administrative Code apply to individual employer retrospective rating. As used in rules 4123-17-41 to 4123-17-54 of the Administrative Code: (A) "Minimum premium" means the fixed cost chargeable to an employer, independent of the claims costs of the employer during the year of experience. (B) "Maximum premium" means the employer's experience-rated premium multiplied by the maximum premium percentage selected by the employer. (C) "Per claim limit" means the maximum chargeable costs for each claim incurred during the retrospective-rated period, as selected by the employer. (D) "Retrospective policy year" or "policy year" means the fiscal year beginning July first for private employers and the calendar year beginning January first for public employer taxing districts. (E) "Evaluation period" means the ten-year period beginning with the first day of the policy year. Annual evaluations will occur throughout the evaluation period. At the end of the evaluation period, final settlement will be made. (F) "Final settlement" means the final determination of premium for a policy year including any remaining reserves for claims occurring in the policy year. This determination will occur at the end of the evaluation period and will terminate the plan for that policy year. (G) "Annual evaluation" means a statement of claim costs and premium. This information will be posted to the employer's online bureau account. (H) "Incurred losses" are compensation payments, medical payments, and reserves, excluding any losses defined in paragraphs (G)(4) and (G)(5) of rule 4123-17-03 of the Administrative Code. Reserves will be assigned at the end of the evaluation period. (I) "Retrospective premium" means the compilation of minimum premium, all medical costs, indemnity, and any remaining reserves at the end of the ten-year evaluation period.
Last updated March 22, 2024 at 11:19 AM
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Rule 4123-17-42 | Eligibility for retrospective rating.
(A) An employer that is either a private
or a public employer taxing district as defined in division (B)(1) of section
4123.01 of the Revised Code may be eligible for either the tier I or tier II
retrospective rating plan depending upon satisfying the eligibility
requirements for either the tier I or tier II retrospective rating plan as
described in this rule. (B) For both the tier I and tier II
retrospective rating plans, the employer must satisfy the following
requirements as of the application deadline: (1) The employer must be
current with respect to all payments due the bureau, as defined in paragraph
(A)(1)(b) of rule 4123-17-14 of the Administrative Code. (2) The employer cannot have cumulative
lapses in workers' compensation coverage in excess of fifteen days within
the last five rating years. (3) The employer must
report actual payroll for the preceding policy year and pay any premium due
upon reconciliation of estimated premium and actual premium for that policy
year no later than the date set forth in rule 4123-17-14 of the Administrative
Code. An employer will be deemed to have met this requirement if the bureau
receives the payroll report and the employer pays premium associated with such
report before the expiration of any grace period established by the
administrator pursuant to paragraph (B) of rule 4123-17-16 of the
Administrative Code. (4) The employer must be in an active
policy status. The administrator may waive this requirement for a new business
entity moving into Ohio. For purposes of this rule, "active policy
status" does not include a policy that is a no coverage policy or a policy
that is lapsed. (5) The employer's estimated
experience-rated premium for the retrospective rating year must be greater than
or equal to the minimum experience-rated premium threshold listed on the
employer's retrospective rating minimum premium percentages table,
contained in the appendices to rule 4123-17-53 of the Administrative Code. If
estimated premium is less than the minimum experience-rated premium threshold
listed on the employer's retrospective rating minimum premium percentages
table, the bureau will reject the application. In the event the estimated
experience-rated premium is equal to or greater than the minimum premium
threshold but the actual premium is less than the minimum experience-rated
premium threshold, the retrospective rating plan remains in effect for that
risk and the minimum premium is based on the minimum experience-rated premium
threshold multiplied by the appropriate minimum premium percentage for the
hazard group and the claim limit/maximum premium percentage
selected. (C) In addition to the requirements of
paragraph (B) of this rule, for the tier I retrospective rating plan, a private
employer must submit audited financial statements prepared in accordance with
generally accepted accounting principles (GAAP) to satisfy the following
requirements: (1) The employer must
satisfy financial standards demonstrating strength and stability. In reviewing
the financial requirements of the employer, the bureau shall consider, but is
not limited to, the following criteria, as applicable: (a) The employer's trend of operating profit for a minimum
of three years; (b) The employer's trend of net income for a minimum of five
years; (c) The employer's consistent return on equity, of at least
ten per cent; (d) Significant asset size of the employer in the state of
Ohio; (e) A total liabilities/equity ratio of no greater than four to
one; (f) The employer's debt structure, including but not limited
to current versus long term debt and recent drastic changes in
debt; (g) The employer's retained earnings trend; (h) Whether the employer has significant fluctuations in specific
balance sheet numbers from one year to the next; and (i) The employer's bond rating. (2) The employer shall
demonstrate the ability to maintain its financial viability and to cover all
costs of the retrospective rating plan through closure, in the event of a
catastrophic or severe workers' compensation loss. (3) The employer cannot have entered into
a part-pay agreement for payment of assessments due the state insurance fund
for the past three rating years preceding the beginning date of the
retrospective policy year. Alternatively, the employer may provide a
letter of credit that is equal to the maximum premium for the applicable policy
year. (D) In addition to the requirements of
paragraph (B) of this rule, for the tier I retrospective rating plan, the
bureau will obtain a public employer taxing district's audited or reviewed
financial statements prepared in accordance with generally accepted accounting
principles (GAAP) that are available on the state of Ohio auditor's
website. The bureau reserves the right to obtain additional financial
information from the public employer taxing district. The bureau will review
the public employer taxing district's financial statements to satisfy the
following requirements: (1) The public employer
taxing district must satisfy financial standards demonstrating strength and
stability. In reviewing the financial requirements of the public employer
taxing district, the bureau shall consider, but is not limited to, the
following criteria, as applicable: (a) Significant asset size of the public employer taxing district
in the state of Ohio; (b) The public employer taxing district's debt structure,
including but not limited to current versus long term debt and recent drastic
changes in debt; (c) Whether the public employer taxing district has significant
fluctuations in amounts reported on the balance sheet and statement of
operations from one year to the next; and (d) The public employer taxing district's underlying or
uninsured bond rating. (2) The public employer
taxing district shall demonstrate the ability to maintain its financial
viability and to cover all costs of the retrospective rating plan through
closure, in the event of a catastrophic or severe workers' compensation
loss. (3) The public employer taxing district
cannot have entered into a part-pay agreement for payment of assessments due
the state insurance fund for the past three rating years preceding the
beginning date of the retrospective policy year. (4) The public employer taxing district
in making its initial application for retrospective rating, cannot be under
fiscal watch or fiscal emergency pursuant to section 118.022, 118.04 or 3316.03
of the Revised Code as of the application deadline for retrospective
rating. (E) In addition to the requirements of paragraph (B) of this
rule, for the tier II retrospective rating plan: (1) A private employer
must submit audited financial statements prepared in accordance with generally
accepted accounting principles (GAAP). (2) The bureau will
obtain a public employer taxing district's audited or reviewed financial
statements prepared in accordance with GAAP or other comprehensive basis of
accounting as permitted in Ohio auditor of state bulletin 2005-002 from the
state of Ohio auditor's website. The bureau reserves the right to obtain
additional financial information from the public employer taxing
district. (3) For a private
employer that does not demonstrate the ability to satisfy the financial
criteria of paragraph (C) of this rule, or a public employer taxing district
that does not demonstrate the ability to satisfy the financial criteria of
paragraph (D) of this rule, the financial statements provided by the employer
must demonstrate the ability to sustain losses that are at the maximum claim
limit for the retrospective rating plan and still maintain its financial
viability.
Last updated July 27, 2023 at 8:44 AM
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Rule 4123-17-43 | Application for retrospective rating plan.
(A) All operations of an employer electing retrospective rating
are subject to retrospective rating. (B) The application must be filed on a bureau application form
for the retrospective rating plan. The application must be completed in its
entirety, including but not limited to the selection of a per-claim limit and
maximum premium per cent. The absence of pertinent information will result in
the application being rejected. (C) The application and all other required information must be
filed by the application deadline. An application for a retrospective rating
plan is applicable to only one policy year. Continuation of a plan for
subsequent years is subject to filing of an application on a yearly basis and
the meeting of eligibility requirements each year. (D) All changes to the original application must be filed on
another application form for the retrospective rating plan prior to the filing
deadline. Any changes made must be completed in writing and signed by an
officer of the company and filed prior to the filing deadline. Any changes
received by the bureau after the filing deadline will not be accepted. The
latest application form or rescission received by the bureau prior to the
filing deadline will be used in determining the premium
obligation.
Last updated February 18, 2022 at 11:48 AM
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Rule 4123-17-44 | Minimum retrospective premium.
(A) The minimum annual premium due shall
not be less than the minimum experience-rated premium threshold times the
minimum premium percentage for the employer's hazard group, claim limit,
and maximum premium percentage for the applicable policy year. The premium will
be subject to the premium sized adjustment described in rule 4123-17-03.3 of
the Administrative Code. (B) If estimated experience-rated premium
is greater than or equal to the minimum experience-rated premium threshold
listed on the employer's retrospective rating minimum premium percentages
table, contained in the appendices to rule 4123-17-53 of the Administrative
Code, but actual experience-rated premium is less than the minimum
experience-rated premium threshold listed, the minimum premium due is the
minimum experience-rated premium threshold times the minimum premium percentage
for the employer's hazard group, claim limit, and maximum premium
percentage. (C) The minimum annual premium is due and
payable even if the employer has no claims costs during the evaluation period
for the applicable policy year. (D) The minimum premium will be
recalculated at the time the employer submits actual payroll pursuant to rule
4123-17-14 of the Administrative Code.
Last updated February 18, 2022 at 11:48 AM
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Rule 4123-17-45 | Initial computation.
(A) The hazard group for an employer
shall be determined as follows: (1) The employer's experience-rated premium is totaled
for each hazard group for the most recently completed policy year. The
employer's hazard group is the group with the highest percentage of
premium for the recently completed policy year; (2) For an employer new to Ohio without a reported payroll,
the hazard group is based on the employer's application for
workers' compensation coverage; (3) Hazard groups are defined as follows: (a) For private
employers, appendix C to rule 4123-17-72 of the Administrative Code;
and (b) For public employer
taxing districts, appendix E to rule 4123-17-72 of the Administrative
Code. (B) The bureau shall notify the employer
of the estimated minimum premium percentage based on the limits selected by the
employer and the payroll of the employer. The premium rates on the payroll
reports received by the employer for the policy year will be calculated using
the minimum premium per cent and the premium sized adjustment described in rule
4123-17-03.3 of the Administrative Code.
Last updated February 18, 2022 at 11:48 AM
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Rule 4123-17-46 | Premium adjustments.
Effective:
November 1, 2021
(A) Upon completion of a policy year and
annually throughout the evaluation period, the employer's aggregate
retrospective-rated premium for the policy year will be determined based on the
incurred losses and on the audited payrolls of the employer. The bureau shall
annually send the employer an annual evaluation within approximately four
months following the end of the policy year. (B) Incurred losses will be based on
compensation payments and medical payments, as defined in rule 4123-17-41 of
the Administrative Code. The cost of permanent total disability claims and
death claims will be charged to the employer as the payments are made, and the
reserve will be billed in the final settlement. (C) If the retrospective premium due is
less than the retrospective premium paid as of the prior evaluation date, the
difference, subject to the minimum premium, less assessments due any fund
administered by the bureau will be refunded to the employer. (D) If the retrospective premium due is
greater than the retrospective premium paid as of the prior evaluation date,
the difference must be paid to the bureau within forty-five days after the due
date of the invoice billing the additional retrospective premium, or the
employer will be subject to penalties as provided in rule 4123-17-48 of the
Administrative Code. (E) Values used in an annual evaluation
will not be revised for any reason other than clerical error. The bureau must
be notified of any such errors, in writing, within sixty days after the due
date on the invoice billing the retrospective premium. (F) Premiums are subject to minimum and
maximum premium limitations as selected by the employer.
Last updated November 2, 2021 at 10:12 AM
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Rule 4123-17-47 | Final settlement.
(A) At the end of the tenth-year
determination of retrospective premium, the plan for that retrospective policy
year shall terminate. (B) As part of the final determination of
retrospective premium, the bureau will evaluate the employer's claims and
establish reserves. Reserves will be developed for claims, other than allowed
permanent total disability claims and allowed death claims, using the balance
sheet reserve table in effect as of the ending date of the evaluation
period. (C) The bureau will notify the employer
of the reserve balances which will be reflected on the annual
evaluation. (D) The final settlement calculated,
subject to the minimum and maximum premium of the plan selected, shall be paid
to the bureau within forty-five days after the due date the the additional
retrospective premium. (E) The final determination of a
retrospective premium will not be revised for any reason other than clerical
error.
Last updated February 18, 2022 at 11:48 AM
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Rule 4123-17-48 | Penalties.
Any retrospective-rated employer failing to file a
report of payroll expenditures or failing to pay premium when due, as
prescribed in rules 4123-17-14, 4123-17-14.2, 4123-17-46, and 4123-17-47 of the
Administrative Code, will be penalized in accordance with paragraph (C) of rule
4123-17-16 of the Administrative Code . All premium due as a result of the
selection of retrospective rating, including the minimum premium and premium as
a result of annual evaluations, shall be included as premium as used in this
rule.
Last updated February 18, 2022 at 11:48 AM
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Rule 4123-17-49 | Disability relief.
Disability relief, as permitted under section
4123.343 of the Revised Code and rule 4123-3-35 of the Administrative Code,
will be applied to reducible claims costs as limited by the per-claim limit
selected by the employer.
Last updated April 2, 2024 at 9:08 AM
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Rule 4123-17-51 | Termination and transfers.
(A) A risk may not retroactively include
claims experience in a plan, exclude claims experience from a plan nor
voluntarily terminate a plan during the evaluation period. (B) Successor: retrospective-rated
predecessor: experience-rated, base-rated, non-complying or
self-insured Where one legal entity that has established
coverage and is a retrospective-rated employer wholly succeeds one or more
legal entities having established coverage and the predecessor entities are
either experience-rated, base-rated, non-complying or self-insured at the date
of succession, the costs incurred and payroll reported by the predecessor from
the date of succession to the end of the policy year, shall be included in the
successor's retrospective rating plan. The successor remains liable for
any and all charges associated with the predecessor. If the predecessor had at
any time participated in a retrospective policy plan, the successor remains
liable for any and all charges associated with the retrospective policy plans.
The adjustment for combinations in the experience rating system will follow the
same rules that are in effect as of the date of succession. (C) Successor: self-insured predecessor:
retrospective-rated Where one legal entity that has established
coverage and is a self-insured employer wholly succeeds one or more entities
that are retrospective-rated, the retrospective-rated predecessor's
plan(s) shall terminate as of the ending date of the evaluation period. Payroll
reported and claims incurred on or after the date of succession will be the
responsibility of the successor. The successor shall remain responsible for all
liabilities of the predecessor, including but not limited to costs associated
with any retrospective policy years still in the evaluation period. The minimum
premium for the current policy year will be based on the predecessor's
annualized payroll. (D) Successor: experience-rated or
base-rated predecessor: retrospective-rated Where one legal entity that has established
coverage and is an experience-rated or based-rated employer wholly succeeds one
or more entities that are retrospective-rated, the retrospective-rated
predecessor's plan(s) shall terminate as of the ending date of the
evaluation period. Payroll reported and claims incurred on or after the date of
succession will be the responsibility of the successor under its experience
rated plan. The successor shall remain responsible for all liabilities of the
predecessor, including but not limited to costs associated with any
retrospective policy years still in the evaluation period. The minimum premium
for the current policy year will be based on the predecessor's annualized
payroll. (E) Successor: retrospective-rated
predecessor: retrospective-rated If the successor and the predecessor are
retrospective-rated employers for the current policy year, the successor shall
be retrospective-rated based on the combined experience of the predecessor and
the successor. The successor remains liable for any and all retrospective-rated
premiums or other charges associated with the predecessor. The adjustment for
combinations in the experience rating system will follow the same rules that
are in effect as of the date of succession. (F) Successor: entity not having coverage
predecessor: retrospective-rated When an entity not having coverage wholly
succeeds a retrospective-rated entity, the experience of the predecessor shall
be transferred to the successor-employer effective as of the actual date of
succession. The successor remains liable for any and all open
retrospective-rated premium or other charges associated with the predecessor.
The successor entity will become retrospective-rated as of the date of
succession until the end of the policy year, with the same plan parameters
chosen by the predecessor risk. The adjustment for combinations in the
experience rating system will follow the same rules that are in effect as of
the date of succession. (G) Successor: cancels coverage
predecessor: no predecessor If a current or previously retrospective-rated
employer cancels coverage and does not transfer or combine operations with
another entity, all open retrospective policy years will be terminated as of
the date of cancellation. If the employer was retrospective-rated during the
two most recent rating years, the final premium for each of those years will be
the maximum premium for the plan selected by the employer. The maximum premium
for the current year will be based on the employer's annualized payroll.
If the employer was retrospective-rated in other years of the evaluation
period, the final premium for each of those years will be calculated as stated
in rule 4123-17-47 of the Administrative Code. (H) Successor: files a petition for
bankruptcy predecessor: no predecessor If a current or previously retrospective-rated
employer with open policy year(s) files a petition for bankruptcy under chapter
7 or chapter 11 of the Federal Bankruptcy Law, that employer shall notify the
bureau's law section by certified mail within five working days from the
date of the bankruptcy filing. The bureau will petition the bankruptcy court to
take appropriate action to protect the health of the state insurance fund and
other related funds. (I) Successor and/or predecessor: open
retrospective-rated policy years in the evaluation period. If the successor and predecessor employers are
not currently retrospective-rated but either or both have open
retrospective-rated policy years in the evaluation period, the successor shall
be liable for any and all retrospective-rated premiums or other charges
associated with the predecessor. The adjustment for combinations in the
experience rating system will follow the same rules that are currently being
used. (J) Partial transfer If an entity partially succeeds another entity
and the predecessor entity has any retrospective policy years in the evaluation
period, the predecessor entity remains liable for all premium associated with
claims incurred prior to the date of the partial transfer. If the financial
capability of the predecessor entity is not sufficient to cover the costs of
the retrospective rating plan, the successor shall be liable for all unpaid
costs of the predecessor's retrospective rating plan through closure. If
the successor is retrospective-rated in the current policy year and the
effective date of the partial transfer is other than the beginning of the
rating year, the successor will continue to be rated in the same manner as
prior to the transfer. The successor will be liable for any payroll and/or
claims incurred from that part of the predecessor entity which was transferred,
beginning on the date of the transfer. If the successor has retrospective
policy years in the evaluation period, the successor remains liable for all
charges associated with retrospective rating plan(s), whether or not the
successor is retrospective rated as of the effective date of the partial
transfer. The adjustment for partial transfers in the experience rating system
will follow the same rules that are in effect as of the date of
succession. (K) Transfer or sale of assets
only In the case of the transfer or sale of assets
without transfer of liability or stock, the transferor who is now
retrospective-rated or has been retrospective-rated with policy year(s) still
in the evaluation period shall notify the bureau's actuarial section by
certified mail within five working days of the date of transfer. The bureau
shall schedule and hold a hearing within sixty days of such notification, or in
the event of no notification, within sixty days of receiving information which
indicates such a transfer may have occurred. At this hearing the bureau shall
determine and set responsibility for funding the as yet unpaid costs associated
with the retrospective policy year(s) still in the evaluation period.
Last updated February 18, 2022 at 11:48 AM
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Rule 4123-17-52 | Parameters of the retrospective rating plan.
(A) An employer participating in
retrospective rating will pay the following: (1) Minimum premium. The
minimum premium depends on the assigned hazard group, the per claim limit
selected by the employer, the maximum premium limit selected by the employer,
and the employer's base-rated premium or experience-rated premium. The
employer's base-rated premium or experience-rated premium is assumed to be
at least the minimum experience-rated/base-rated premium threshold listed on
the employer's retrospective rating minimum premium percentages table
contained in the appendices to rule 4123-17-53 of the Administrative Code. The
minimum premium includes employer contributions to cover safety and hygiene
costs, surplus costs, and the cost of losses exceeding the per claim and the
maximum premium limitations and those health partnership program costs
associated with the losses exceeding the per claim and the maximum premium
limitations. The minimum premium is subject to the premium sized adjustment
described in rule 4123-17-03.3 of the Administrative Code. (2) Premium based on paid
losses. The employer will pay for any compensation payments, including death
and permanent total disability, and medical payments made in covered claims.
Billings to the employer will be sent annually for ten years to collect for
these medical and compensation payments. (3) Premium based on
claim reserves. The employer will pay the value of reserves on claims evaluated
as of the end of the tenth year. (4) Premium for health
partnership program costs on retained losses. In each evaluation period
associated with a policy year, the employer will pay an additional premium
based on a percentage, known as the loss conversion factor applied to the paid
losses and claims reserves to cover the associated health partnership program
costs of those paid losses or claims reserves. Each policy year will have a
specific loss conversion factor, determined before the start of the policy
year, which will apply for the ten year retrospective period. (B) Surplus charges in claims will not be
charged to the employer. (C) Individual claims costs will be
limited to the per claim limit selected by the employer. The usual experience
rating limitations will not apply. (D) The employer's maximum premium
will be limited to a percentage of its base-rated or experience-rated premium
as selected by the employer. That is, premiums based on losses, reserves and
health partnership program costs charged to the employer cannot exceed the
maximum premium minus the minimum premium. The maximum premium is subject to
the premium sized adjustment described in rule 4123-17-03.3 of the
Administrative Code (E) The premium for health partnership
program costs on retained losses is an aggregate calculation made on the total
billings to an employer for either paid losses or reserves. As such, premiums
associated with health partnership program costs are not allocated to
individual claims, and therefore are not considered when evaluating whether an
individual claim has reached the per claim limit. (F) When an employer leaves a retrospective rating program and
returns to the state fund program, the employer shall be subject to all of the
provisions of rule 4123-17-03 of the Administrative Code, classification
rates. (G) An employer removed from
retrospective rating for failure to comply with paragraph (B) of rule
4123-17-42 of the Administrative Code will be required to pay: (1) Claims costs
according to this rule for all injuries incurred from the beginning of the
policy year in which the employer participated in retrospective rating through
the date of removal from the program. (2) Full experience-rated
premium from the date of removal from retrospective rating through the
remainder of the policy year.
Last updated February 18, 2022 at 11:48 AM
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Rule 4123-17-53 | Private employer retrospective rating plan minimum premium percentages.
The administrator of workers' compensation,
with the advice and consent of the bureau of workers' compensation board
of directors, has authority to approve contributions made to the state
insurance fund by employers pursuant to sections 4121.121, 4121.13, 4121.30,
4123.29, and 4123.34 of the Revised Code. The administrator hereby sets the private employer
retrospective rating plan minimum premium percentages to be effective July 1,
2024, as indicated in the appendixes A, (Tier I, tables A, B, C, D, E, F, and
G) and B (Tier II, tables A, B, C, D, E, F, and G) to this rule. The administrator hereby sets the private employer
loss conversion factors to be applied to losses associated with policy years
beginning on or after July 1, 2015, as indicated in appendix C to this
rule.
View AppendixView Appendix
Last updated July 2, 2024 at 11:37 AM
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Rule 4123-17-54 | Public employer retrospective rating plan
minimum premium percentages.
Effective:
January 1, 2023
The administrator of workers' compensation,
with the advice and consent of the bureau of workers' compensation board
of directors, has authority to approve contributions made to the state
insurance fund by employers pursuant to sections 4121.121, 4123.29, and 4123.34
of the Revised Code. The administrator hereby sets the public employer
taxing districts retrospective rating plan minimum premium percentages to be
effective January 1, 2016, as indicated in appendixes A (Tier I) and B (Tier
II) to this rule. The administrator hereby sets the public employer
loss conversion factors to be applied to losses associated with policy years
beginning on or after January 1, 2016, as indicated in appendix C to this
rule.
View AppendixView Appendix
Last updated June 7, 2024 at 1:20 PM
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Rule 4123-17-55 | Transitional work development grant and transitional work bonus program.
(A) Definitions. As used in this rule: (1) "AEO" and
"PEO" have the same meaning as defined in rule 4123-17-15 of the
Administrative Code. (2) "Application deadline"
means the applicable application deadline set forth in appendix A or in
appendix B to rule 4123-17-74 of the Administrative Code. (3) "Client employer" has the
same meaning as defined in rule 4123-17-15 of the Administrative
Code. (4) "Program
period" means the policy year for which the employer elects to participate
in the transitional work program. (5) "Transitional work" has the
same meaning as defined in rule 4123-6-01 of the Administrative
Code. (6) "Transitional work
developer" means the provider who develops the employer's
transitional work program. A transitional work developer shall: (a) Meet the minimum credentials designated in rule 4123-6-02.2
of the Administrative Code for one of the following provider
types: (i) A vocational
rehabilitation case manager, (ii) An occupational
therapist, or (iii) A physical
therapist; and (b) Complete bureau of workers' compensation sponsored
transitional work development training prior to delivering transitional work
programs and at two-year intervals. (B) Eligibility
requirements. (1) To receive benefits
under this rule, the employer must meet the following criteria as of the
application date for the grant or the application deadline for the transitional
work bonus: (a) The employer must be current with respect to all payments due
the bureau, as defined in rule 4123-17-14 of the Administrative
Code. (b) The employer must not have cumulative lapses in
workers' compensation coverage in excess of forty days within the
preceding twelve months. (c) The employer must be in an active policy status. For purposes
of this rule, "active policy status" does not include a policy that
is a no coverage policy or a policy that is lapsed. (d) The employer must report actual payroll for the preceding
policy year and pay any premium due upon reconciliation of estimated premium
and actual premium for that policy year no later than the application
deadline. (2) The following
employers shall not be eligible for either a transitional work program
development grant or a transitional work bonus under this rule: (a) Employers paying the minimum administrative charge for the
applicable payroll reporting period as set forth in rule 4123-17-26 of the
Administrative Code; (b) State agencies; and (c) Self-insuring employers providing compensation and benefits
pursuant to section 4123.35 of the Revised Code. (3) The following
employers shall not be eligible to receive a transitional work program
development grant under paragraph (C) of this rule: (a) Employers who have elective coverage only; and (b) Sole proprietors with zero payroll. (4) An employer that is found to be
ineligible for participation in the program may reapply for a subsequent
program period. (C) Transitional work program development
grant. (1) An employer
interested in obtaining a transitional work program development grant shall
apply to the bureau on a form provided by the bureau. In signing the
application form, the chief executive officer or designated management
representative of the employer is certifying to the bureau that the employer
will comply with all program requirements. (2) The bureau shall
evaluate each application to determine the employer's eligibility to
receive a transitional work program development grant and shall have the final
authority to approve a grant for an eligible employer and to determine the
amount of the grant. If, upon review of an application, the bureau determines
that it can assist the employer in developing a transitional work program, the
bureau may deny the grant and provide assistance to the employer
directly. (3) Transitional work
program development grant awards expire five years from the date of the mailing
of the notice of approval of the grant. Upon expiration of the grant, the
employer loses any remaining grant funds that were awarded but unspent.
However, the employer may apply for a new transitional work program development
grant. (4) An employer is eligible for no more
than one transitional work program development grant per policy number every
five years, calculated from the date of the mailing of the notice of approval
of the previous transitional work program development grant. The bureau shall
provide assistance to employers as needed to update transitional work programs
developed with previous grants. (5) Grant amounts will be determined by
the bureau based on employer size and the complexity of services needed for
transitional work services. Factors which may determine appropriate grant
amounts may include the employer's: (a) Payroll; (b) Job classifications; (c) Job analyses needed; and (d) Collective bargaining agreements. (6) The bureau shall not reimburse an
employer for costs associated with a transitional work developer's
preparing and submitting a proposal to an employer and shall not reimburse for
costs determined by the bureau to be ineligible or unnecessary. The bureau may
monitor the content and implementation of transitional work
services. (7) The employer shall have and maintain
continuous active state fund coverage for a period of one year from the date
the bureau disburses the grant funds to the employer. The bureau may recover
the entire grant if the bureau determines the employer has failed to maintain
coverage as required by this rule. (D) Transitional work bonus
program. An employer who has developed and implemented a
transitional work program may be eligible to receive a transitional work bonus
as provided in this rule. (1) The employer must
report actual payroll due upon reconciliation of estimated premium and actual
premium for the program period no later than the date set forth in rule
4123-17-14 of the Administrative Code. An employer will be deemed to have met
this requirement if the bureau receives the payroll report, and the employer
pays premium associated with such report, before the expiration of any grace
period established by the administrator of workers' compensation pursuant
to rule 4123-17-16 of the Administrative Code. (a) Failure to comply with paragraph (D)(1) of this rule shall
immediately remove the employer from the transitional work bonus program for
the current program period, and the employer shall not be eligible for a
transitional work bonus for the current program period. (b) Should an employer fail to comply with paragraph (D)(1) of
this rule, the employer may reapply to the transitional work bonus program
subject to the eligibility requirements of paragraph (B) of this rule for the
next program period. (2) An employer interested in
participating in the transitional work bonus program shall apply to the bureau
on a form provided by the bureau. In signing the application form, the chief
executive officer or designated management representative of the employer is
certifying to the bureau that the employer will comply with all program
requirements. (3) The bureau shall evaluate each
application to determine the employer's eligibility to participate in the
transitional work bonus program at the time of the application. The bureau
shall have the final authority to approve an eligible employer for
participation in the transitional work bonus program. (4) The transitional work program bonus
calculation shall occur at six months following the end of the applicable
program period. The bureau will evaluate all claims of the employer with injury
dates that fall within the applicable program period to determine: (a) How many of those claims had the potential for transitional
work services, and (b) How many of the claims identified in paragraph (D)(4)(a) of
this rule utilized transitional work services. (5) The bureau will calculate the
employer's percentage of claims with potential for transitional work
services in which transitional work services were utilized. (6) The employer will receive a
transitional work bonus equal to the percentage calculated pursuant to
paragraph (D)(5) of this rule multiplied by a percentage of the employer's
pure premium for the applicable program period as set forth in the appendix to
rule 4123-17-75 of the Administrative Code. The transitional work bonus will be
posted to the employer's account with the bureau. (7) An AEO or a PEO shall be eligible to
receive a transitional work bonus under this rule for claims in which the AEO
or the PEO was the employer of record on the date of injury and transitional
work services were available under a transitional work program of either the
AEO, the PEO or its client employer. (8) An employer may appeal the
bureau's transitional work bonus program application rejection or the
bureau's transitional work bonus determination to the bureau's
adjudicating committee pursuant to section 4123.291 of the Revised Code and
rule 4123-14-06 of the Administrative Code. (9) Unless an employer notifies the
bureau otherwise as outlined below, continued participation in this program for
each subsequent program period shall be automatic provided that the employer
continues to meet the eligibility requirements set forth in paragraph (B) of
this rule. An employer that elects to opt out of continued
participation in this program shall provide written notice to the bureau by the
application deadline set forth in this rule. (10) The transitional work bonus program will gradually be
phased out with reductions in the percentage of the empoyer's pure premium
for the applicable program period used in the transitional work bonus
calculation pursuant to paragraph (D)(6) of this rule and the maximum
transitional work bonus per employer, as set forth in the appendix to rule
4123-17-75 of the Administrative Code. The last policy year for the
transitional work bonus program will be the policy year beginning July 1, 2025,
for private employers, and beginning January 1, 2026, for public
employers.
Last updated July 2, 2024 at 11:37 AM
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Rule 4123-17-56 | Safety grant programs.
Effective:
December 9, 2023
(A) Pursuant to section 4121.37 of the
Revised Code, the administrator of workers' compensation may establish a
program of safety grants for safety interventions or research for eligible
employers. The safety grant program may provide grant funds to an eligible
employer for safety interventions including education, training, research, or
purchase of equipment to prevent occupational injuries, illnesses, or
fatalities. (1) The purpose of the
safety intervention grant program is for the division of safety and hygiene of
the bureau of wokers' compensation to fund employer interventions that
reduce the risk of injuries, illnesses, and fatalities in the workplace,
investigate the effectiveness of safety interventions in preventing
occupational injuries, illnesses, and fatalities and establish safety and
health best practices. For this purpose, the bureau may make safety grants to
employers as provided in this rule. (2) If the division of
safety and hygiene concludes there are interventions outside the scope of the
program, the division of safety and hygiene may establish an unapproved items
list to notify employers of specific safety education, training, research, or
purchase of equipment that the bureau shall not fund. (B) The bureau may limit participation
in the safety grant program based upon: (1) The availability of
bureau resources for the program; (2) The merits of the
employer's proposal; (3) The type of
employer's policy; (4) The manual numbers reported under
the employer's policy; (5) The employer's policy history;
or (6) The safety grant
program objectives and unapproved items list under paragraph (A) of this
rule. (C) The bureau shall determine whether
the employer's policy is eligible for the safety grant program under this
rule. The employer must satisfy the following criteria: (1) The safety grant
program is available only to a private state fund employer, a public employer
taxing district, a marine industry fund employer, or a coal-workers'
pneumoconiosis fund employer; (2) The employer shall
have active state fund-coverage to participate in the safety grant
program; (3) The employer shall
have active coverage for one year prior before applying for a safety grant and
shall maintain active coverage for the one year after implementation of the
safety intervention under the safety grant approved by the bureau; (4) The employer shall be
current with respect to all payroll reporting and required payments due to any
fund administered by the bureau; (5) The employer shall
not have more than forty days of cumulative lapses in workers'
compensation coverage within the prior twelve months. (D) The bureau will assess whether the employer's proposed
safety intervention is eligible to participate in the safety grant program
under this rule. (1) The employer's
proposed safety intervention shall explain how one of the following objectives
is attained through receipt of safety grant funds: (a) Reduction of risk of workplace injuries, illnesses, or
fatalities; or (b) Advancement of research into the prevention of workplace
injuries, illnesses, or fatalities. (2) The owner, chief executive officer,
chief financial officer or persons having fiduciary responsibilities with the
employer may be required to meet with a bureau consultant to review the safety
grant program application. (3) The bureau shall review and evaluate
the safety grant application. The bureau may also assess and evaluate the
employer's safety and loss prevention and control programs. If the bureau
accepts the employer into the safety grant program, the employer shall submit
reports and case studies to the bureau as required by the bureau for a period
of one year following the purchase and implementation of the safety
intervention. (4) The bureau and employer shall enter
into a written agreement detailing the rights, obligations, and expectations of
the parties for performance of the safety grant program. (5) The employer may not apply for a
safety grant for reimbursement of previously purchased safety
interventions. (6) The employer shall agree to not
eliminate jobs or reduce employment due to the intervention funded by the
safety grant program. If the bureau determines an employer has violated this
provision, the employer shall be immediately disqualified from participation in
the safety grant program, and the employer shall return all disbursed safety
grant funds to the bureau for the intervention that eliminated jobs or reduced
employment. (7) The bureau shall establish policies
and processes for adding or removing safety interventions on the unapproved
items list. The bureau shall not accept an employer's proposed
intervention if the employer's proposed intervention contains any item on
the unapproved items list. (E) The bureau may meet with the owner, chief executive officer,
chief financial officer, or persons having fiduciary responsibilities with the
employer to evaluate the employer's progress in the safety grant program.
The employer shall provide the bureau access to records or personnel to conduct
research into the effectiveness of the safety grant program. (F) An employer who complies with the requirements of the safety
grant program under this rule shall be eligible to receive a grant from the
bureau as provided in the written agreement. (1) The bureau may
establish by written agreement with the employer the maximum amount of the
safety grant funds. (2) The bureau may
establish by written agreement with the employer a requirement for matching
funds from the employer in a ratio to be determined by the bureau. (3) The bureau shall
monitor the employer's use of the safety grant program funds. The bureau
may recover the entire grant if the bureau determines that the employer has not
used the grant for the purposes of the safety grant program or has otherwise
violated the written agreement of the safety grant program. (G) Reconsideration of determination of ineligibility to
participate in, or disqualification from, the safety grant
program. (1) An employer may
request reconsideration of a decision finding the employer did not meet the
requirements provided in paragraph (C) of this rule or disqualifying the
employer from continued participation in the safety grant program. The request
must be in writing and filed with the superintendent of the division of safety
and hygiene within thirty days of the notification of the
decision. (2) The employer may
submit a request for reconsideration of the superintendent's decision to
the adjudicating committee in accordance with the provisions contained in rule
4123-14-06 of the Administrative Code. (H) Upon the approval, purchase, and implementation of the safety
intervention, the employer shall provide to the bureau sufficient documentation
on the use of the funds, including proof of payment, proof of the
employer's and bureau's contribution, and proof that the funds were
fully applied to the approved safety intervention. (1) The employer shall
purchase, implement, and provide purchase documentation for all approved safety
interventions within the time period determined by the superintendent from the
date that the bureau disburses safety grant funds to the employer. (2) The purchase and implementation of
the safety intervention can take place only after the approval of the safety
grant funds. (3) The bureau may extend the period
defined in paragraph (H)(1) of this rule by up to ninety days in special
circumstances where the employer, for reasons beyond their control, experiences
delay in purchasing or implementing the approved safety intervention. The
employer must request additional time in writing that explains the special
circumstances, with any supporting documentation, and specifying the additional
time needed. The bureau may grant additional extensions of up to ninety days,
pursuant to the same requirements and guidelines for the initial extension, but
the cumulative period of all extensions shall not exceed one year. (I) The bureau shall evaluate the effectiveness of the safety
grant program on a periodic basis. The bureau may publish reports of the safety
grant program's effectiveness and research findings to assist employers in
preventing workplace injuries and illnesses. (J) Marine industry fund and
coal-workers' pneumoconiosis fund safety grants. (1) A marine industry
fund employer or a coal-workers' pneumoconiosis fund employer applying for
a safety grant is subject to paragraphs (A) to (I) of this rule. (2) The bureau's
division of safety and hygiene shall determine whether the marine industry fund
employer or the coal-workers' pneumoconiosis fund employer is eligible for
the safety grant program under this rule. The safety grant program in this rule
is available only to a marine industry fund or a coal-workers'
pneumoconiosis fund employer that satisfies the following additional
criteria: (a) A marine industry fund employer shall have and shall maintain
active state fund coverage under rule 4123-17-19 of the Administrative
Code. (b) A coal-workers' pneumoconiosis fund employer shall have
and shall maintain active state fund coverage under rule 4123-17-20 of the
Administrative Code. (c) A coal-workers' pneumoconiosis fund employer may only
use the safety grant to purchase equipment to prevent coal workers'
pneumoconiosis. (3) Additional employer responsibilities
include: (a) A marine industry fund employer or a coal-workers'
pneumoconiosis fund employer shall contact the local bureau customer service
office to schedule a visit by a bureau safety consultant. (b) A coal-workers' pneumoconiosis fund employer shall also
schedule a visit by a mine safety inspector from the Ohio department of natural
resources.
Last updated December 11, 2023 at 9:52 AM
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Rule 4123-17-56.1 | Workplace wellness grant program rule.
Effective:
March 26, 2018
(A) For purposes of this
rule: (1) "Health risk
factors" means physical and mental characteristics that can be modified,
nearly always with much less cost compared to waiting for sickness and then
attempting to treat the disease. (2) "Employer"
or "employer" means a private state fund employer, a public employer
taxing district, a marine industry fund employer, or a coal-workers'
pneumoconiosis fund employer. (3) "Workplace
wellness program" means a health and wellness program in the workplace
which consists of a biometric screening and health risk appraisal, and
activities based on the results of the screening, program measurements and
policies. (B) Workplace wellness grant
program. (1) Pursuant to section
4121.37 of the Revised Code, the administrator may establish a program of
workplace wellness grants for the prevention of occupational injuries and
illnesses for which an employer is eligible under this rule. The workplace
wellness grant may include grants to an employer to provide funds to address
health risk factors to reduce the number and severity of workplace injuries and
illnesses. (2) The bureau shall
determine whether the employer is eligible for the workplace wellness grant
program under this rule. The bureau may limit participation in the workplace
wellness grant program based upon the availability of bureau resources for the
program and upon the merits of the employer's proposal. The bureau shall
award grant funds for employers on a first come, first serve basis. The
workplace wellness grant program is available to a state-fund employer that
satisfies the following criteria: (a) The employer shall be current with respect to all
payroll reporting and payments due to any fund administered by the
bureau. (b) The employer shall not have more than forty days of
cumulative lapses in workers' compensation coverage within the prior
twelve months. (c) The employer shall maintain active state fund coverage
to participate in the workplace wellness grant program. (d) For grants to an employer for the research and
implementation of workplace wellness programs, the employer shall submit to the
bureau an application for participation in the workplace wellness grant
program. The employer shall demonstrate a need for workplace wellness grant
program. (e) The employer is not eligible for a workplace wellness
program grant if the employer has an existing workplace wellness
program. (3) The bureau shall
assess the employer's workplace wellness proposal and shall review the
workplace wellness grant program application, including the baseline assessment
of the worksite provided in the application. (a) If the bureau accepts the employer into the workplace
wellness grant program, the employer shall submit an annual report to the
bureau for up to four years following the implementation of the wellness
program. The employer shall develop an implementation strategy plan for its
workplace wellness grant program. (b) The bureau and employer shall enter into a written
agreement detailing the rights, obligations, and expectations of the parties
for performance of the workplace wellness grant program. (c) The employer shall implement the wellness program
within three months from the date that the bureau disburses the grant funds to
the employer. The implementation of the workplace wellness program cannot take
place before the disbursement of the grant funds. (4) The employer shall
agree to not eliminate jobs or reduce employment due to the implementation of
the workplace wellness program. (5) The bureau may meet
with the owner, chief executive officer, chief financial officer, or persons
having fiduciary responsibilities with the employer to evaluate the
employer's progress in the workplace wellness grant program. (6) An employer who complies with the
requirements of the workplace wellness grant program under this rule shall be
eligible to receive a grant from the bureau as provided in the written
agreement. (a) The bureau may establish a limit for the amount of
monies it disburses for the workplace wellness grant and this amount shall be
established by written agreement with the employer. (b) The bureau may require that the employer must execute
its workplace wellness program through an approved vendor. (c) The bureau shall monitor the employer's use of
the workplace wellness grant program funds. (7) Reconsideration of determination of
eligibility. (a) An employer may request reconsideration from a decision
finding the employer did not meet the requirements provided in paragraph (B)(2)
or (B)(3) of this rule. The request must be in writing and filed with the
superintendent of the division of safety and hygiene within thirty days of the
notification of the decision. (b) The employer may submit a request for reconsideration
of the superintendent's decision to the adjudicating
committee. (c) The adjudicating committee shall consider the request
and make a recommendation on the employer's eligibility to the
administrator. (d) The decision of the administrator shall be
final. (8) Upon the approval of the proposed
wellness program, the employer shall provide to the bureau documentation on the
use of the funds, including submission of original paid itemized invoices,
proof of payment, proof of the employer's contribution, and cancelled
checks that demonstrate the employer spent all workplace wellness grant funds
toward the approved expenditures. (9) The bureau shall evaluate the
research data from the workplace wellness grant program on a periodic basis.
The bureau may publish reports of the research to assist employers in
preventing workplace injuries and illnesses. (C) Continuing eligibility for the
workplace wellness grant program once acceptance has been granted. (1) An employer
participating in the workplace wellness grant program shall be eligible to
continue participating in the program only if the employer maintains active
workers' compensation coverage according to the following
standards: (a) The employer must be current with respect to all
payroll reporting and payment due to any fund administered by the
bureau. (b) The employer must not have cumulative lapses in
workers' compensation coverage in excess of forty days within the prior
twelve months. (2) After the first year
of enrollment, an employer participating in the workplace wellness grant
program shall be eligible to renew its application and continue participation
at the discretion of the bureau. (3) Applications
submitted for the workplace wellness grant program may be processed and renewed
by the bureau on a rolling basis. (D) Disqualification from the workplace
wellness grant program. (1) An employer shall be
immediately disqualified from the participation in the workplace wellness grant
program if the employer is found by the bureau to have knowingly misrepresented
information on the initial application for employee participation and
compliance with program requirements. As used in this paragraph,
"knowingly" means that the employer had actual knowledge of the
misrepresentation and was aware that the misrepresentation would cause a
certain result. (2) An employer shall be
immediately disqualified from participation in the workplace wellness grant
program if the bureau determines the employer has violated any state or federal
statutes pertaining to confidential personal information and personal health
information, including but not limited to the statutes and rules contained in
rule 4123-10-04 of the Administrative Code. (3) An employer shall be
immediately disqualified from participation in the workplace wellness grant
program if the bureau determines the employer has coerced employees to
participate in the workplace wellness grant program. As used in this paragraph,
"coerced" is defined as intimidating an employee to compel the
individual to do some act against his or her will by the use of psychological
pressure, physical force, or threats. The definition of coercion as stated in
section 2905.12 of the Revised Code shall also apply to this
paragraph. (4) An employer shall be immediately disqualified from
participation in the workplace wellness grant program if the bureau determines
the employer eliminated jobs or reduced employment due to the implementation of
its workplace wellness program. (5) The bureau may disqualify an employer from the
workplace wellness grant program if the bureau determines that the employer has
not used the grant for the purposes of the workplace wellness grant program or
has otherwise violated the written agreement. (6) An employer shall be disqualified from continued
participation in the workplace wellness grant program if the employer violated
paragraph (C)(1) of this rule. (7) An employer that is disqualified from participation in
the workplace wellness grant program under the preceding paragraphs shall make
restitution of all monies awarded by the bureau for participating in the
program. (8) Reconsideration of disqualification from workplace
wellness program. (a) An employer may
request reconsideration from a decision finding the employer is disqualified
from the workplace wellness program. The request must be in writing and filed
with the superintendent of the division of safety and hygiene within thirty
days of the notification of the decision. (b) The employer may
submit a request for reconsideration of the superintendent's decision to
the adjudicating committee. (c) The adjudicating
committee shall consider the request and make a recommendation on the
employer's eligibility to the administrator. (d) The decision of the
administrator shall be final. (e) {Enter paragraph text
here}
Last updated November 29, 2023 at 2:25 PM
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Rule 4123-17-56.2 | Safety council rebate incentive program.
(A) Definitions. For the purposes of this rule, (1) "Local safety
council" means an entity contracted with the bureau of workers'
compensation to provide a safety campaign in accordance with standards set
forth by the superintendent of the division of safety and hygiene. (2) "Program
year" means July first to June thirtieth, inclusive. (3) "Superintendent" means the superintendent of the
division of safety and hygiene or the superintendent's
designee. (B) For each program year, the
administrator may establish a safety council rebate. (1) The superintendent shall determine
safety council rebate eligibility requirements for each program year and
publish such program requirements no later than sixty days prior to the start
of the program year. (2) The safety council rebate shall be
equal to the amount identified in the appendix to rule 4123-17-75 of the
Administrative Code times the employer's pure premium costs during the
program year. (C) Eligibility
requirements. (1) To receive a rebate
as set forth in paragraph (B) of this rule the employer must meet the following
criteria as of the application deadline: (a) The employer must be current with respect to all payments due
the bureau, as defined in paragraph (A)(1)(b) of rule 4123-17-14 of the
Administrative Code. (b) The employer must not have cumulative lapses in
workers' compensation coverage in excess of forty days within the prior
twelve months. (c) The employer must report actual payroll for the preceding
policy year and pay any premium due upon reconciliation of estimated premium
and actual premium for that policy year no later than the date set forth in
rule 4123-17-14 of the Administrative Code. An employer will be deemed to have
met this requirement if the bureau receives the payroll report and the employer
pays premium associated with such report before the expiration of any grace
period established by the administrator pursuant to paragraph (B) of rule
4123-17-16 of the Administrative Code. (2) An employer shall not
be eligible to receive a safety council rebate eligibility rebate as set forth
in paragraph (B) of this rule if: (a) The employer is a self-insuring employer providing
compensation and benefits pursuant to section 4123.35 of the Revised
Code. (b) The employer is a state agency. (c) The employer is participating in a program designated as
incompatible with the rebate under rule 4123-17-74 of the Administrative
Code. (d) The employer is a
client employer of an alternate employer organization (AEO). (e) The employer is a
client employer of a professional employer organization (PEO), to the extent
the employer's payroll is reported to the bureau under the PEO's
workers' compensation policy. (3) An AEO or a PEO shall
not be eligible to receive a safety council rebate under this rule unless all
of the following requirements are met: (a) The AEO or the PEO, and each of the client employers of the
AEO or the PEO, meet all eligibility and program requirements. (b) The AEO or the PEO electronically submits affirmation that
the AEO or the PEO, and each of the client employers of the AEO or the PEO, has
enrolled in a local safety council as of July thirty-first of the applicable
program year. (c) The AEO or the PEO submits a list of each of the client
employers with whom it has an agreement as of May first of the applicable
policy year. (i) The list shall be
electronically submitted on a form prescribed by the bureau, and shall include
each client employer's name, address, federal tax identification number,
bureau of workers' compensation risk number; and the amount of payroll,
listed by manual class code, reported by the AEO or the PEO on behalf of each
client employer. (ii) If the bureau
determines the AEO or the PEO has manipulated the client list for purposes of
obtaining a safety council rebate under this rule, the AEO or the PEO shall not
be eligible to receive such rebate. (iii) The bureau shall
hold the list required under this paragraph as confidential pursuant to rule
4123-17-15.2 of the Administrative Code. (4) The forms and deadlines for meeting
the requirements of paragraphs (C)(3)(b) and (C)(3)(c) of this rule shall be
prescribed by the superintendent.
Last updated November 29, 2023 at 2:25 PM
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Rule 4123-17-57 | Premium for construction industry.
(A) As used in this rule: (1) As defined in
division (F)(3) of section 4123.34 of the Revised Code, "construction
industry" includes any activity performed in connection with the erection,
alteration, repair, replacement, renovation, installation, or demolition of any
building, structure, highway, or bridge. The classification codes satisfying
this definition are listed in paragraph (E) of this rule. (2) "Construction
industry employer" is an employer that reports payroll of a construction
industry employee for work performed in a construction industry classification
code as defined in paragraph (E) of this rule. (3) "Construction
industry employee" is any employee as defined in division (A) of section
4123.01 of the Revised Code who performs work and whose payroll is properly
reported in a construction industry classification code as defined in paragraph
(E) of this rule. (B) Pursuant to division (F) of section
4123.34 of the Revised Code, the administrator of workers' compensation
shall determine the premium rates for construction industry employees for
payroll paid beginning January 1, 1995, in accordance with the limitations
provided in this rule. (C) A construction industry employer
shall report the actual remuneration paid to its construction industry
employees, except that for payroll paid beginning January 1, 1995, the
reportable payroll shall not exceed on a weekly basis an amount as provided in
division (F) of section 4123.34 of the Revised Code. This limitation applies
only to the construction industry employees of the construction industry
employer, and does not apply to employees of a construction industry employer
whose payroll is not reported in a construction industry classification code as
defined in paragraph (E) of this rule. (D) The construction industry employer
shall maintain records to verify the weekly wages paid to construction industry
employees. The payroll limitation for construction industry employees shall
apply to weekly payroll, regardless of the hourly or daily remuneration. If
upon audit the construction industry employer is unable to document payroll
records of an employee on a weekly basis, the bureau of workers'
compensation shall establish the payroll by the actual remuneration for the
payroll reporting period, subject to the maximum limitation as provided in
division (F) of section 4123.34 of the Revised Code times the number of weeks
in the payroll reporting period. (E) The payroll limitation of this rule
shall apply only to the following construction industry classification codes of
a construction industry employer: all of the classification codes in industry
group four as provided in the credibility table used for experience rating,
table one, part B, of rule 4123-17-05 of the Administrative Code. The bureau
shall periodically review the classification codes satisfying the definition of
construction industry, and any reclassifications, changes, deletions, or
additions to the bureau's classification codes or industry groups may
result in additions or deletions of classification codes from this
rule. (F) The payroll limitation of this rule
shall apply to premium of the construction industry employer for construction
industry employees reported under the classification codes listed in paragraph
(E) of this rule. The payroll limitation also applies to the disabled
workers' relief fund assessment, and for such purposes the construction
industry employer shall report the remuneration of the construction industry
employees as provided in paragraph (C) of this rule. (G) For a construction industry employee
who is also an officer of a corporation, a sole proprietor, partnership, or
member of a family farm corporation, and whose payroll is subject to a payroll
limitation by rules 4123-17-07 and 4123-17-30 of the Administrative Code, any
additional payroll limitations of this rule also may apply. (H) If upon audit or reclassification of
payroll the bureau determines that the payroll of an employee has been
improperly classified in a construction industry classification code and the
new or proper classification code is not a construction industry classification
as defined in paragraph (E) of this rule, the bureau shall establish the
premium due based upon the full actual remuneration of the
employee.
Last updated July 2, 2024 at 11:37 AM
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Rule 4123-17-58 | Drug-free safety program (DFSP) and comparable program.
(A) Definitions. For purposes of this rule: (1) "AEO" and "PEO" have the same
meaning as defined in rule 4123-17-15 of the Administrative Code. (2) "Application deadline"
means the applicable deadline set forth in appendix A or in appendix B to rule
4123-17-74 of the Administrative Code. (3) "Client employer" has the
same meaning as defined in rule 4123-17-15 of the Administrative
Code. (4) "Comparable program" means
a program referred to in section 153.03 of the Revised Code. (5) "Drug-free safety program"
or "DFSP" means the bureau's loss prevention and safety program
to prevent and reduce the risk of workplace accidents and injuries attributed
to the use and abuse of alcohol and other drugs, including prescription,
over-the-counter, and illegal drugs. (6) "Program
period" means the policy year for which the employer elects to participate
in DFSP. (7) "Safety-sensitive position or
function" means any job position or work-related function or job task
designated as such by the employer, which through the nature of the activity
could be dangerous to the physical well-being of or jeopardize the security of
the employee, co-workers, customers or the general public through a lapse in
attention or judgment. (8) "Supervisor" means an
employee who supervises others in the performance of their jobs, has the
authority and responsibility to initiate reasonable suspicion testing and
recommend or perform hiring or firing procedures. (9) "Superintendent" means the
superintendent of the division of safety and hygiene or the
superintendent's designee. (B) Eligibility
requirements. (1) To receive benefits
under this rule, the employer must, as of the application
deadline: (a) Be current with respect to all payments due the bureau, as
defined in paragraph (A)(1)(b) of rule 4123-17-14 of the Administrative
Code; (b) Not have cumulative lapses in workers' compensation
coverage in excess of forty days within the twelve months preceding the
application deadline; (c) Be in an active policy status, which for purposes of this
rule, does not include a policy that is a no coverage policy or a policy that
is lapsed; and (d) Report actual payroll for the preceding policy year and pay
any premium due upon reconciliation of estimated premium and actual premium for
that policy year no later than the application deadline date set forth in rule
4123-17-74 of the Administrative Code. (2) The following employers shall not be
eligible for benefits under this rule: (a) State agencies; (b) Self-insuring employers providing compensation and benefits
pursuant to section 4123.35 of the Revised Code. (3) An AEO or a PEO shall
not be eligible to receive benefits under this rule unless the AEO or the PEO
and each of the client employers of the AEO or the PEO meet all eligibility and
program requirements. (4) An employer
determined to be ineligible for participation in the DFSP based on the
bureau's review of the employer's submitted application may appeal
such determination to the adjudicating committee pursuant to section 4123.291
of the Revised Code. (5) An employer that is
found to be ineligible for participation in the DFSP may reapply for a
subsequent program period. (C) Basic DFSP level. To implement a basic DFSP, an employer shall make
annual application to the bureau by the application deadline and implement the
program elements set forth in paragraphs (C)(1) to (C)(6) of this rule. The
requirements and timeframes for completion of each element shall be determined
by the superintendent. (1) Safety - The DFSP
shall include, but is not limited to the following: (a) Completing and submitting the bureau's online safety
assessment; (b) Ensuring each supervisor completes accident-analysis
training; and (c) Utilizing online accident-analysis reporting on the
bureau's website. (2) Policy - Employers
are required to put in place a written DFSP policy. (3) Employee education -
The DFSP shall include annual education for all employees. (4) Supervisor
skill-building training - The DFSP shall include annual training for all
supervisors in support of enforcing the employer's written DFSP policy and
procedures. (5) Drug and alcohol
testing - The DFSP program shall include alcohol and other drug testing which
conforms to the federal testing model promulgated by the United States
department of health and human services. The employer shall implement and pay
for testing required by DFSP participation but is not required to pay for
re-testing requested by an employee and follow-up testing. Testing shall occur
as specified by the bureau including, but not limited to the
following: (a) Pre-employment and new-hire drug testing; (b) Post-accident alcohol and other drug testing; (c) Reasonable suspicion alcohol and other drug testing;
and (d) Return-to-duty and follow-up alcohol and other drug
testing. (6) Employee assistance -
The DFSP shall include an employee assistance plan. (D) Advanced DSFP level. To implement an advanced DFSP, an employer shall
make annual application to the bureau by the application deadline and implement
the program elements set forth in paragraphs (D)(1) and (D)(2) of this rule.
The requirements and timeframes for completion of each element shall be
determined by the superintendent. (1) The employer shall
meet all of the requirements of a basic DFSP as provided in paragraph (C) of
this rule. (2) The employer shall do
all of the following: (a) Ensure that its written DFSP policy clearly reflects how
random drug testing will be implemented and how additional employee assistance
will be provided; (b) Ensure conducting fifteen per cent or higher random drug
testing of the employer's workforce each program period; (c) Pre-establish a relationship for, and pay the costs of, a
substance assessment of an employee who tests positive, comes forward
voluntarily to indicate he or she has a substance problem, or is referred by a
supervisor; (d) Timely submit a safety action plan based on the results of
the completed safety assessment which outlines specific safety process
improvements the employer intends to implement during the remainder of the
program period; (e) Commit to not terminate the employment of an employee who
tests positive for the first time, who comes forward voluntarily to indicate he
or she has a substance problem, or who is referred by a supervisor for an
assessment. (E) Comparable program. (1) Self-insuring
employers and state-fund employers not participating in the DFSP shall submit
an application for approval of a comparable program. (2) Prior to providing
labor services or on-site supervision of such labor services under a public
improvement project as defined in division (A)(9) of section 153.03 of the
Revised Code, employers participating in the comparable program
shall: (a) Develop, implement, and provide to all employees a written
substance use policy the written policy required by division (B)(2)(a) of
section 153.03 of the Revised Code; (b) Complete all employee education required by division
(B)(2)(d) of section 153.03 of the Revised Code; and (c) Complete all supervisor training required by division
(B)(2)(e) of section 153.03 of the Revised Code. (F) Progress reporting and renewal
requirements. (1) In order to qualify
for renewal, an employer shall have implemented all requirements of its basic
or advanced level DFSP by the implementation date specified by the
bureau. (2) The employer shall
submit an annual report detailing program implementation and reporting annual
statistics on a form provided by the bureau. The requirements and timeframes
for completion of the annual report shall be determined by the
superintendent. (a) If the employer is applying for renewal in the DFSP, the
annual report shall be deemed the employer's annual application, and the
employer shall identify which DFSP level is requested for the following program
period; (b) The employer shall provide any follow-up documentation
required by the bureau and shall maintain on-site statistics as required by the
bureau; (c) The report required by this section and any other information
submitted by the employer in meeting DFSP requirements shall be considered part
of the annual statement submitted to the bureau as required by section 4123.26
of the Revised Code. The bureau shall hold such information as confidential
pursuant to section 4123.27 of the Revised Code. (3) In conjunction with
the annual report required under paragraph (F)(2) of this rule, an AEO or a PEO
participating in the DFSP must submit a client employer list. (a) The list shall include all client employers with whom the AEO
or the PEO had an agreement as of thirty days prior to the filing deadline for
the annual report; (b) The list shall include each client employer's name,
address, federal tax identification number, bureau of workers'
compensation policy number; and the amount of payroll, listed by classification
code, reported by the AEO or the PEO on behalf of each client
employer; (c) If the bureau determines the AEO or the PEO has manipulated
the client list for purposes of obtaining benefits under this rule, the AEO or
the PEO shall not be eligible to receive such benefits; (d) The bureau shall hold the list required under this section as
confidential pursuant to section 4125.05 of the Revised Code. (G) The bureau may remove an employer
from participation in the DFSP for failure to fully implement a DFSP in
compliance with the approved program level requirements. The bureau shall send
written notice of cancellation to the employer. An employer removed from the
DFSP under this section may reapply for the DFSP for the next program period.
The bureau may deny the application based on circumstances of previous
participation. (H) An employer completing program
requirements may be eligible for a bonus equal to the amount identified in the
appendix to rule 4123-17-75 of the Administrative Code times the
employer's pure premium costs during the program period. To be eligible
for the bonus, an employer must report actual payroll due upon reconciliation
of estimated premium and actual premium for the program participation year no
later than the date set forth in rule 4123-17-14 of the Administrative Code. An
employer will be deemed to have met this requirement if the bureau receives the
payroll report and the employer pays premium associated with the payroll report
before the expiration of any grace period established by the administrator
pursuant to rule 4123-17-16 of the Administrative Code. Additional program
requirements for bonus eligibility shall be determined by the superintendent of
the division of safety and hygiene. (I) Participation in this program under
this rule is voluntary. Nothing contained in this rule shall affect, modify, or
amend any collective bargaining agreement or alter the rights or obligations of
an AEO, an employer, an employee, a client employer, a PEO, or a shared
employee under applicable federal or state law. Provisions of a collective
bargaining agreement that prevent implementation of program criteria will
preclude employer participation in the program. (J) Pursuant to section 4121.37 of the
Revised Code, the administrator may establish a grant program to offset, in
whole or in part, costs incurred by employers that implement a basic or
advanced DSFP and meet such grant program's eligibility
requirements.
Last updated February 28, 2022 at 3:46 PM
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Rule 4123-17-59 | Fifteen thousand dollar medical-only program.
(A) Any employer who is paying premiums
to the state insurance fund and whose coverage is in force may elect to
participate in the fifteen thousand dollar medical-only program as provided in
section 4123.29 of the Revised Code. No formal application is required;
however, an employer must elect to participate. Once an employer has elected to
participate in the program, the employer will be responsible for all bills in
all medical-only claims with a date of injury the same or later than the
election date, and the employer agrees to pay bills within thirty days of
receipt of the bill, unless the employer notifies the bureau of workers'
compensation within fourteen days of receipt of the notification of a claim
being filed that it does not wish to pay the bills in that claim, or the
employer notifies the bureau that the fifteen thousand dollar maximum has been
paid, or the employer notifies the bureau of the last day of service on which
it will be responsible for the bills in a particular medical-only
claim. (B) Employers may pay bills only on any
alleged medical-only injury. The provisions of this program and rule shall not
apply to claims in which an employer with knowledge of a claimed compensable
injury or occupational disease, has paid wages in lieu of compensation or total
disability. Payment of a bill by an employer does not waive the bureau's
right to adjudicate the claim, nor does it waive the employer's right to
contest the claim should a claim be filed. (C) This program in no way supersedes the
right of any injured worker to file a workers' compensation claim with the
bureau. (D) An employer or its agent may elect to
pay to the injured worker, or the provider on behalf of the injured worker, the
first fifteen thousand dollars of a medical-only claim. Employers may elect
which medical-only claims they do not wish to cover under this
program. (1) An employer electing
to pay bills in its employees' medical-only claims is responsible for all
bills in a claim until the fifteen thousand dollar maximum is reached and the
employer provides notice to the bureau that the employer has paid the first
fifteen thousand dollars of the bills in the claim by providing the bureau the
date of service of the bill which reached the fifteen thousand dollar maximum,
or the employer provides notice to the bureau that it no longer wishes to be
responsible for the bills in a particular claim by providing the bureau the
last date of service that it will pay. The bureau will process all related
bills received after the withdrawal notification date. (2) If the fifteen
thousand dollar maximum has not been reached and the payment of a bill will
exceed the fifteen thousand dollar maximum, the employer should pay that
portion of the bill that will bring the payment to the fifteen thousand dollar
maximum and inform the provider to bill the bureau for the remainder of the
bill. The employer should then notify the bureau that the first fifteen
thousand dollars has been paid, and provide proof of such payment and copies of
all bills paid, in the proper billing format, to the bureau. The bureau will
then be responsible for processing all future bills. (3) The employer cannot
elect to pay only certain bills for a claim and submit other bills in that
claim to the bureau for payment. (4) Once an employer has
elected to pay bills in medical-only claims under this program, the employer
must pay all bills under this program within thirty days of receipt of the
bill. The employer shall provide copies of the bills paid in the claim, in the
proper billing format, to the bureau and the injured worker or the injured
worker's representative upon request. Upon written request from the
bureau, the employer shall provide documentation to the bureau of all
medical-only bills that they are paying directly. Such requests from the bureau
may not be made more frequently than on a semiannual basis. Failure to provide
such documentation to the bureau within thirty days of receipt of the request
may result in the employer's forfeiture of participation in the program
for such injury. (E) An employer electing this program
must keep a record of the injury to include: name, address, and social security
number of the injured worker; date and time of injury; type of injury; part of
body injured; and a brief description of the accident. The employer also shall
keep a copy of all bills with proof and date of payment under this program.
This information will be made available to the bureau and the injured worker or
their representative upon request. The information must be kept on file for
five years from the last date a bill has been paid by the employer or the
information has been received by the bureau. (1) An employer in the
program must notify the bureau within fourteen days of a claim being filed of
the employer's intention not to cover the first fifteen thousand dollars
of the medical costs of the claim. (2) The bureau will
process all related bills in a filed medical-only claim in the normal manner
unless the employer has previously notified the bureau that it has elected to
participate in the fifteen thousand dollar program. (3) In those cases in
which the bureau has been properly notified by the employer of the
employer's intention to directly pay the bills, the bureau shall not pay
any bills submitted to the bureau directly from the provider but will notify
the provider that the bill should be submitted to the employer until the
provider is notified by the employer that the bureau is responsible for the
bills in the claim. No interest shall be paid by the bureau on account of bills
not paid within thirty days if such bills are the responsibility of the
employer. (4) All bills submitted
to the bureau or the employer for payment must be in the proper billing format
and must be received by the bureau or the employer within one year of the date
of service on the bill. (F) An employer electing this program has
the responsibility to notify the injured worker and medical provider, in
writing, of the acknowledgment of the alleged medical-only injury, that it has
elected under section 4123.29 of the Revised Code to pay the first fifteen
thousand dollars, that all bills should be submitted to the employer, and that
the injured worker and the bureau should not be billed. (1) Once an employer in
this program pays a bill on a work-related injury the bureau will not reimburse
that employer. (2) In the event that a
duplicate payment is made, the employer may request reimbursement of such bills
from the provider, and the provider shall reimburse the employer where the
bureau has paid the bill. (3) In the event that a
medical-only claim changes to a lost time claim, the bureau will not reimburse
the employer for bills that have been paid by the employer under this
program. (G) The employer shall pay all bills as
billed or agree upon an appropriate reimbursement level with the provider for
claims with a date of injury prior to June 30, 2009. Providers must accept the
bureau fee schedule as payment in full for claims with a date of injury on or
after June 30, 2009. A certified health care provider shall extend to an
employer who participates in this program the same rates for services rendered
to an employee of that employer as the provider bills the administrator of
workers' compensation for the same type of medical claim processed by the
bureau and shall not charge, assess, or otherwise attempt to collect from an
employee any amount for covered services or supplies that is in excess of that
rate. Providers may only balance bill the bureau on the occasion of a bill that
would require an employer to exceed the fifteen thousand dollar maximum. The
bureau will not mediate fee disputes between the employer and the provider. If
an employer elects to enter the program and the employer fails to pay a bill
for a medical-only claim included in the program, the employer shall be liable
for that bill and the employee for whom the employer failed to pay the bill
shall not be liable for that bill. (H) Payments made by the employer in this
program will not be charged to that employer's experience modification;
however, if a claim has been filed with the bureau and bills paid by the
bureau, these payments will be included in the employer's experience
modification. The bureau will not adjust the employer's experience
modification to remove such payments unless the employer has complied with this
rule and the bureau has made such payments in contravention of this rule.
Failure by an employer to make timely payments on all bills will not affect the
coverage of that employer and will not obligate the bureau to pay interest to
the medical provider; however, the bureau may exclude employers who do not make
timely payment on all bills in this program from participation in this program.
An employer may appeal a decision of the bureau excluding the employer from
this program to the adjudicating committee under rule 4123-14-06 of the
Administrative Code. (I) An employer who elects to participate
in this program may cancel its participation in the program at any time by
notifying the bureau. The bureau will process all related bills in all
medical-only claims against that employer's account after the date of the
notification.
Last updated July 2, 2024 at 11:38 AM
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Rule 4123-17-60 | Annuity factors.
Effective:
January 1, 2021
The administrator of workers' compensation, with
the advice and consent of the bureau of workers' compensation board of
directors, has authority to approve contributions made to the state insurance
fund by employers pursuant to sections 4121.121, 4123.29, and 4123.34 of the
Revised Code. The administrator hereby establishes annuity factors for use in
establishing claims reserves and premium rates as indicated in appendixes A, B,
C, D, and E to this rule. The basis and interest factor of each annuity factor
table is indicated on the appendix.
View AppendixView AppendixView AppendixView AppendixView Appendix
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Rule 4123-17-61 | Criteria for group experience rating.
(A) The administrator of workers'
compensation shall offer a plan that groups employers for rating purposes.
Individual employers shall retain their separate risk identity but shall be
pooled and grouped for experience rating purposes only. (B) In establishing a group for group
experience rating purposes, the sponsoring group organization or individual
employers in the group must satisfy all of the following requirements and must
meet all the sponsorship rules as provided in rule 4123-17-61.1 of the
Administrative Code: (1) All of the individual
employers within the group must be governing members of the sponsoring
organization or the affiliate organization. (2) An individual
employer must have a policy in good standing with the bureau of workers'
compensation. "Policy in good standing" means the individual employer
is current on all payments due to the bureau and is in compliance with bureau
laws, rules, and regulations at the time of enrollment or
reenrollment. (3) The employers' business in the
organization must be substantially similar such that the employers which are
grouped are substantially homogeneous. A group shall be considered
substantially homogeneous if the main operating classification codes of the
employers as determined by the premium obligations for the rating year
beginning two years prior to the coverage period are assigned to the same or
similar industry groups, as determined by appendix A to rule 4123-17-05 of the
Administrative Code. Industry groups seven and nine as well as eight and nine,
and industry groups two and four as well as four and six, are considered
similar. (a) The bureau may allow an individual employer to move to a more
homogeneous group, after September thirtieth for private employer groups and
March thirty-first for public employer taxing district groups but before the
first day of the policy year, if the individual employer: (i) Is without a full year of recorded premium; (ii) Is reclassified as a result of an audit; or (iii) Fully or partially combines with another
employer. (b) An individual employer member of a continuing group who
initially satisfied the homogeneous requirement shall not be disqualified from
participation in the continuing group for failure to continue to satisfy such
requirement. (4) The group of employers must consist
of at least one hundred individual members or a group where the aggregate
workers' compensation premiums of the members are, as determined by the
administrator, expected to exceed one hundred fifty thousand dollars during the
policy year for which the application for group rating is made. (5) As of the deadline for application
for group experience rating set forth in appendix A and in appendix B to rule
4123-17-74 of the Administrative Code, each individual employer seeking to
enroll in a group for workers' compensation coverage must meet the
following requirements: (a) The individual employer must be current with respect to all
payments due the bureau, as defined in paragraph (A)(1)(b) of rule 4123-17-14
of the Administrative Code; (b) The individual employer must be current on the payment
schedule of any part-pay agreement into which it has entered for payment of
premiums or assessment obligations; (c) The individual employer cannot have cumulative lapses in
workers' compensation coverage in excess of forty days within the prior
twelve months; and (d) The individual employer must report actual payroll for the
preceding policy year and pay any premium due upon reconciliation of estimated
premium and actual premium for that policy year. (6) New employers
electing to apply for group experience rating program. (a) The following definitions apply to this
rule, (i) "New
employer" means an employer creating one or more jobs in the state of Ohio
for which any of the following is true: (a) The employer is a new
business entity made amenable to Ohio workers' compensation laws by such
job creation; or (b) The employer is an
out of state employer that has not had prior operations in Ohio and has not had
prior workers' compensation insurance coverage in Ohio. (ii) "Initial rating
year" means the rating year including the date on which the new
employer's Ohio workers' compensation coverage becomes effective.
(b) If a new employer elects to apply for the group
experience rating program under this rule, the administrator shall waive the
application deadlines set forth in appendix A and appendix B to rule 4123-17-74
of the Administrative Code and allow the new employer to apply for the group
experience rating program. (i) To apply for the
group experience rating program, the new employer must file an AC-26 form for
the group with the sponsoring organization. (ii) Upon receipt of an
AC-26 form from a new employer, a sponsoring organization shall: (a) Not permit a new
employer to participate in a group unless the new employer meets homogeneity
requirements set forth in paragraph (B)(3) of this rule: (b) Notify the bureau of
the addition of a new employer to the group within thirty days of the date the
bureau assigns a policy number to the new employer; and (c) Electronically submit
to the bureau a new employer's AC-26 form with a statement identifying the
group in which a new employer is being placed for the new employer's
initial rating year. (iii) For new employers
electing to participate in the group experience rating program between the
twenty-ninth day before the applicable group experience rating deadline. as set
forth in appendix A and appendix B of rule 4123-17-74 of the Administrative
Code. and the last day of the initial rating year. inclusive. the sponsoring
organization shall, within thirty days of the date the bureau assigns a policy
number to the new employer, and in addition to the requirements of paragraph
(B)(6)(b)(ii) of this rule, submit to the bureau a statement identifying the
group in which the new employer is being placed for the rating year immediately
following the new employer's initial rating year. (c) The new employer's participation in the group
experience rating program in rating years subsequent to the initial rating year
for which the new employer was admitted to a group pursuant to the
administrator's waiver in paragraph (B)(6)(b) of this rule is subject to
all requirements for participation in the group experience rating program set
forth in rules 4123-17-61 through 4123-17-68 of the Administrative Code.
(7) Cancellations, transfers, and
combinations. (a) An individual employer whose coverage status becomes
cancelled or combined during the rating year may not continue to participate in
group experience rating. The effective date of the removal from the group
experience rating program shall be on the first day of the next policy year,
unless the date of cancellation or combination is determined to be the first
day of the policy year, in which case the individual employer shall be removed
from group as of the actual date of cancellation or combination. An individual
employer who becomes active and obtains coverage after the group experience
rating application deadline may not participate in group experience rating for
that year except as defined in rule 4123-17-66 of the Administrative
Code. (b) An individual employer that obtains initial coverage after
the group experience rating application deadline as set forth in appendix A and
in appendix B to rule 4123-17-74 of the Administrative Code and for which a
transfer of experience is indicated under rule 4123-17-02 of the Administrative
Code may not participate in group experience rating for that year except as
defined in rule 4123-17-66 of the Administrative Code. (8) Payroll reporting and premium
reconciliation. An individual employer must report actual payroll for the
preceding policy year and pay any premium due upon reconciliation of estimated
premium and actual premium for that policy year no later than the date set
forth in rule 4123-17-14 of the Administrative Code. An individual employer
will be deemed to have met this requirement if the bureau receives the payroll
report and the employer pays premium associated with the payroll report before
the expiration of any grace period established by the administrator pursuant to
paragraph (B) of rule 4123-17-16 of the Administrative Code. (a) An individual employer removed from group experience rating
for failure to meet these criteria will be rerated for the full policy year at
the individual employer's base-rate or experience-modified rate as
determined by their expected losses for the policy year. (b) The group shall retain, for the policy year, the experience
of any employer removed from group experience rating for failure to meet these
criteria. (C) In providing employer group plans
under section 4123.29 of the Revised Code, the bureau shall consider an
employer group as a single employing entity for purposes of group experience
rating. No employer may be a member of more than one group for the purpose of
obtaining workers' compensation coverage.
Last updated July 2, 2024 at 11:38 AM
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Rule 4123-17-61.1 | Sponsorship certification requirements.
(A) The following certification requirements shall apply to all sponsoring organizations that seek to make application for either the group rating plan, as provided for in rule 4123-17-61 of the Administrative Code, or the group retrospective rating plan as provided in rule 4123-17-73 of the Administrative Code, known collectively as group programs. (B) The sponsoring organization must have been in existence for at least two years prior to the last date upon which the group's application for coverage may be filed with the bureau of workers' compensation as provided in rule 4123-17-62 of the Administrative Code. (C) The organization must be formed for a purpose other than that of obtaining group workers' compensation coverage. The bureau shall require the organization to demonstrate this through submission of required evidence and documentation. As long as all of the other criteria of this rule are satisfied, a parent corporation may be a sponsoring organization and, if it qualifies under the criteria of this rule, a member of a group of its subsidiary corporations for purposes of group programs. A sponsoring organization may sponsor more than one group. (D) The formation and operation of a group program in the organization must substantially improve accident prevention and claims handling for the employers in the group. The bureau shall require the group to document its plan or program for these purposes, and, for groups reapplying annually for group coverage, the results of prior programs. Following the conclusion of each policy year, the bureau will report annually on the aggregate performance of all groups. (E) A sponsoring organization shall satisfy all of the requirements for a sponsoring organization as required under section 4123.29 of the Revised Code and in this rule. A sponsoring organization shall submit to the bureau information to demonstrate that the organization meets the requirements for sponsorship. The bureau shall review the information and shall register the sponsoring organization if it meets the requirements. A sponsoring organization shall be registered and be certified by the bureau prior to marketing to or soliciting employers for membership in a group under the group programs. (1) .Once the bureau certifies a sponsoring organization, the sponsoring organization shall be permitted to sponsor a group retrospective rating program under rule 4123-17-73 of the Administrative Code, as well as groups in the current group experience rating program under this rule beginning the next rating year. The bureau shall review the certification of a sponsoring organization at least once every three years or on a more frequent basis as determined by the bureau. (2) A sponsoring organization that seeks to be certified by the bureau shall provide to the bureau the following: (a) The sponsoring organization's workers' compensation policy number and proof of active workers' compensation coverage; (b) The name of the sponsoring organization's third party administrator, if applicable; (c) A copy of the sponsoring organization's marketing materials (web site, brochures, etc.), including a description of the services related to group rating as well as other services provided by the sponsor; (d) A list of all sponsoring organizations affiliated with the sponsoring organization. For the purpose of this rule, an "affiliated" organization is an organization in which members are brokered, borrowed, shared, or co-opted for inclusion in the certified sponsoring organization's group. All affiliated organizations are required to be certified sponsors as provided in this rule. (e) A copy of the sponsoring organization's articles of incorporation; (f) A copy of the sponsoring organization's mission statement; (g) A completed application form, signed by the sponsor, which includes disclosure of nine-hundred-ninety filings with the Internal Revenue Service and counts of all members (both group and non-group); (h) A copy of the sponsor's safety plan. (i) With reasonable notice, the bureau may request that a sponsor provide for the bureau's inspection at the sponsor's designated location any of the following: additional financial information, dues structure, revenue sources, a table of organization, a comprehensive membership roster, by-laws, and/or a list of corporate officers. (F) The sponsoring organization shall provide to the bureau a signed statement certifying the accuracy of the information provided to the bureau. A sponsoring organization's failure to provide accurate information or submission of false information may be grounds for the bureau to refuse to certify the sponsoring organization or to decertify the sponsoring organization. The bureau reserves the authority to use all the listed information above and any other information available to make the certification approval. (G) Should the bureau deny the certification of the sponsoring organization, the applicant may appeal to the bureau adjudicating committee. After exhausting all administrative appeals and correction of sponsorship requirement deficiencies, the applicant may reapply one year after the latest certification denial. (H) The bureau will collect this information and retain it or ask that a sponsoring organization maintain the information for bureau inspection upon request. (I) The sponsoring organization shall be in compliance with all bureau rules. A sponsoring organization's non-compliance may result in decertification. (J) The sponsoring organization, or their authorized representative, shall have the capability to send and receive secure electronic (FTP - file transfer protocol) files. (K) Group marketing. (1) A sponsoring association, affiliate, or representative, including, but not limited to, a third-party administrator, broker, or marketer may not offer a discount to either a private or public employer either seeking to participate in a group-experience rating plan or that exceeds the combined result of the lowest experience modifier and its associated break-even factor for the future policy year until those factors are approved by the bureau's board of directors. Those parties also may not provide marketing material that is either false or unattainable relating to the process of forming groups under the group-retrospective rating plan for a future policy year. Prohibited marketing material under this rule is any communication that: (a) Instructs prospective participants to provide false information on forms used for purposes of group formation, including the AC-3, the AC-26, and the U-153. (b) Claims the sponsoring association, affiliate, or representative is endorsed by the bureau or the state of Ohio. (c) Offers or estimates specific discounts or refunds that are unattainable to prospective participants in either group-experience rating or group-retrospective rating. (i) For group-experience rating, "unattainable" is defined as exceeding the maximum discount when combining the lowest experience modifier and its associated break-even factors as approved by the bureau of workers' compensation board of directors. (ii) For group-retrospective rating, "unattainable" is defined as quoting a specific refund amount that exceeds the maximum possible refund when considering the basic premium factor for the maximum premium ratio selected as approved by the bureau of workers' compensation board of directors. (2) The bureau may apply the following sanctions upon its determination of a violation of this rule: (a) For a violation of paragraph (K)(1)(c) of this rule the bureau may place that group sponsor at capacity for the an upcoming policy year. (i) For sponsors that filed group rosters with the bureau for the policy year, "capacity" is defined as prohibiting a sponsoring association from exceeding the total number of employers in their current or most recent groups, adding new employers for groups they may form in the policy year of the sanction, and affiliating with any other group sponsors for the policy year of the sanction. (ii) For sponsors that have not filed group rosters with the bureau for the current policy year, "capacity" means they will not be able to form groups and cannot affiliate with other group sponsors for the upcoming policy year. (b) For a violation of paragraph (K)(1)(a) or (K)(1)(b) of this rule, along with any action that results in knowingly falsifying information on forms submitted to the bureau, the bureau shall immediately revoke the sponsor's certification for the upcoming policy year. (3) The bureau will provide the bureau of workers' compensation board of directors a report by no later than the April board meeting each year regarding sanctions rendered under this paragraph and corrective actions taken by the bureau with respect to this rule.
Last updated June 7, 2024 at 1:35 PM
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Rule 4123-17-62 | Application for group experience rating.
(A) Sponsoring organization
requirements. (1) A sponsoring
organization shall make annual application for group experience rating by
submitting an employer roster for group rating plan (AC-25) for each group it
sponsors. Each AC-25 shall: (a) Be signed each year by an officer of the sponsoring
organization to which the members of the group belong; (b) Identify each individual employer to be included in the group
policy year for which the group application is made; and (c) Identify whether, in the previous policy year, each employer
was: (i) Enrolled in the same
group, (ii) Not enrolled in the
same group, but enrolled in a different group sponsored by the sponsoring
organization, or (iii) Not enrolled in the
same group, and not enrolled in a different group sponsored by the sponsoring
organization. (2) In the manner
specified by the bureau of workers' compensation, the sponsoring
organization shall annually identify all employers that were enrolled in the
group in the previous policy year but are not enrolled in the group for the
policy year for which the current application is made and specify whether the
employer is enrolled in another group of the same sponsoring
organization. (3) The bureau may
request from individual employers or the sponsoring organization any additional
information necessary for the bureau to rule upon the application for group
experience rating. Failure or refusal of the sponsoring organization to provide
the requested information in the manner requested by the bureau shall be
sufficient grounds for the bureau to reject the application and refuse the
group's participation in group experience rating. (4) A sponsoring
organization's application for group experience rating is effective for a
single policy year. Continuation of a group for subsequent years requires
timely filing of an application on a yearly basis and meeting eligibility
requirements set forth in rule 4123-17-61 of the Administrative
Code. (B) Employer requirements. An employer electing to participate in group
experience rating must file an application for group rating (AC-26) with the
sponsoring organization of the group in which the employer seeks to
participate. If the sponsoring organization elects to include the employer in
its group, the sponsoring organization must file the AC-26 form electronically
with the bureau by the group experience rating application deadline set forth
in the appendices to rule 4123-17-74 of the Administrative Code. (1) An employer's
AC-26 shall remain in effect for all subsequent policy years when the employer
remains in the same group or another group sponsored by the same sponsoring
organization. (2) The employer must
file an AC-26 if the employer applies for group experience rating with a
different sponsoring organization or was not group-experience rated in the
previous rating year. (3) When an employer files a new AC-26 or
multiple AC-26 forms during the application period, the latest-filed AC-26
shall establish the employer's intentions for group experience rating. The
employer's AC-26 shall remain effective until any of the following
occurs: (a) The employer timely files a subsequent AC-26 indicating the
desire to participate in a group with a different sponsor for the upcoming
policy year; (b) The sponsoring organization for the group does not include
the employer on the group roster (AC-25); (c) The group does not reapply for group experience rating or is
rejected for failure to meet group eligibility requirements; or (d) The employer fails to meet individual eligibility
requirements set forth in paragraph (B) of rule 4123-17-61 of the
Administrative Code. (C) For private employers, the sponsoring
organization shall file applications on or before the date identified in
appendix A to rule 4123-17-74 of the Administrative Code. For public employers,
the sponsoring organization shall file applications on or before the date
identified in appendix B to rule 4123-17-74 of the Administrative
Code. (1) Except as provided in
paragraph (B)(6) of rule 4123-17-61 of the Administrative Code, the sponsoring
organization may not add an employer to a group after the application deadline.
The sponsoring organization will be permitted to correct a clerical error that
results in an employer being omitted from a group roster if: (a) The sponsoring organization has made an error in reporting
the name or policy number of the employer on the sponsoring organization's
AC-25; or (b) The sponsoring organization included the employer on the
sponsoring organization's AC-25 but failed to file the employer's
AC-26 with the bureau prior to the application deadline. The sponsoring
organization must provide sufficient documentation, as determined by the
bureau, that the employer timely filed its AC-26 with the sponsoring
organization. (2) A sponsoring
organization that has applied for group experience rating may not voluntarily
terminate the application during the bureau's evaluation
period. (3) Any changes to the
sponsoring organization's original application must be filed in a manner
prescribed by the bureau prior to the application deadline. Any rescissions
made must be completed in writing and signed by an officer of the sponsoring
organization to which the members of the group belong. Any changes received by
the bureau after the application deadline will not be honored. The latest
application form or rescission received by the bureau prior to the application
deadline will be used to determine the premium obligation for the
group. (D) A sponsoring organization shall notify an employer that is
participating in a group of that sponsoring organization if the employer will
not be included in a group by that sponsoring organization for the next rating
year. (1) For private employer
groups, the sponsoring organization shall notify the employer in writing prior
to the last business day of October of the year of the group application
deadline set forth in appendix A to rule 4123-17-74 of the Administrative
Code. (2) For public employer
taxing district groups, the sponsoring organization shall notify the employer
in writing prior to the last business day of April of the year of the group
application deadline set forth in appendix B to rule 4123-17-74 of the
Administrative Code. (3) If an employer
notifies the bureau that a sponsoring organization has not complied with this
paragraph, and the sponsoring organization fails to prove that the notice was
provided in a timely manner, the bureau will, without the approval of the
sponsoring organization, allow the employer to remain in the group for the
rating year for which the notice was required. If that group no longer exists
the bureau will, without the approval of the sponsoring organization, place the
employer in a homogeneous group with the same sponsoring organization or take
other appropriate action. (E) When the bureau determines that individual employers in a
proposed group do not meet the eligibility requirements set forth in rule
4123-17-61 of the Administrative Code, the bureau will notify the individual
employers and the sponsoring organization of its determination. The sponsoring
organization may continue in its application for group coverage without the
disqualified employers, but the group must meet minimum requirements of rule
4123-17-61 of the Administrative Code. (F) A sponsoring organization may request that an employer be
removed from its group for a gross misrepresentation made on the
employer's application to the group. (1) "Gross
misrepresentation" is an act by the employer that would cause financial
harm to the other members of the group, and is limited to any of the
following: (a) The sponsoring organization discovers that the employer
applicant for group experience rating has recently merged with one or more
entities without disclosing such merger on the employer's application for
membership in the group, and such merger adversely affects the experience
modification (EM), as defined in rule 4123-17-03 of the Administrative Code, of
the group. (b) The sponsoring organization discovers that the employer
applicant for group experience rating has failed to disclose the true nature of
the employer's business pursuit on its application for membership in the
group, and this failure adversely affects the EM of the group. (2) Requests for removal
of an employer pursuant to this paragraph must be submitted within thirty days
of the bureau's notification to the sponsoring organization that a rate
adjustment has occurred. The sponsoring organization must notify the employer
of its request to remove the employer from the group for gross
misrepresentation. (3) The sponsoring
organization must provide sufficient documentation, as determined by the
bureau, to support its request to remove an employer from a group. (4) The employer shall be
removed from the group only with the bureau's approval.
Last updated July 2, 2024 at 11:39 AM
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Rule 4123-17-63 | Eligibility for group experience rating-size criteria.
(A) To be eligible for group experience
rating, the group taken as a whole must include at least one hundred employers,
each employer being identified as a separate employer for state fund
identification purposes, or the group taken as a whole must be of sufficient
size that the premiums of the members, as determined by the administrator of
workers' compensation, are expected to exceed one hundred fifty thousand
dollars during the coverage period, except as provided by paragraph (C) of this
rule. The administrator may determine the aggregate premium of the members
based upon the historical premium experience of the members, projected payroll,
and anticipated premium rates. The evaluation period for determining aggregate
premium shall be the rating year beginning two years prior to the coverage
period. (B) For a group of less than one hundred
members, the premium requirement shall be deemed to have been satisfied if the
aggregate premium to the state insurance fund for the members of the group for
the rating year beginning two years prior to the coverage period exceeded one
hundred fifty thousand dollars, except as provided by paragraph (C) of this
rule. Failure to reach one hundred fifty thousand dollars in premium during the
coverage period shall not negate the group coverage. (C) The bureau of workers'
compensation shall calculate the premium based upon the actual experience
modified premium of the member employers during the evaluation period,
including any modification due to group rating. The administrator may waive the
requirement that premiums exceed one hundred fifty thousand dollars during the
coverage period for a continuing group of substantially similar membership if
the sole reason that the premium fails to exceed one hundred and fifty thousand
dollars is due to the premium modification discounts earned by the group as a
direct result of safety operations of the group rating program, and not due to
other factors, such as a departure of members from the group or a reduction in
payroll for members of the group.
Last updated July 2, 2024 at 11:39 AM
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Rule 4123-17-64 | Group experience rate calculations.
(A) A group meeting all the requirements
for group rating shall be considered as a single employing entity for purposes
of group experience rating. The eligibility of data for use in the group shall
be the same as the eligibility of data for use in the individual
employer's rate calculation. Credibility limits and all factors based upon
credibility will apply at the group level. For catastrophe claims, the
definition of a catastrophe under paragraph (A) of rule 4123-17-12 of the
Administrative Code must be satisfied by an individual employer in the group to
be eligible for catastrophe claim cost relief, although more than one
individual employer in the group may qualify for catastrophe relief from the
same catastrophe occurrence. Disability relief charges to surplus shall be
applied at the group level. (B) All operations or classification
codes of an employer electing group rating are subject to group experience
rating. (C) Except with respect to mergers or
transfers of the operations of a business, an employer's experience may be
combined once during a policy year to create an experience modification for
multiple employers grouped together for experience rating
purposes. (D) Employers participating in a group
rating plan may implement the drug-free safety program. (E) An employer that is in a cancelled
coverage status, for at least one full rating year as of the date that the
experience modification of a group of which it had been a member is
recalculated, will not be liable for any obligation, nor will such employer
receive the benefit of any credit, associated with the
recalculation.
Last updated April 2, 2024 at 9:08 AM
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Rule 4123-17-65 | Experience retention for group experience rate calculation purposes.
If an individual employer is a member of a group
for group experience rating and leaves the group, the experience of that
individual employer shall be used in experience-rating calculations for the
group to impact only the rating years that the employer was a member of the
group. The individual employer leaving the group retains its own experience
rating incurred while a member of the group for the balance of the standard
experience period. The group shall not be liable for claims experience incurred
by an individual employer for claims occurring after the employer has left the
group.
Last updated July 2, 2024 at 11:40 AM
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Rule 4123-17-66 | Termination and transfers for group experience rating.
This rule on termination and transfer of group
experience rating shall apply at the group level after the bureau of
workers' compensation applies the applicable individual rules on transfer
of experience. (A) A group formed for the purpose of
group experience rating may not retroactively include experience in a plan,
exclude experience from a plan, or voluntarily terminate a plan during the
policy year. A change in the name of the group will not constitute a new group.
A change of the organization sponsoring a group or moving a group to a new
sponsoring organization shall constitute a new group and the members of the new
group must meet the homogeneity requirement of paragraph (B)(3) of rule
4123-17-61 of the Administrative Code. A group will be considered a continuing
group if more than fifty per cent of the members of the group in the previous
rating year are members of the group in the current rating year. (B) Successor: Files petition for
bankruptcy Predecessor: No predecessor An individual employer which is a member of a
group for the purpose of experience rating and which becomes a
debtor-in-possession during the policy year shall remain a member of the group
for the entire policy year. (C) Successor: Entity not having
coverage Predecessor: Group rated with employees and
reported payroll Where one legal entity not having coverage in the
most recent experience period wholly or partially succeeds another legal entity
in the operation of a business, and the predecessor entity was a member of a
group for experience rating, the successor shall be considered a member of the
group, and the successor entity's rate shall be based on the group's
experience, as long as the successor employer is homogeneous to the group. For
a partial transfer, the effective date of the group experience transfer shall
be on the first day of the next payroll reporting period (January first or July
first). (D) Successor: Group rated Predecessor: Experience rated (either
individually or in a different group), or non-group base rated Where a legal entity having established coverage
is a member of a group for experience rating and wholly succeeds another legal
entity, the successor entity shall remain a member of the group for experience
rating, and the experience of the predecessor shall be included with the
experience of the group for the purpose of experience rating. (E) Successor: Non-group
rated Predecessor: Group rated Where a legal entity having established coverage
is a member of a group for the purpose of experience rating and is wholly
succeeded by another legal entity which is not a member of the group, the
successor entity shall not become a member of the group. (F) Successor: Group rated Predecessor: Group rated Where a legal entity which is a member of group
for the purpose of experience rating wholly succeeds another legal entity which
is also a member of the same group for the purpose of experience rating, the
successor entity shall remain a member of the group for the purpose of
experience rating. (G) Successor: Group rated Predecessor: Self-insured When an individual employer which has returned to
the state insurance fund from self-insured status and has used the self-insured
experience in calculating the experience rate becomes a member of a group for
the purpose of experience rating, the self-insured experience shall be included
in the experience of the group for experience rating purposes. Upon returning
to the state insurance fund the employer shall provide the bureau with a
payroll, a list of all claims incurred while the employer was self-insured, all
payments made with respect to those claims, and any additional information
required by the bureau to calculate the employer's experience. (H) Successor Group rated Predecessor: Non-group rated Where a legal entity succeeds in the operation of
a portion of a business of another legal entity and the successor entity is a
member of a group for experience rating, the successor entity shall remain a
member of the group for experience rating, and the experience of the
predecessor shall be included with the experience of the group for the purpose
of experience rating. The effective date of the group experience transfer shall
be on the first day of the next payroll reporting period (January first or July
first). (I) Successor: Non-group
rated Predecessor: Group rated Where a legal entity having established coverage
succeeds in the operation of a portion of a business of another legal entity,
and the successor entity is not a member of a group and the predecessor is a
member of a group for experience rating, the successor entity will not become a
member of the group for experience rating, and the predecessor will remain a
member of the group. (J) Successor: entity not having
coverage Predecessor: Group rated with no employees and no
reported payroll Where one legal entity not having coverage in the
most recent experience period wholly or partially succeeds another legal entity
in the operation of a business, and the predecessor entity was a member of a
group for experience rating, the successor entity shall not become a member of
the group unless and until the entity applies for membership in the group in
the next experience period. (K) When any combination or transfer of
experience is indicated, the effective date of such combination or transfer
shall be the beginning date of the next following payroll reporting period. In
cases where an entity not having coverage wholly succeeds another entity, the
effective date shall be the actual date of succession. (L) An individual employer which is a
member of a group for the purpose of experience rating may not participate in a
retrospective rating plan during the policy year in which the employer is a
member of the group.
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Rule 4123-17-67 | Representation for group experience rating.
(A) A group that has been established and
has been accepted by the bureau of workers' compensation for the purpose
of group experience rate calculation shall have no more than one permanent
authorized representative for representation of the group and the individual
employers of the group before the bureau and the industrial commission in any
and all employer-related matters pertaining to participation in the state
insurance fund. (B) The selection of an authorized group
representative must be made by submission of a completed form AC-24, and any
change or termination of the authorized group representative can be made only
by a subsequent submission of form AC-24. Only an officer of the group may sign
an AC-24. (C) Notwithstanding the provisions of
paragraph (A) of this rule, an individual employer in a group may retain the
services of an attorney or other authorized representative for claims-related
matters, such as representation at claims hearings before the bureau and the
industrial commission, through submission of the appropriate authorization for
representation in such individual claim files. The bureau will recognize only
one authorized representative for notice and appeal purposes.
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Rule 4123-17-68 | Group experience and group retrospective safety program requirements.
(A) The purpose of this rule is to establish minimum safety requirements for group experience and group retrospective rating as provided by section 4123.29 of the Revised Code. (B) The bureau safety and hygiene division, upon the request of the sponsoring organization, shall provide assistance with implementing all of the provisions of this rule. (C) The primary or affiliated sponsoring organization of a group experience or group retrospective plan shall document its program to improve accident prevention and claims handling for the members in the group with the group application, and, for an existing group reapplying for group coverage annually, shall document the effectiveness of prior programs and any proposed improvements to these programs. This analysis shall include identification of the most common injuries among group members and strategies aimed at increasing awareness and prevention of these injuries. (1) A bureau division of safety and hygiene loss prevention representative shall review the sponsor's safety requirements annual report within sixty days of receipt. The safety and hygiene representative shall contact the primary or affiliated group sponsor or its authorized representative to assist in further developing appropriate safety strategies if there are deficiencies in the report. All primary and affiliated sponsoring organizations shall be required to sponsor a minimum of eight hours of safety training during the rating year for members of their group. Training shall be hosted by the sponsor or the sponsor's third party administrator. Training should be designed in increments of at least two hours. Training should be industry specific where possible. Webinars and online training hosted by the sponsor will qualify to fulfill this requirement. The sponsor must document the number of employers in attendance at safety training with a goal of at least fifty per cent membership attendance. If the same agenda is offered repeatedly in different regional sites, hour to hour credit will be granted. A bureau representative may attend training to ensure the requirement is being met. (2) If an employer that participates in group rating or group retrospective rating plan sustains a claim within the "green period," the employer shall complete either of the following: (a) The bureau's online accident analysis form and the bureau's associated online safety class, or (b) Two hours of safety training approved by the bureau. Such training can be offered by the sponsoring organization, the sponsoring organization's third party administrator, or the bureau. The sponsor will notify members of this requirement and maintain recordkeeping to track completion of this requirement. The sponsor will submit to the bureau a list of members completing the training required by this rule. The bureau shall reserve the right to request additional information from the sponsor to ensure compliance. (3) The bureau safety and hygiene division shall make a recommendation to the bureau employer programs unit on whether the group's safety requirements annual report is acceptable for the following policy year. A copy of the recommendations and findings of the safety and hygiene division shall be communicated to the sponsoring organization or its authorized representative at the same time. The employer programs unit shall consider this recommendation in making its decision whether to approve the group rating application and at the time of sponsor recertification. (4) The bureau safety and hygiene division shall evaluate the sponsor's safety requirements annual report at the sponsoring organization level and not at the individual member level. The bureau safety and hygiene safety representative may conduct member visits to confirm the sponsoring organization requirements are met. (5) If the bureau's employer programs unit does not approve a group for group rating based upon the sponsor's safety activities, the sponsoring organization may request a hearing before the adjudicating committee pursuant to rule 4123-14-06 of the Administrative Code. (6) Primary and affiliated sponsoring organizations shall publish in the first quarter of the rating year, for the knowledge of the members in their group, a safety accountability letter outlining the group rating safety requirements and responsibilities of all associated parties. (D) The sponsoring organization shall provide information regarding safety resources to members in their group. Communication and education strategies of the sponsoring organization may include use of the following strategies: web sites, webinars, claims review and analysis, newsletters, seminars, professional consultants, videos, personal contact, brochures, booklets, manuals, identifying key personnel and training in safety management for the sponsoring organization staff and/or its members. The bureau safety and hygiene division representative will be added to all member distribution lists to monitor safety education activity. (E) Linkage of the group-sponsoring organization with the division of safety and hygiene may include the following strategies: (1) The bureau shall link each sponsoring organization with a service representative from safety and hygiene. (2) Safety and hygiene shall assist the group with its development of safety strategies. (3) Safety and hygiene and the sponsoring organization may sponsor joint seminars. (4) The safety and hygiene representative shall provide a list of resources and expertise within each region upon request. (5) The sponsoring organization shall promote bureau safety and hygiene services to its members. (6) Safety and hygiene may provide training sessions and written safety and health materials. (7) Bureau safety and hygiene division consultation services may be utilized by member companies for customized safety management assistance. (8) Safety and hygiene and the sponsoring organization may develop joint programs in response to member needs. (F) The division of safety and hygiene shall schedule annual regional training seminars for sponsoring organizations. Each sponsoring organization must send at least one representative to the seminar. Additionally, the division of safety and hygiene shall develop a list of publications and support materials that assist the sponsoring organization in reinforcing the safety guidelines of this rule.
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Rule 4123-17-71 | Claim impact reduction program.
(A) Definitions. As used in this rule: (1) "Claim impact
reduction program" or "CIRP" means the bureau of workers'
compensation's voluntary rate program which offers a private employer or a
public employer taxing district employer the opportunity to mitigate the impact
of a significant claim that will enter the employer's experience for the
first time. (2) "Program
eligibility period" means the four policy years in which an employer has a
significant claim in its experience period. (3) "Significant claim" means a
claim whose total value or maximum claim value, whichever is lower, will be
greater than the employer's total limited losses ("TLL") as
defined in rule 4123-17-03 of the Administrative Code. Effective July 1, 2020,
for private employers whose expected losses fall below the minimum expected
loss provided in appendix A to rule 4123-17-05.1 of the Administrative Code, a
TLL of three hundred dollars shall be used; for public employer taxing
districts whose expected losses fall below the minimum expected loss provided
in appendix A to rule 4123-17-33.1 of the Administrative Code, a TLL of five
hundred fifty dollars shall be used. (4) "Minor
claim" means a medical-only or lost-time claim whose total value or
maximum claim value, whichever is lower, will be less than the employer's
TLL as defined in rule 4123-17-03 of the Administrative Code, subject to the
TLL provisions of a significant claim that became effective July 1,
2020. (B) Application and withdrawal
processes. (1) An employer's
participation in the CIRP is voluntary. The employer shall apply to participate
in the CIRP for their initial year of program eligibility by the application
deadline set forth in appendix A and appendix B to rule 4123-17-74 of the
Administrative Code. For subsequent years of eligibility, if an employer meets
the requirements of paragraph (C) of this rule as of the application deadline
set forth in appendix A and appendix B to rule 4123-17-74 of the Administrative
Code, and the employer has not withdrawn from the CIRP pursuant to paragraph
(B)(2) of this rule, the bureau will renew the employer in the CIRP without
requiring the employer to file a renewal application. The bureau shall have the
final authority to approve an eligible employer for initial and continued
participation in the CIRP. (2) An employer may withdraw from the
CIRP under this rule at any time. The employer must notify the bureau in
writing that the employer no longer desires to participate in the CIRP. An
employer that withdraws from the CIRP after receiving a discount will return to
its own individual experience rating for that policy year. (3) If the employer withdraws from the
CIRP and has any remaining years in the program eligibility period, the
employer may reapply for the CIRP under the provisions of paragraph (A) of this
rule and designate the same claim as the significant claim. (C) Eligibility
requirements. At the time of an employer's initial
application for the CIRP, the employer must be enrolled in the group experience
rating program. At the time of initial application and each renewal application
deadline as set forth in appendix A and appendix B to rule 4123-17-74 of the
Administrative Code, the employer must: (1) Be current with respect to all
payments due the bureau, as defined in paragraph (A)(1)(b) of rule 4123-17-14
of the Administrative Code; (2) Be current on the
payment schedule of any part-pay agreement into which it has entered for
payment of premiums or assessment obligations; (3) Not have cumulative lapses in
workers' compensation coverage in excess of forty days within the prior
twelve months; (4) Be enrolled in the
group experience rating program; and (5) Have reported actual payroll for the
preceding policy year and have paid any premium due upon reconciliation of
estimated premium and actual premium for that policy year. (D) General program
requirements. (1) In signing the
application form, the chief executive officer or designated management
representative of the employer is certifying to the bureau that the employer
will comply with all program requirements. (2) An employer may have
a maximum of three minor claims at any time in addition to the one significant
claim. (a) As a minor claim exits the employer's experience period,
the employer may include a new minor claim. (b) The total combined costs of these minor claims must be below
the employer's TLL. (3) An employer may participate in the
CIRP on no more than one significant claim within the program eligibility
period from the date of the employer's initial participation in the
program. (4) Once a claim has been designated as
the significant claim in initial enrollment for a program eligibility period,
an employer is not permitted to change the claim designated as the significant
claim. (5) Settled and subrogated claims will be
included in the employer's total claim count. (6) In the first year of the program
eligibility period, the employer shall participate in an industry-specific
half-day safety program prescribed by the division of safety and hygiene. In
subsequent years of the program eligibility period in which the employer elects
to participate in the CIRP, the employer shall complete an online training
class prescribed by the division of safety and hygiene. (7) Once admitted into
the CIRP, the employer must report actual payroll for the preceding policy year
and pay any premium due upon reconciliation of estimated premium and actual
premium for that policy year no later than the date set forth in rule
4123-17-14 of the Administrative Code. An employer will be deemed to have met
this requirement if the bureau receives the payroll report and the employer
pays any premium owed associated with that payroll report before the expiration
of any grace period established by the administrator of workers'
compensation pursuant to paragraph (B) of rule 4123-17-16 of the Administrative
Code. (E) Program benefits. The bureau will credit an employer that meets all
the criteria with a discount from the employer's base rate as
follows: (1) In the first year of the program eligibility period,
twenty per cent; (2) In the second year of the program eligibility period,
fifteen per cent; (3) In the third year of the program eligibility period,
ten per cent; and (4) In the fourth year of the program eligibility period,
five per cent. (F) Removal from program. (1) If the employer fails
to meet the requirements of paragraph (C) or paragraph (D) of this rule, the
bureau will remove an employer from participation in the CIRP at the beginning
of the next policy year and, upon removal, will return the employer to its
individual EM. (2) An employer removed
from the OCP for failure to comply with paragraph (D)(7) of this rule will be
rerated for the full policy year at the employer's base rate or
experience-modified rate as determined by the employer's expected losses
for the policy year. (G) An employer may appeal the
bureau's application rejection or the bureau's participation removal
in the CIRP to the bureau's adjudicating committee pursuant to section
4123.291 of the Revised Code and rule 4123-14-06 of the Administrative
Code.
Last updated July 2, 2024 at 11:40 AM
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Rule 4123-17-72 | Deductible rule.
(A) Definitions. As used in this rule: (1) "Coverage
period" means the twelve month period beginning July first through June
thirtieth for private employers, and January first through December
thirty-first for public employers. The deductible selected by the employer will
apply only to claims with a date of injury within the coverage period defined
in the deductible agreement. (2) "Deductible" means the maximum amount an employer
participating in the deductible program must reimburse the bureau for each
claim that occurs during the policy year. (a) "Small deductible" means a deductible less than or
equal to ten thousand dollars. (b) "Large deductible" means a deductible greater than
ten thousand dollars. (3) "Experience
rated premium" means the premium obligations of an employer for the policy
year excluding the disabled workers' relief fund ("DWRF")
assessment. Experience rated premium may include any experience rated premium
related to policy combinations. The premium is subject to the premium sized
adjustment described in rule 4123-17-03.3 of the Administrative
Code. (4) "Modified
rate" means the rate that employers who are experience rated pay as a
percentage of their payroll. This rate is calculated by taking the base rate
and multiplying it by the employer's experience modification
("EM") factor. (5) "Base rate"
means the rate that employers who are not experience rated pay as a percentage
of their payroll. (6) "Policy in good
standing" means the employer is current on all payments due to the bureau
and is in compliance with bureau laws, rules, and regulations at the time of
enrollment or reenrollment. (7) "Premium"
means money paid and due from an employer for workers' compensation
insurance. Premium does not include money paid as fees, fines, penalties or
deposits. (8) "Qualified
employer" means an employer that has a state insurance fund policy that is
in good standing at the time of enrollment or reenrollment. Although the
employer may be a qualified employer, the bureau may not accept the employer
into the deductible program for other reasons set forth in this
rule. (B) Eligibility
requirements. (1) An employer shall be
eligible to participate in the deductible program only if the employer meets
all of the following requirements: (a) As of each continuing eligibility evaluation date, the
employer holds active workers' compensation coverage as of the original
application deadline or anniversary date of participation as
follows: (i) The employer must be
current with respect to all payments due the bureau, as defined in paragraph
(A)(1)(b) of rule 4123-17-14 of the Administrative Code. (ii) The employer must be
current on the payment schedule of any part-pay agreement into which it has
entered for payment of premiums or assessment obligations. (iii) If the employer
selects a small deductible, the employer may not have cumulative lapses in
workers' compensation coverage in excess of forty days within the
preceding twelve months. (iv) If the employer
selects large deductible, the employer may not have cumulative lapses in
workers' compensation coverage in excess of fifteen days within the
preceding five years. (v) The employer must
report actual payroll for the preceding policy year and pay any premium due
upon reconciliation of estimated premium and actual premium for that policy
year no later than the application deadline date set forth in rule 4123-17-74
of the Administrative Code. (b) The employer shall demonstrate the ability to make payments
under the deductible program based upon a credit score established by the
bureau on an annual basis which will be applicable to all applicants for the
program year. The bureau shall obtain the credit reports from an established
vendor of such information. An employer that is a subsidiary of another
corporate entity may use the parent corporate entity's credit score in
meeting this requirement if the parent corporate entity meets financial
criteria for the deductible program and executes a contract of guaranty with
respect to the subsidiary's participation in the program. (c) The bureau may require an employer to adopt additional risk
mitigation measures as a prerequisite for participation in the program. These
measures may include, but are not limited to, either individually or in
combination, the following: (i) Adoption of an
alternative payment plan; (ii) Providing
securitization in the form of a letter of credit or surety bond;
or (iii) For employers
electing a large deductible, selection of an aggregate stop-loss
limit. (2) The following
employers shall not be eligible to participate in the deductible
program: (a) State agencies; and (b) Self-insuring employers providing compensation and benefits
pursuant to section 4123.35 of the Revised Code. (C) In selecting an employer deductible
program under this rule, the employer must select, on an application provided
by the bureau, a per claim deductible amount, which shall be applicable for all
claims with dates of injury within a one-year coverage period. The employer
shall choose one deductible level from the following: (1) Five hundred
dollars; (2) One thousand
dollars; (3) Two thousand five
hundred dollars; (4) Five thousand
dollars; (5) Ten thousand
dollars; (6) Twenty-five thousand
dollars; (7) Fifty thousand
dollars; (8) One hundred thousand
dollars; or (9) Two hundred thousand
dollars. (D) In choosing a small deductible, the
employer may not choose a deductible amount that exceeds twenty-five per cent
of their experience rated premium obligation during the most recent full policy
year. For a new employer policy, the deductible amount shall not exceed
twenty-five per cent of the employer's expected premium. In choosing a
large deductible, the employer may not choose a deductible amount that exceeds
forty per cent of their experience rated premium obligation for the most recent
full policy year. For self-insuring employers re-entering the state insurance
fund, the bureau will use the paid workers' compensation benefits from the
last full policy year in place of experience rated premium. The bureau may
estimate a full year's premium should only a partial year be available or
if no premium is available in the most recent full policy year. (E) An employer selecting a large
deductible will undergo additional credit analysis and must submit financial
information to the bureau during the enrollment period preceding each policy
year they elect to participate in the program. (1) An employer choosing
a deductible level of twenty-five thousand dollars or fifty thousand dollars
must submit reviewed or audited financials for at least the three most recent
fiscal years. The financials must be prepared in accordance with generally
accepted accounting principles (GAAP). (2) An employer choosing
a deductible level of one hundred thousand dollars or two hundred thousand
dollars must submit audited financials for at least the three most recent
fiscal years. The financials must be prepared in accordance with
GAAP. (F) An employer may request an annual
aggregate stop-loss limit option in combination with large deductible levels.
If the employer requests the aggregate stop-loss limit option, the bureau shall
limit the employer's deductible billings for injuries which occur during
the associated policy year to three times the deductible level chosen. The
bureau may reject the employer's request to participate in the aggregate
stop-loss limit option if the bureau determines that, because of the
employer's premium or estimated premium size, the employer would receive a
credit under this rule that would exceed the employer's maximum aggregate
stop-loss liability. (G) The employer shall file the
application provided by the bureau and any other documentation required for
enrollment in the deductible program by the applicable application deadline set
forth in appendix A or appendix B to rule 4123-17-74 of the Administrative
Code. The bureau shall not permit an employer to enroll
in a deductible program outside of the application deadline, except that the
bureau will consider an employer establishing a policy in Ohio for the first
time for participation where the employer submits its deductible program
application to the bureau within thirty days of obtaining coverage. (H) Renewal in the deductible program at
the same level for each subsequent year shall be automatic, subject to review
by the bureau of the employer's continued eligibility under paragraph (B)
of this rule, unless the employer notifies the bureau in writing that the
employer does not wish to participate in the program or that the employer wants
to change the deductible amount for the next coverage period. The employer
shall provide such notice to the bureau within the time and in the manner
provided in paragraph (G) of this rule. (I) Except as provided in paragraph (M)
of this rule, an employer shall not be permitted to withdraw from the
deductible program during the policy year, and no changes shall be made with
respect to any deductible amount selected by the employer within the policy
year. (J) The bureau shall pay the claims costs
under a deductible program and the employer shall reimburse to the bureau the
costs under the deductible program as follows: (1) The bureau shall pay
all claims costs in accordance with the laws and rules governing payment of
workers' compensation benefits. For small deductible levels, the amount to
be included in the employer's experience for a policy year shall be any
claims costs for injuries incurred in that policy year less any deductible
billed to the employer under this rule. For large deductible levels, the bureau
shall include the entire claims cost for injuries incurred in a policy year in
the employer's experience for that policy year. Any qualifying claims in
accordance with paragraphs (G)(4) and (G)(5) of rule 4123-17-03 of the
Administrative Code shall be excluded from the employer's
experience. (2) The bureau shall bill
the employer on a monthly basis for any claims costs paid by the bureau for
amounts subject to the deductible as elected by the employer for the policy
year. In addition to amounts paid by the bureau for which the bureau is seeking
reimbursement from the employer, such monthly billings shall also reflect the
payments to date for any claims to which a deductible is
applicable. (3) The employer shall
pay all deductible amounts billed by the bureau by the invoice due date. The
employer will be subject to any interest or penalty provisions to which other
monies owed the bureau are subject, including certification to the attorney
general's office for collection. (4) The employer shall
continue to be liable beyond any deductible program period for billings covered
under a deductible program for injuries that arose during any period for which
a deductible is applicable, regardless of when payment was made by the
bureau. (K) The bureau will apply the premium
reduction calculation under the deductible program directly to the base rate
established for the policy year for base-rated employers, or after the modified
premium rate is established for experience-rated employers, but prior to any
other premium adjustments, as well as the DWRF assessment. The bureau will
calculate the premium reduction in accordance with the appendices of this rule,
which takes into account both the deductible amount chosen by the employer and
the applicable hazard group based upon the most current version of the national
council on compensation insurance's hazard groupings as established by the
hazard group with the largest percentage of premium, as determined at the end
of the enrollment period for that year. (1) In determining the
primary classification code and appropriate hazard group, the bureau shall
utilize payroll and the associated experience premium for the rating year
beginning two years prior to the period in which the employer is seeking to
enroll in the deductible program. (2) For new employers,
the bureau shall base the appropriate primary classification code and hazard
group upon estimated payroll. (L) Where there is a combination or
experience transfer of an employer within a deductible program policy period,
following the application of any other rules applicable to a combination or
experience transfer, the employer may be eligible to remain in a deductible
program as follows: (1) Successor: entity not
having coverage. Predecessor: enrolled in deductible program
currently or in prior policy years. Where there is a combination or experience
transfer, where the predecessor was a participant in the deductible program and
the successor is assigned a new policy with the bureau, the successor shall
make application for the deductible program within thirty days of obtaining a
bureau policy, as set forth in paragraph (L)(3) of this rule. Notwithstanding
this election, the successor shall be responsible for any and all existing or
future liabilities stemming from the predecessor's participation in the
deductible program prior to the date that the bureau was notified of the
transfer as provided under paragraph (C) of rule 4123-17-02 of the
Administrative Code. (2) Successor: enrolled
in the deductible program. Predecessor: not enrolled in the deductible
program. Where there is a combination or experience
transfer involving two or more entities, each having Ohio coverage at the time
of the combination or experience transfer, and the successor policy is enrolled
in the deductible program for the program year, the successor shall
automatically remain in the deductible program for the program year and is
subject to renewal in accordance with paragraph (H) of this rule. (3) Successor: not
enrolled in deductible program. Predecessor: enrolled in deductible
program. Where there is a combination or experience
transfer involving two or more entities, each having Ohio coverage at the time
of the combination or experience transfer, and the successor policy is not
enrolled in the deductible program, the predecessor shall not be automatically
entitled to continue in the deductible program. The successor may make a formal
application should it desire to participate in the deductible program for the
next policy year. Whether or not the successor chooses or is otherwise eligible
to participate in a deductible program, under paragraph (C) of rule 4123-17-02
of the Administrative Code, the successor remains liable for any existing and
future liabilities resulting from a predecessor's participation in the
deductible program. (M) The bureau may remove an employer
participating in the deductible program from the program with thirty days
written notice to the employer for any of the following reasons: (1) The employer
participates in any plan or program that is not compatible with the deductible
program under rule 4123-17-74 of the Administrative Code (2) The bureau certifies
a balance due from the employer to the attorney general; (3) The employer makes
direct payments to any medical provider for services rendered, to any medical
provider for supplies or to any injured worker for compensation associated with
a workers' compensation claim; (4) The employer engages
in misrepresentation or fraud in conjunction with the deductible program
application process; or (5) The employer fails to
report actual payroll for the preceding policy year or fails to pay any premium
due upon reconciliation of estimated premium and actual premium for that policy
year, no later than the due date set forth in rule 4123-17-14 of the
Administrative Code. An employer will be deemed to have complied with this
requirement if the bureau receives the payroll report, and the employer pays
any premium associated with the payroll report, prior to the expiration of any
grace period established by the administrator pursuant to paragraph (B) of rule
4123-17-16 of the Administrative Code. (N) An employer removed from the
deductible program for failure to comply with paragraph (M) of this rule will
be required to pay: (1) Claims costs up to
the deductible selected under paragraph (C) of this rule for all injuries
incurred from the beginning of policy year in which the employer participated
in the deductible program through the date of removal from the program;
and (2) Full experience-rated
premium, without the deductible credit, from the date of removal from the
deductible program through the remainder of the policy year.
View AppendixView AppendixView AppendixView AppendixView AppendixView Appendix
Last updated July 2, 2024 at 11:41 AM
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Rule 4123-17-73 | Group retrospective rating program.
(A) Definitions. As used in this rule: (1) "Group
retrospective rating" is a voluntary workers' compensation insurance
program offered by the bureau. Group retrospective rating is designed to
provide financial incentive to employer groups participating in the program
that, through improvements in workplace safety and injured worker outcomes, are
able to keep their claim costs below a predefined level. (2) "Basic premium
factor" is a component of the retrospective rating premium formula used to
account for insurance charges and costs that are distributed across all
employers. The basic premium factor (BPF) is based upon charges for the cost of
having retrospective premium limited by the selected maximum premium ratio, the
cost of claims when they exceed the per claim maximum value and the cost of
excluding surplus costs from incurred losses. (3) "Developed
losses" or "total incurred losses (developed)" are a component
of the retrospective rating premium formula intended to account for the fact
that total incurred losses in claims are likely to increase over time. This
claim cost development results from a number of factors, including, but not
limited to, reactivation of claims, additional claim awards, and claims that
may be incurred but not reported for a substantial period, and result in costs
that would otherwise not be covered by premium collected. (4) "Evaluation
period" means the three-year period beginning immediately after the end of
the retro policy year. Annual evaluations will occur three times during the
evaluation period at twelve, twenty-four, and thirty-six months after the end
of the retro policy year. (5) "Incurred
losses" means compensation payments and medical payments paid to date as
well as open case reserves. The total incurred losses will not include surplus
costs or costs as defined in paragraphs (G)(4) or (G)(5) of rule 4123-17-03 of
the Administrative Code and will be limited on a per claim basis. (6) "Loss
development factor" means actuarially determined factors that are
multiplied by incurred losses of non-PTD/death retro claims to produce
developed losses. Loss development factors (LDF) are unique to each retro
policy year. (7) "Maximum premium
ratio" means a factor pre-selected by the retro group that is multiplied
by the standard premium after application of the premium size factors to
determine the maximum retrospective premium for the group. (8) "Member of a
retro group" means the individual employers that participate in a group
retrospective rating plan of a sponsoring organization. (9) "Reserve"
means the bureau's estimate of the future cost of a claim at a specific
point in time. (10) "Retro policy
year" means the policy year in which an employer is enrolled in group
retrospective rating. Claim losses which occur during this year will be tracked
for all retro group members and refunds or assessments will be distributed
based on those losses in the subsequent evaluation period. The retro policy
year start and end date will match that of the rating policy year. For public
employer taxing districts, the retro policy year shall be January first through
December thirty-first of a year. For private employers, the retro policy year
shall be July first through June thirtieth of the following year. (11) "Standard
premium" means the total premium paid by or on behalf of an employer for a
given policy year including any premium size factor adjustment, excluding the
assessment for the disabled workers' relief fund. In determining standard
premium, total premium paid will not be reduced by any rebates or dividends
issued pursuant to rule 4123-17-10 of the Administrative Code. (12) "Application
deadline" means the application deadline for group retrospective rating as
set forth in appendix A and in appendix B to rule 4123-17-74 of the
Administrative Code. (B) Sponsor eligibility
requirements. Each sponsoring organization seeking to sponsor a
retro group must be certified under the bureau's sponsor certification
process as specified in rule 4123-17-61.1 of the Administrative Code. (C) Retro group eligibility
requirements. Each retro group seeking to participate in the
bureau group retrospective rating program shall meet the following
standards: (1) A retro group must be
sponsored by a bureau certified sponsoring organization. (2) The employers'
business in the organization must be substantially similar such that the risks
which are grouped are substantially homogeneous. A group shall be considered
substantially homogeneous if the main operating classification codes of the
risks as determined by the premium obligations for the rating year beginning
two years prior to the retro policy year are assigned to the same or similar
industry groups. Industry groups are determined by appendix A to rule
4123-17-05 of the Administrative Code. Industry groups seven and nine as well
as eight and nine, and industry groups two and four as well as four and six are
considered similar. The bureau may allow an employer to move to a more
homogeneous group when, after December thirty-first for private employer groups
and June thirtieth for public employer taxing district groups, but before the
application deadline, the employer: (a) Is an employer without a full year of recorded
premium; (b) Is reclassified as a result of an audit;
or (c) Fully or partially combines with another
employer. (3) A retro group of
employers must have aggregate standard premium in excess of one million
dollars, as determined by the administrator based upon the last full policy
year for which premium information is available. (a) For employers without a full year of recorded premium,
the bureau may use the employer's expected premium. (b) The bureau shall calculate the premium based upon the
experience modified premium of the individual employers excluding group rating
discounts. (4) The retro group must
include at least two employers. (5) The formation and
operation of the retro group program by the organization must substantially
improve accident prevention and claims handling for the employers in the retro
group. The bureau shall require the retro group to document its safety plan or
program for these purposes, and, for retro groups reapplying annually for group
retrospective rating coverage, the results of prior programs. The safety plan
must follow the guidelines and criteria set forth under rule 4123-17-68 of the
Administrative Code. (D) Employer eligibility
requirements. Each employer seeking to participate in the
bureau group retrospective rating program must meet the following
standards: (1) The employer must be
a private employer or public employer taxing district that participates in the
state insurance fund. A self-insuring employer or a state agency public
employer shall not be eligible for participation in the group retrospective
rating program. (2) Each employer seeking
to enroll in a retro group for workers' compensation coverage must have
active workers' compensation coverage according to the following
standards: (a) As of the application deadline, the employer must be
current with respect to all payments due the bureau, as defined in paragraph
(A)(1)(b) of rule 4123-17-14 of the Administrative Code. (b) As of the application deadline for group retrospective
rating, the employer must be current on the payment schedule of any part-pay
agreement into which it has entered for payment of premiums or assessment
obligations. (c) The employer cannot have cumulative lapses in
workers' compensation coverage in excess of forty days within the twelve
months preceding the application deadline date for group retrospective
rating. (d) The employer must report actual payroll for the
preceding policy year and pay any premium due upon reconciliation of estimated
premium and actual premium for that policy year no later than the application
deadline date set forth in rule 4123-17-74 of the Administrative Code.
(3) No employer may be a
member of more than one retro group or a retro and non-retro group for the
purpose of obtaining workers' compensation coverage. An employer who has
been included on a group experience rating roster for the upcoming policy year
may not elect to participate in group retrospective rating after the deadline
for group experience rating set forth in rule 4123-17-74 of the Administrative
Code. (4) An employer must be
homogeneous with the industry group of the retro group as defined in paragraph
(C)(2) of this rule. A member of a continuing retro group who
initially satisfied the homogeneous requirement shall not be disqualified from
participation in the continuing retro group for failure to continue to satisfy
such requirement. (E) A sponsoring organization shall make
application for group retrospective rating on a form provided by the bureau and
shall complete the application in its entirety with all documentation attached
as required by the bureau. If the sponsoring organization fails to include all
pertinent information, the bureau will reject the application. (1) The group
retrospective rating application (U-151) shall be signed each year by an
officer of the sponsoring organization. (2) The sponsoring
organization shall identify each individual employer in the retro group on an
employer roster for group retrospective rating plan (U-152). (F) A retro group's application for
group retrospective rating is applicable to only one policy year. The retro
group must reapply each year for group retrospective rating coverage.
Continuation of a plan for subsequent years is subject to timely filing of an
application on a yearly basis and the meeting of eligibility requirements each
year. (G) Upon receipt of an application for
retro group, the bureau shall do the following: (1) Determine the
industry classification of the retro group based upon the makeup of retro group
employers submitted. (2) Screen prospective
retro group members to ensure that their business operations fit appropriately
in the retro group's industry classification. (3) In reviewing the
retro group's application, if the bureau determines that individual
employers in the retro group do not meet the eligibility requirements for group
retrospective rating, the bureau will notify the individual employers and the
retro group of this fact, and the retro group may continue in its application
for group retrospective rating coverage without the disqualified
employers. (H) The group retrospective rating
sponsor shall submit to the bureau an employer statement (U-153) each year for
each employer that wishes to participate in group retrospective rating with the
sponsor. Where an employer files a new employer statement form in the sixty
days prior to the application deadline, the bureau will presume that the latest
filed employer statement form of the employer indicates the employer's
intentions for group retrospective rating. An employer statement form shall
remain effective until the end of the policy year as defined on the employer
statement form. (I) The bureau may request of individual
employers or the retro group sponsor, additional information necessary for the
bureau to rule upon the application for group retrospective rating
participation. Failure or refusal of the retro group sponsor to provide the
requested information on the forms or computer formats provided by the bureau
shall be sufficient grounds for the bureau to reject the application and refuse
the retro group's participation in group retrospective rating
program. (J) Individual employers who are not
included on the final retro group roster or do not have an individual employer
application (U-153) for the same retro group or another retro group sponsored
by the same sponsoring organization on file by the application deadline, will
not be considered for the group retrospective rating plan for that policy year;
however, the bureau may waive this requirement for good cause shown due to
clerical or administrative error, so long as no employer is added to a retro
group after the application deadline. The group retrospective rating sponsor
shall submit all information to the bureau by the application
deadline. (K) Once a retro group has applied for
group retrospective rating, the organization may not voluntarily terminate the
application. All changes to the original application must be filed on a bureau
form provided for the application for the group retrospective rating plan and
must be filed prior to the filing deadline. Any rescissions made must be
completed in writing, signed by an officer of the sponsoring organization and
filed prior to the filing deadline. The retro group may make no changes to the
application after the last day for filing the application. Any changes received
by the bureau after the filing deadline will not be honored. The latest
application form or rescission received by the bureau prior to the filing
deadline will be used in determining the premium obligation. (L) After the group retrospective rating
application deadline but before the end of the policy year for the retro group,
the sponsoring organization may notify the bureau that it wishes to remove a
member of a retro group from participation in the retro group. The sponsoring
organization may request that the member of a retro group be removed from the
retro group after the application deadline only for the gross misrepresentation
of the member of a retro group on its application to the retro
group. (1) "Gross
misrepresentation" is an act by an employer applicant for group
retrospective rating or a member of a retro group that would cause financial
harm to the other members of the retro group and is limited to any of the
following: (a) The sponsoring organization discovers that the employer
applicant for group retrospective rating or a member of a retro group has
recently merged with one or more entities without disclosing such merger on the
employer's application for membership in the retro group, and such merger
adversely affects the employer's risk of future losses. (b) The sponsoring organization discovers that the employer
applicant for group retrospective rating or a member of a retro group has
failed to disclose the true nature of the employer's business pursuit on
its application for membership in the retro group, and this failure adversely
affects the loss potential of the retro group. (2) The sponsoring
organization must provide sufficient documentation, as determined by the
bureau, to support its request to remove an employer from a retro
group. (3) The employer shall be
removed from the group only with the bureau's approval. (M) An employer will be removed from the
group retrospective rating program for the current policy year for failure to
report actual payroll for the preceding policy year and pay any premium due
upon reconciliation of estimated premium and actual premium for that policy
year no later than the date set forth in rule 4123-17-14 of the Administrative
Code. An employer will be deemed to have met this requirement if the bureau
receives the payroll report and the employer pays premium associated with that
payroll report before the expiration of any grace period established by the
administrator pursuant to paragraph (B) of rule 4123-17-16 of the
Administrative Code. Should an employer not comply with the provisions of this
paragraph, the following will apply: (1) Claims costs
according to this rule for all injuries incurred from the beginning of the
policy year in which the employer participated in group retrospective rating
through the date of removal from the program shall be included in the group
retrospective rating calculation; and (2) Only premium from the
beginning of the policy year through the date of removal will be included in
the group retrospective rating calculation for the participation policy
year. (N) A retro group formed for the purpose
of group retrospective rating may not voluntarily terminate a plan during the
policy year. A change in the name of the retro group will not constitute a new
retro group. A change of the organization sponsoring a retro group or moving a
retro group to a new sponsoring organization shall constitute a new retro group
and the members of the new retro group must meet the homogeneity requirement of
paragraph (C)(2) of this rule. A retro group shall be considered a continuing
retro group if more than fifty per cent of the members of the retro group in
the previous rating year are members of the retro group in the current rating
year. (O) Selection of an authorized
representative for the retro group shall meet the following
requirements: (1) A retro group that
has been established and has been accepted by the bureau for the purpose of
group retrospective rating shall have no more than one permanent authorized
representative for representation of the retro group and the individual
employers of the retro group before the bureau and the industrial commission in
any and all policy-related matters pertaining to participation in the state
insurance fund. (2) The selection of an
authorized representative must be made by submission of a completed form U-151,
and any change or termination of the authorized representative can be made only
by a subsequent submission of form U-151. Only an officer of the sponsoring
organization may sign a U-151. (P) The bureau shall consider an employer
individually when assessing the premium payments for the retro policy year. The
retro group will be considered a single entity for purposes of calculating
group retrospective rating premium adjustments. (Q) The group retrospective rating
premium calculation will occur at twelve, twenty-four, and thirty-six months
following the end of the group retrospective rating policy year. (1) On the evaluation
date, the bureau will evaluate all claims with injury dates that fall within
the retro policy year. The incurred losses and reserves that have been
established for these claims are "captured" or "frozen."
The group's retrospective premium will be calculated based on the
developed incurred losses of the group. The group retrospective rating premium
will be compared to the group standard premium, which is the combined standard
premiums of retro group members for the retro policy year as defined in
paragraph (A)(11) of this rule and all subsequent group retrospective rating
refunds and assessments. The difference will be distributed or billed to
employers as a refund or assessment. (a) These assessments will be limited per a maximum premium
ratio selected during the group retrospective rating application
process. (b) Effective with policy years beginning on or after
January 1, 2022, premium refunds or premium rebates provided to group
retrospective rating employers for a policy year may not exceed, in their
cumulative total, one hundred percent of the actual premium following reporting
of actual payroll and reconciliation of estimated premium and actual premium in
accordance with paragraph (M) of this rule. (c) Any reserving method that suppresses some portion of an
employer's costs for the purpose of calculating an experience modification
will not apply in the calculation of incurred losses for group retrospective
rating. (d) The bureau may hold a portion of refunds or defer
assessments owed in the first and second evaluation periods to minimize the
volatility of refunds and assessments. Any net refund or assessment will be
fully distributed or billed by the bureau in the third evaluation
period. (2) Incurred losses used
in the group retrospective rating premium calculation will be limited to five
hundred thousand dollars per claim. (3) Incurred losses will
not include surplus or violation of a specific safety requirement (VSSR)
costs. (R) The retrospective premium calculation
that will occur at various evaluation points after the retro policy year end is
calculated by the following formula, with standard premium and developed
incurred losses are for the total of the entire retro group: Group retrospective rating premium = (Basic premium factor x standard premium as
defined in paragraph (A)(11) of this rule) plus developed incurred losses (1) A group will elect a
maximum premium ratio for the group each year as part of the group
retrospective rating application process. This ratio will determine the maximum
amount of total premium a retro group may pay after refunds and
assessments. (2) Options for the
maximum premium ratio and the corresponding basic premium factor will be as set
forth in appendix A and in appendix B to this rule. (3) A basic premium
factor is applied in the retro premium calculation to account for insurance
costs, surplus costs, and a per claim cap. The basic premium factor is
determined using the following factors: group size by standard premium as
defined in paragraph (A)(11) of this rule as set forth in appendix D to this
rule and maximum premium ratio. (4) Developed incurred
losses are created by totaling incurred losses and reserves for the entire
retro group and applying an actuarially determined loss development factor as
defined in appendix C to this rule. (5) Refunds and
assessments will be distributed directly to group retrospective rating
employers. The amount refunded or assessed to an individual employer will be
based upon the percentage of the total group standard premium paid by the
employer at the time of evaluation. The refund or assessment will be multiplied
by this percentage and the resulting amount will be distributed or billed to
the employer. (6) Within four months of
the evaluation date, if entitled, the bureau will send premium
refunds. (7) If additional premium
is owed, the additional premium is included in the employer's next invoice
and must be paid by the due date stated on the invoice. The bureau will charge
penalties on any additional premium not paid when it is due. If the member of a
retro group is entitled to a refund for one retro policy year and owes any
additional monies to the bureau, the bureau will deduct the monies due the
bureau from the refund. The bureau will refund the difference to the member of
a retro group. In the event that this adjustment still leaves a premium balance
due, the bureau will send a bill for the balance. (S) Terminations, transfers, and change
of ownership are addressed with regard to group retrospective rating as
follows: (1) Predecessor: enrolled
in group retrospective rating program. Successor: new entity. Where there is a combination or experience
transfer during the current policy year or the sixty days preceding the
application deadline for the upcoming policy year, wherein the predecessor was
a participant in or applicant for the group retrospective rating program, and
the successor is assigned a new policy with the bureau, the successor may be
considered a member of the group retrospective rating program if agreed to by
both the succeeding employer and the group retrospective rating sponsor.
Written agreement signed by both the succeeding employer and the group
retrospective rating sponsor must be received by the bureau within thirty days
of the date of succession. If the succeeding employer and the group sponsor
agree to successor joining the retro group, the successor's group
retrospective rating evaluation shall be based on the group's reported
payroll and claims incurred. Notwithstanding this election, the successor shall
be responsible for any and all existing or future rights and obligations
stemming from the predecessor's participation in the group retrospective
rating program prior to the date that the bureau was notified of the transfer
as prescribed under paragraph (C) of rule 4123-17-02 of the Administrative
Code. (2) Predecessor: not
enrolled in group retrospective rating program. Successor: enrolled in group retrospective
program. Where one legal entity that has established
coverage and is enrolled in the group retrospective rating program, wholly
succeeds one or more legal entities having established coverage and the
predecessor entities are not enrolled in the group retrospective rating program
at the date of succession, the payroll reported and claims incurred by the
predecessor from the date of succession to the end of the policy year, shall be
included in successor's retrospective rating plan. If the predecessor had
at any time participated in a group retrospective rating program, the successor
shall be responsible for any and all existing or future rights and obligations
stemming from the predecessor's participation in the group restrospective
rating program prior to the date that the bureau was notified of the transfer
as prescribed under paragraph (C) of rule 4123-17-02 of the Administrative
Code. (3) Predecessor: enrolled
in group retrospective rating program. Successor: not enrolled in group retrospective
rating program. Where one legal entity that has established
coverage and is not currently enrolled in a group retro plan wholly succeeds
one or more entities that are enrolled in a group retro plan,
predecessor's plan(s) shall terminate as of the ending date of the
evaluation period. Payroll reported and claims incurred on or after the date of
succession will be the responsibility of the successor under its current rating
plan. The successor shall be responsible for any and all existing or future
rights and obligations stemming from the predecessor's participation in
the group retro program prior to the date that the bureau was notified of the
transfer as prescribed under paragraph (C) of rule 4123-17-02 of the
Administrative Code. (4) Predecessor: enrolled
in group retro program. Successor: enrolled in different group retro
program. Where one legal entity that has established
coverage and is enrolled in a group retrospective rating plan wholly succeeds
one or more entities that are enrolled in a group retrospective rating plan,
predecessor's plan(s) shall terminate as of the ending date of the
evaluation period. Payroll reported and claims incurred on or after the date of
succession will be the responsibility of the successor under its group
retrospective rating plan. The successor shall be responsible for any and all
existing or future rights and obligations stemming from the predecessor's
participation in the group retrospective rating program prior to the date that
the bureau was notified of the transfer as prescribed under paragraph (C) of
rule 4123-17-02 of the Administrative Code. (5) Predecessor: enrolled
in group retrospective rating program. Successor: enrolled in same group retrospective
rating program. Where one legal entity that has established
coverage and is enrolled in a group retrospective rating plan wholly succeeds
one or more entities that are enrolled in the same group retrospective rating
plan, the successor shall be responsible for any and all existing or future
liabilities stemming from the predecessor's participation in the group
retrospective rating program prior to the date that the bureau was notified of
the transfer as prescribed under paragraph (C) of rule 4123-17-02 of the
Administrative Code. If the predecessor had at any time participated in a
different group retrospective rating program, the successor shall be
responsible for any and all existing or future rights and obligations stemming
from the predecessor's participation in the group retrospective rating
program prior to the date that the bureau was notified of the transfer as
prescribed under paragraph (C) of rule 4123-17-02 of the Administrative
Code. (6) Successor: cancels
coverage and was enrolled in group retrospective rating program. Predecessor: no predecessor. If the successor cancels coverage and there is
no predecessor, the premium and losses of the canceling employer will remain
with the retro group for future retrospective premium calculations. The
resulting refund or assessment will be collected from the remaining members of
the retro group. Group retrospective rating sponsors and
authorized representatives have the right to represent the interest of the
canceled employer on behalf of the group with regard to claims which occurred
during the year or years the employer was active in a retro group sponsored by
the organization. (7) Successor and/or
predecessor: open group retrospective rating policy years in the evaluation
period. If the successor and predecessor are not
currently enrolled in the group retrospective rating program, but either or
both have open group retrospective rating policy years in the evaluation
period, the successor shall be responsible for any and all existing or future
rights and obligations stemming from the predecessor's participation in
the group retrospective rating program prior to the date that the bureau was
notified of the transfer as prescribed under paragraph (C) of rule 4123-17-02
of the Administrative Code. (8) Partial
transfer. If an entity partially succeeds another entity
and the predecessor entity has any group retrospective rating policy years in
the evaluation period, the predecessor entity will retain any rights to
assessments or refunds. If the successor is enrolled in the group retrospective
rating program, payroll reported and claims incurred on or after the date of
the partial transfer will be the responsibility of the successor under its
group retrospective rating plan. (9) Successor: files a
petition for bankruptcy. Predecessor: no predecessor. If a current or previously group retrospective
rating program employer with open retro policy years files a petition for
bankruptcy under chapter seven or chapter eleven of the federal bankruptcy law,
that employer shall notify the bureau legal division by certified mail within
five working days from the date of the bankruptcy filing. The bureau will
petition the bankruptcy court to take appropriate action to protect the state
insurance fund and other related funds.
View AppendixView AppendixView AppendixView Appendix
Last updated July 2, 2024 at 11:41 AM
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Rule 4123-17-74 | Deadline dates and compatibility information for employer programs.
This rule defines employer program deadlines,
miscellaneous dates, and compatibility between programs. Specifics may be found
in the following appendices: Appendix A: Private employer program deadlines and
miscellaneous dates. Appendix B: Public employer taxing district program
deadlines and miscellaneous dates. Appendix C: Employer program compatibility. This rule supersedes other rules referencing
program deadlines and compatibility.
View Appendix
Last updated July 2, 2024 at 11:41 AM
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Rule 4123-17-75 | Bonus and rebate incentive programs.
(A) The following bonus and rebate
incentives are offered: (1) The transitional work bonus
established in rule 4123-17-55 of the Administrative Code; (2) The safety council rebate established
in rule 4123-17-56.2 of the Administrative Code; and (3) The drug-free safety program bonus
established in rule 4123-17-58 of the Administrative Code. (B) The bonus and rebate incentive levels
are as set forth in the appendix to this rule. The administrator may review the
bonus and rebate incentive levels on an annual basis and make recommendation to
the board of directors regarding the appropriate levels for each policy
year. (C) Application of bonus and rebate
incentives. (1) Bonus and rebate
incentive earned through participation cannot reduce an employer's
premium due below the amount of the minimum administrative charge for the
applicable policy year period as set forth in rule 4123-17-26 of the
Administrative Code. (2) bonus and rebate incentive earned
through participation excellence shall not be issued to employers paying only
the minimum administrative charge in the applicable policy year as set forth in
rule 4123-17-26 of the Administrative Code. (3) Rate adjustments made to an
employer's account subsequent to the issuance of bonus or rebate
incentives through an employer's participation may result in recalculation
of such incentives. (4) To qualify for any
incentive under this rule, an employer must: (a) Have coverage that is in an active policy status at the time
of calculation; and (b) Report actual payroll for the preceding policy year, and pay
any premium due upon reconciliation of estimated premium and actual premium for
that policy year, no later than the date set forth in rule 4123-17-14 of the
Administrative Code. An employer will be deemed to have met this requirement if
the bureau receives the payroll report and the employer pays premium associated
with such report before the expiration of any grace period established by the
administrator pursuant to paragraph (B) of rule 4123-17-16 of the
Administrative Code. (D) An employer may voluntarily withdraw
from a bonus or rebate incentive program by providing notice to the employer
services division of the bureau of workers' compensation. Any bonus or
rebate incentive earned during the policy year in which an employer withdraws
from a bonus or rebate incentive program must be repaid to the
bureau.
View Appendix
Last updated July 2, 2024 at 11:42 AM
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Rule 4123-17-76 | Cancellation of workers' compensation coverage.
Effective:
September 22, 2022
(A) The administrator of the bureau of
workers' compensation may cancel an employer's workers'
compensation coverage if any of the following apply: (1) The employer fails to
pay the required premium by the annual renewal date in accordance with rule
4123-17-14 of the Administrative Code, and the employer's estimated annual
premium is equal to the minimum administrative charge as set forth in rule
4123-17-26 of the Administrative Code; (2) The employer's
policy is in lapsed status, and the employer's policy has no allowed
claims filed against it within two years; or (3) The employer is a new
employer who failed to pay estimated premium and assessments when
due. (B) The effective date of cancellation
shall be: (1) For situations
described in paragraph (A)(1) of this rule, the last date of the most recently
completed policy year; or (2) For situations described in paragraph (A)(2) of this
rule, the bureau may select a date within the current policy year;
or (3) For situations described in paragraph
(A)(3) of this rule, the original effective date of the policy. (C) The administrator, for good cause
shown, may retroactively cancel an employer's workers' compensation
coverage. For purposes of this rule, "good cause" shall have the same
meaning as in paragraph (B) of rule 4123-14-03 of the Administrative
Code. (D) An employer may cancel its
workers' compensation coverage if all of the following criteria are
met: (1) The employer must
notify the bureau in writing; (2) One of the two
following circumstances apply: (a) The employer ceases operations in Ohio, or (b) The employer no longer has employees as defined in division
(A)(1)(b) of section 4123.01 of the Revised Code, and the employer agrees to
cancel any supplemental or elective coverage as permitted under Chapter 4123.
of the Revised Code; and (3) The employer must
submit the number of employees employed within each of the employer's
assigned manual classifications and the aggregate amount of wages paid to such
employees to the bureau and reconcile any premium that is due for the policy
year, and any other missing policy years, as set forth in rule 4123-17-14 of
the Administrative Code.
Last updated September 22, 2022 at 11:35 AM
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