(A) All employers granted the privilege
to pay compensation and benefits directly shall demonstrate sufficient
financial strength and administrative ability to assure that all obligations
under section 4123.35 of the Revised Code will be met promptly. The
administrator of workers' compensation shall deny the privilege to pay
compensation and benefits directly, where the employer is unable to demonstrate
its ability to promptly meet all the obligations under the rules of the
industrial commission and the bureau and section 4123.35 of the Revised Code.
The administrator of workers' compensation shall consider, but shall not
be limited to the factors in divisions (B)(1) and (B)(2) of section 4123.35 of
the Revised Code where they are applicable in determining the employer's
ability to meet all obligations under section 4123.35 of the Revised
Code.
The administrator of workers' compensation
shall review all financial records, documents, and data necessary to provide a
full financial disclosure of the employer, including but not limited to, the
balance sheets and a profit and loss history for the current year and the
previous four years. The administrator of workers' compensation shall
consider whether the employer has demonstrated the financial ability to pay any
and all claims obligations. Unless an applicant obtains waiver under paragraph
(D) of rule 4123-19-03.1 of the Administrative Code, financial records
submitted to the bureau must be audited by a certified public accountant, in
accordance with generally accepted accounting principles, and shall include the
certified public accountant's audit opinion.
(1) The administrator of
workers' compensation may waive certain requirements of divisions (B)(1)
and (B)(2) of section 4123.35 of the Revised Code pursuant to rule 4123-19-03.1
of the Administrative Code.
(2) The administrator of workers'
compensation shall not grant the status of self-insuring employer to the state,
except that the administrator may grant the status of self-insuring employer to
a state institution of higher education, including its hospitals.
(B) The employer shall secure from the
bureau proper application form(s) for completion. The completed application
shall be filed with the bureau at least ninety days prior to the effective date
of the employer's requested status as a self-insuring employer. The
administrator of workers' compensation may require that the application
be accompanied by an application fee as established by bureau resolution to
cover the cost of processing the application in accordance with section 4123.35
of the Revised Code. The application shall not be deemed complete until all
required information is attached thereto. Prior to presentation to the
administrator of workers' compensation, applicable items listed in
divisions (B)(1) and (B)(2) of section 4123.35 of the Revised Code shall be
made available to the bureau and shall be reviewed by the bureau.
(C) The bureau shall accept only
application forms which provide answers to all questions asked and furnish all
required information.
(D) Return of the completed forms
required by this rule and any additional information required by the bureau to
process the employer's application should be submitted at least ninety
days prior to the effective date of the employer's requested status as a
self-insuring employer.
(1) If the administrator
determines to grant the privilege of self-insurance, the bureau shall issue a
finding of fact, which has been prepared by the bureau and signed by the
administrator of workers' compensation, subject to all conditions
outlined in paragraph (M) of this rule.
(2) If the administrator
of workers' compensation determines not to grant the privilege of
self-insurance, the bureau shall so notify the employer, whereupon the employer
shall be required to continue to pay its full premium into the state insurance
fund.
(E) All employers that have secured the
privilege to pay compensation and benefits directly, will be required to make
contributions as determined by the administrator of workers' compensation
to the self-insuring employers' guaranty fund established under section
4123.351 of the Revised Code, and if an additional security is required by the
bureau, the amount form of the additional security may be specified by the
bureau. If the additional security is in the form of a surety bond, the bond
shall be from a company approved by the bureau and authorized to do business in
the state of Ohio by the Ohio department of insurance. The surety bond shall be
in the form prescribed by the bureau. If the additional security is in the form
of a letter of credit, the letter of credit must be provided by a federally
insured financial institution. The penalized amount of such additional security
is to be fixed by the administrator of workers'
compensation.
(F) The surety bond or additional
security furnished by the employer shall be for an amount and period as
established by the bureau and may be periodically reviewed and reevaluated by
the bureau. The surety bond or additional security shall provide on its face
that the surety shall be responsible for the payment of all claims where the
cause of action, as determined by the date of injury or date of occupational
disease, arose during the liability of the surety bond or additional security.
The liability under the surety bond or additional security and the rights and
obligations of the surety shall be limited to reimbursement for the amounts
paid from the surplus accounts of the state insurance fund by reason of the
default of the self-insuring employer in accordance with division (B) of
section 4123.82 of the Revised Code; however, in the event of such
self-insuring employer's default, the bureau shall first seek
reimbursement from the surety bond or additional security, which shall be first
liable and exhausted, before payment is made from the self-insuring
employers' guaranty fund established under section 4123.351 of the Revised
Code. Upon default of the self-insuring employer, it shall be the
responsibility of the administrator of workers' compensation to represent
the interests of the state insurance fund and the self-insuring employers'
guaranty fund. The administrator of workers' compensation, on behalf of
the self-insuring employers' guaranty fund, has the rights of
reimbursement and subrogation and shall collect from a defaulting self-insuring
employer, or other liable persons, all amounts the bureau has paid or
reasonably expects to pay from the self-insuring employers' guaranty fund
on account of the defaulting self-insuring employer.
(G) The security herein required to be
given by the employer shall be given to the state of Ohio, for the benefit of
the disabled employees or the dependents of deceased employees of the employer
filing the same, and shall be conditioned for the payment by the employer of
such compensation to disabled employees or the dependents of deceased employees
of such employer, and the furnishing to them of benefits equal to or greater
than is provided by the Ohio workers' compensation law and for the full
compliance with the rules, regulations, and procedures of the industrial
commission and the bureau.
(H) If another or parent corporation or
entity owns fifty per cent or more of the stock of an employer, the bureau may,
in its discretion, require the employer to furnish a contract of guaranty
executed by the ultimate domestic parent corporation or entity. The bureau
shall require an alternative form of security if it does not require a contract
of guaranty executed by the ultimate domestic parent corporation or
entity.
(I) Employees having one or more years of
experience as a workers' compensation administrator for a self-insuring
employer in Ohio shall be deemed sufficiently competent and knowledgeable to
administer a program of self-insurance. A self-insuring employer that employs a
workers' compensation administrator who have less than one year of
experience as a workers' compensation administrator in Ohio shall not have
its status as a self-insuring employer affected pending notification by the
bureau as to whether mandatory attendance of the employer's workers'
compensation administrator at a bureau training program is required. If the
bureau determines that the employer's workers' compensation
administrator is not able to administer a self-insuring program, the bureau may
direct mandatory attendance of the employer's workers' compensation
administrator at a bureau training program until such time as the bureau
determines that the employer's workers' compensation administrator is
sufficiently competent and knowledgeable to run such a workers'
compensation program. The cost of the bureau's training of the
workers' compensation administrator(s) under this rule will be borne by
the self-insuring employer or self-insuring employer applicant. By accepting
the privilege of self-insurance, an employer acknowledges that the ultimate
responsibility for the administration of workers' compensation claims, in
accordance with the law and rules of the bureau and the industrial commission,
rests with that employer. The self-insuring employer's records and
compliance with the bureau and the industrial commission rules shall be subject
to periodic audit by the bureau.
A self-insuring employer or applicant shall
designate one of its Ohio employees who is knowledgeable and experienced with
the requirements of the Ohio Workers' Compensation Act and rules and
regulations therein, as Ohio administrator of its self-insuring program. This
rule is not intended to prevent the hiring of an attorney or representative to
assist the employer in the handling and processing of workers'
compensation claims. The requirement for an Ohio administrator may be waived at
the discretion of the bureau. The name and telephone number of the Ohio
administrator, or non-Ohio administrator where the Ohio requisite has been
waived, shall be posted by the employer in a prominent place at all the
employer's locations. The Ohio administrator's duties shall include,
but not be limited to:
(1) Acting as liaison
between the employer, the bureau, and the industrial commission, and providing
information to the agency upon request;
(2) Providing assistance
to claimants in the filing of claims and applications for
benefits;
(3) Providing information
to claimants regarding the processing of claims and the compensation and
benefits to which claimants may be entitled, including eligibility and filing
requirements;
(4) Providing the various
forms to be used in seeking compensation or benefits;
(5) Accepting or
rejecting claims for benefits; and
(6) Approving the payment
of compensation and benefits to, or on behalf of, claimants, pursuant to
paragraph (L) of this rule.
(J) Employers that are granted the
privilege of paying compensation and benefits directly, in accordance with
these rules and regulations, shall:
(1) File with the bureau
via the bureau's website a report of paid compensation annually on or
before the last day of February each year;
(2) Maintain a record of
all injuries and occupational diseases resulting in more than seven days of
temporary total disability or death occurring to its employees and report the
same to the bureau upon forms to be furnished by the bureau; and
(3) Observe all the
rules, regulations, and procedures of the industrial commission and the bureau
with reference to determining the amount of compensation and benefits due to
the disabled employee or the dependents of deceased employees, and payment of
the same.
(K) If a self-insuring employer fails to
timely file its annual report of paid compensation, the bureau may estimate the
amount of paid compensation and assess the employer based on this estimate
pursuant to rule 4123-17-32 of the Administrative Code. If the employer
subsequently provides the bureau with actual paid compensation figures, the
bureau shall adjust the paid compensation and any assessment accordingly. A
self-insuring employer that is no longer a self-insuring employer in Ohio and
has failed to timely file a report of paid compensation shall be subject to
this rule.
(L) Minimal level of performance as a criterion for granting and
maintaining the privilege to pay compensation and benefits
directly.
(1) The employer must be
able to furnish or make arrangements for reasonable medical services during all
working hours. A written explanation of what arrangements have been made or
will be made to provide medical treatment shall be supplied with the
application for self-insurance.
For an employer desiring to be first granted
the privilege of self-insured status, the employer shall provide to the bureau
for the bureau's approval the employer's plan for the
following:
(a) Criteria for the selective contracting of health care
providers;
(b) Plan structure and financial stability for the medical
management of claims;
(c) Procedures for the resolution of medical disputes between an
employee and the employer, an employee and a provider, or the employer and a
provider, prior to an appeal under section 4123.511 of the Revised
Code;
(d) Upon the request of the bureau, provide a timely and accurate
method of reporting to the administrator of workers' compensation
necessary information regarding medical and health care service and supply
costs, quality, and utilization; and,
(e) Provide an employee the right to change health care
providers.
(2) The employer shall
promptly pay the fees of outside medical specialists to whom the industrial
commission or the bureau shall refer claimants for examination or where the
industrial commission or the bureau refers the claim file for review and
opinion by such specialist except as provided by law in cases where the claim
was subsequently disallowed. Such fees shall be paid within the time limits
provided for payment of medical bills under paragraph (L)(5) of this
rule.
(3) Every employer shall
keep a record of all injuries and occupational diseases, including contested or
denied claims, and shall report all claims with more than seven days of total
disability or death, including contested or denied claims, to the bureau and to
the employee or the claimant's surviving dependents in accordance with
rule 4123-3-03 of the Administrative Code. For all claims reported to the
bureau, the employer shall electronically update and report the allowed
conditions on the bureau's website within fourteen days of the
employer's acceptance of a condition or following the appeal period of
the final administrative order if the condition was contested. Claims resulting
in seven days or less of total disability shall be reported to the
employee.
(4) The employer shall
provide to the claimant and upon request, shall file with the bureau or the
industrial commission, medical reports relating thereto and received by it from
the treating physician and physicians who have seen the claimant in
consultation for the allowed injury or occupational disease, or any injury or
occupational disease for which a claim has been filed. The claimant shall
provide to the employer and, upon request, shall file with the bureau or the
industrial commission, medical reports relating thereto and received from the
treating physician and physicians who have seen the claimant in consultation
for the allowed injury or occupational disease or any injury or occupational
disease for which a claim has been filed. The claimant shall honor the
employer's request for appropriate written authorization to obtain medical
reports to the extent that such reports pertain to the claim.
(5) Within thirty days
after receipt of a hospital, medical, nursing, or medication bill duly incurred
by the claimant, the employer shall either pay such bill, or if the employer
contests any of such matters, shall notify the provider, the employee, and,
only upon request, the bureau or industrial commission in writing. Such written
notice shall specifically state the reason for nonpayment. The employer's
notification to the employee shall indicate that the employee has the right to
request a hearing before the industrial commission. If the matter is heard by
the industrial commission, the employer shall pay compensation and benefits due
and payable under an order as provided by section 4123.511 of the Revised Code.
Payments issued more than fourteen days from receipt of an order allowing
compensation will be considered non-compliant with this requirement. If the
employer allows a claim for benefits and compensation without a hearing, the
employer shall pay such benefits and compensation no later than twenty-one days
from acquiring knowledge of the claim or the claimant's filing of the C-84
form, whichever is later.
(6) The employer shall
acknowledge a written request for a change of physicians within seven days of
receipt of the request that includes the name of the physician and proposed
treatment. The employer may advise the injured worker of an impractical
situation concerning the injured worker's choice of physician, such as the
provider is retired, is deceased, is no longer licensed, is under license
suspension, is incarcerated, has affirmatively refused to treat the claimant or
serve as the physician of record, is not a physician as defined in paragraph
(P) of rule 4123-6-01 of the Administrative Code, or is otherwise unavailable
to treat the claimant. The employer cannot impede the claimant's freedom
to choose a treating physician for the allowed conditions in the claim.
(7) The employer shall
approve or deny a written request for treatment within ten days of the receipt
of the request. The employer cannot deny a treatment request, or contest
payment of any bill for the treatment, if the employer did not respond within
ten days of receipt of the treatment request. The employer cannot deny a
treatment request, or contest payment of any bill for the treatment, if the
employer did not respond within ten days of receipt of the treatment
request.
(8) The employer shall make its records
and facilities available to the employees of the bureau at all reasonable times
during regular business hours. A public employer shall make the reports
required by section 4123.353 of the Revised Code available for inspection by
the administrator of workers' compensation and any other person at all
reasonable times during regular business hours.
(9) The employer shall pay all
compensation as required by the workers' compensation laws of the state of
Ohio. By becoming self-insured, the employer agrees to abide by the rules and
regulations of the bureau and the industrial commission and further agrees to
pay compensation and benefits subject to the provisions of these rules. The
employer shall proceed to make payment of compensation or benefits without any
previous order from the bureau or the industrial commission and shall start
such payments as required under the Workers' Compensation Act unless the
employer contests the claim. The employer may allow for compensation payments
to be available through debit card, electronic funds transfer, or direct
deposit with the claimant's authorization.
(10) The employer may notify the
bureau's medical section and the claimant at least sixty days prior to the
completion of the payment of two hundred weeks of compensation for temporary
total disability with the request that the claimant be scheduled for
examination by the medical section. Payment of temporary total disability
compensation after two hundred weeks shall continue uninterrupted until further
order of the industrial commission up to the maximum required by law, unless
the claimant has returned to work, or the treating physician has made a written
statement that the claimant is capable of returning to his former position of
employment or has reached maximum medical improvement or that the disability
has become permanent, or, after hearing, an order is issued approving the
termination of temporary total disability compensation.
(11) Upon written request by the claimant
or claimant's representative, the employer shall make available for review
all the employer's records pertaining to the claim. Such review is to be
made at a reasonable time, not to exceed three business days, and place. The
claimant, upon written request, shall provide the employer or its
representative with an appropriate written authorization to obtain records
pertaining to the claim.
(12) Upon written request
by the claimant or claimant's representative, the employer shall provide
copies of the employer's records pertaining to the claim within three
business days. Extensions may be granted to the employer, but not to exceed
fourteen days from the date of the request, with agreement of the claimant or
claimant's representative. An employer may provide copies in electronic
form, or through electronic access to the records, with agreement of the
requesting party. Except as provided for in this rule, an employer may not
assess a fee or charge the claimant or the claimant's representative for
the cost of providing a copy of the employer's records pertaining to the
claim. Where the employer has previously provided a copy of the record or
records pertaining to the claim to the claimant or the claimant's
representative, the employer may charge a fee for the copies. The
employer's fee shall be based upon the actual cost of furnishing such
copies, not to exceed twenty-five cents per page.
(13) The employer shall inform a claimant,
and the bureau, in writing, within thirty days from the filing of the claim
with the employer, as to what conditions the employer has recognized as related
to the injury or occupational disease and what conditions, if any, the employer
has denied. The same timeframe applies to medical only claims.
(14) The employer shall post notices of
its self-insuring status indicating the location for the filing of a claim and
the job title and department of the employees designated by the employer to be
the person or persons responsible for the processing of workers'
compensation claims.
(15) A public employer, except for a board
of county commissioners described in division (G) of section 4123.01 of the
Revised Code, a board of a county hospital, or a publicly owned utility, who is
granted the status of self-insuring employer pursuant to section 4123.35 of the
Revised Code shall comply with the section 4123.353 of the Revised
Code.
(16) A self-insuring employer is
prohibited from entering into a professional employer organization agreement as
defined in section 4125.01 of the Revised Code, or an alternate employer
organization agreement as defined in section 4133.01 of the Revised Code, as a
client employer.
(M) If a state insurance fund employer or a succeeding employer,
as described in rule 4123-17-02 of the Administrative Code, applies for the
privilege of paying compensation and benefits directly, by transferring from
the state insurance fund to self-insurance, the actuary of the bureau shall
determine the amount of the liability of such employer to the bureau for its
proportionate share of any deficit in the fund. To determine an employer's
liability under this rule, the actuary of the bureau shall develop a set of
factors to be applied to the pure premium paid by an employer on payroll for a
seven-year period, as described in this paragraph. The factors shall be based
on the full past experience of the industrial commission and the bureau as
reflected in the most recent calendar year end audited combined financial
statement of the industrial commission and the bureau, and shall also
accommodate any projected change in the financial condition of the fund for the
current calendar year, or any additional period for which an audited combined
financial statement is unavailable. The factors shall be revised annually
effective July first based on the most recent calendar year audited combined
financial statement and the projected change in the financial condition of the
fund in the current calendar year or any additional period for which an audited
combined financial statement is unavailable. The annually revised factors shall
be adopted by rule 4123-17-40 of the Administrative Code. Factors effective
July first of each year shall apply to all applications for self-insurance
filed on or after July first of that year through June thirtieth of the
following year. The revised factors shall be applied to the pure premium paid
by the employer on payroll for the seven calendar accident years ending
December thirty-first of the year preceding the year in which the factors are
adopted under rule 4123-17-40 of the Administrative Code. In the event the
audited combined financial statement of the industrial commission and the
bureau reveals that no deficit exists, or in the event the application of the
factors adopted by rule 4123-17-40 of the Administrative Code yields a negative
number, the employer will incur no liability under this paragraph, but will not
receive any refund for prior premiums paid except for those matters
specifically addressed in paragraph (M)(2) of this rule. As used in this rule,
"pure premium paid" means premiums actually paid under a base rating
plan or an experience rating plan and minimum premium paid under a
retrospective rating plan. It does not include premiums billed for actual
claims costs, including reserves at the end of ten years, under a retrospective
rating plan. Obligations under a retrospective rating plan remain the
responsibility of the employer regardless of the employer's status. The
same principles shall apply to cases of a merger by a self-insuring employer
and a state insurance fund employer under the self-insuring employer's
status. In addition, the following provisions shall apply:
(1) Within thirty days of
the receipt from the employer of the necessary forms and of a separate
statement of assets and liabilities, the bureau will forward to the employer a
letter stating the amount of liability (if any) due the state insurance fund as
outlined in this rule and a copy of the computation of such liability (if
any).
(2) Within thirty days of
the date of mailing of the letter by the bureau as outlined in paragraph (M)(1)
of this rule, the employer shall reply by a letter, acknowledging that the
employer agrees with the amount of liability specified in the letter and that
there are no protests or claims hearings pending which could affect the amount
of the liability. If any such matters are pending and would affect the
liability, they must be detailed and set forth in the letter from the employer.
This letter must also acknowledge that any protest letters, applications for
disability relief as provided in section 4123.343 of the Revised Code, or other
requests affecting the employer's state fund insurance experience filed
subsequent to the date of this letter shall be considered invalid for both
rebate of premium on state insurance fund experience and the calculation of
liability cited in this rule. This letter must also specify the suggested
effective date of the transfer to self-insurance which the employer requests,
subject to paragraph (B) of this rule which requires that the effective date
must be at least ninety days after the date the application forms are received
by the bureau. Failure to comply with the requirements set forth herein shall
terminate further consideration of the application.
(3) Subsequent to the
approval of the employer's self-insured status and the effective date
thereof by the administrator of workers' compensation, the bureau shall
issue a settlement sheet statement containing the adjustment required above and
billing for an advance deposit as required by other rules of the bureau. The
employer shall pay the amounts required by this paragraph, pay the contribution
to the self-insuring employers' guaranty fund under section 4123.351 of
the Revised Code, submit a performance surety bond or additional security, if
required by the bureau, and estimated final payroll report as a state insurance
fund employer, all within thirty days of the date of the mailing of the
self-insured certificate.
(4) The final adjustments
of all premiums due the state insurance fund for the final payroll reports and
final bureau audit, if any, as well as the pending protests letters,
applications for disability relief as provided in section 4123.343 of the
Revised Code, or other requests affecting the risk's state insurance fund
experience as specified in paragraph (M)(2) of this rule, shall all be settled
and paid within six months from the date of transfer from the state insurance
fund to self-insured status. Employer's records must be made available
promptly for final audit which must also be completed within six months from
the date of the transfer from the state insurance fund to
self-insurance.
(N) If there is any change involving additions, mergers,
deletions of entities, or ownership changes of a self-insuring employer, which
would materially affect the administration of the employer's self-insuring
employer program or the number of employees included in such program, the
employer shall notify the bureau's self-insured department within thirty
days after the change occurs. Based upon the information provided or additional
information requested by the bureau, the bureau will determine the effect of
the change on the employer's self-insuring employer status, the adequacy
of the employer's contribution to the self-insuring employers'
guaranty fund, and the need for additional security.
(O) If a public employer granted the privilege of self-insurance
elects to provide coverage for volunteers and probationers performing services
for the political subdivision, the employer shall include such volunteers and
probationers as employees to be covered under the self-insurance policy. A
public employer's coverage of a work-relief employee under Chapter 4127.
of the Revised Code shall be included in the public employer's
self-insurance policy.
(P) If a self-insuring employer or applicant elects to secure
excess loss coverage which undertakes to indemnify a self-insuring employer
against all or part of such employer's loss as provided for in division
(B) of section 4123.82 of the Revised Code, that self-insuring employer or
applicant shall:
(1) Name the bureau as a
beneficiary to the excess loss coverage contract in the event the bureau takes
over administration and payment of the claims of the self-insuring employer or
applicant;
(2) Provide a complete
copy of the excess loss coverage contract, including the declaration page, to
the bureau's self-insured department; and
(3) In the event of
default by the self-insuring employer or applicant, the excess loss coverage
must indemnify the bureau for all compensation, benefits, and disabled
workers' relief fund costs incurred on claims covered by the excess loss
coverage contract.
(Q) If a self-insuring employer or applicant elects to secure
excess loss coverage which undertakes to indemnify a self-insuring employer
against all or part of such employer's loss as provided for in division
(B) of section 4123.82 of the Revised Code, this election cannot be used to
satisfy any security requirements of self-insurance as provided in sections
4123.35 and 4123.351 of the Revised Code.
