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Self-insurance
Self-Insured employers are those employers who have applied for and been granted the
authority to administer their own workers’ compensation claims. Self-insured
employers agree to abide by BWC and the Industrial Commission’s rules and
regulations and to provide accurate and timely payments of compensation and benefits
subject to the provisions of those rules. (Reference OAC 4123-19-03
and ORC 4123.35) Self-insured employers pay benefits directly to their injured employees
and service providers and do not pay workers' compensation premiums into the State
Insurance Fund. Disputes in self-insured claims are referred to the Ohio Industrial
Commission. Self-insurance is considered a privilege and BWC monitors the activity
of all self-insuring employers in Ohio to ensure that benefits are paid fairly,
promptly and in accordance with Ohio law. Injured workers who feel their
self-insured employer is not operating in compliance with the rules governing
self-insurance are eligible to file a complaint which will be investigated by BWC's
Self-Insured Department.
Qualifications to become a self-insuring employer
In order to be granted the privilege of self-insurance, an employer must meet several requirements, including:
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Have a minimum of 500 employees in Ohio;
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Have two year’s experience with the state insurance fund;
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Operate a BWC-certified Qualified Health Plan (QHP);
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Demonstrate strong financial stability;
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Possess the ability to administer workers’ compensation insurance;
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Maintain an account with a financial institution in Ohio, or draw compensation
checks from the same account as the payroll checks.
An employer wishing to become self-insured must complete an application and submit
it to BWC. The application must include:
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All financial records, documents and data necessary to provide a full
financial disclosure (as audited by a certified public accountant);
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A balance sheet and a profit and loss statement for the year and the
previous four years;
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An organizational plan for claims processing;
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A proposed plan to inform employees of the change from state fund to
self-insured including procedures employees are to follow when filing for
compensation and benefits.
Applications for self-insurance are heard by the Self-Insured Review Panel. Once a
decision is made the panel signs a resolution either approving or denying the
request. If approved, BWC assigns a new policy number to the employer. This number
should then be used on all future correspondence with BWC.
Click here for more information regarding becoming a self-insured employer
Group Rating Plan
The group-rating plan allows employers who operate similar businesses to group
together to potentially achieve lower premium rates than they could individually.
While every employer’s situation is unique, group rating could save an employer as
much as 90 percent in premiums.
Each group is sponsored by an organization, such as a trade association or chamber
of commerce. Each sponsoring organization requires members to pay a membership
fee.
The sponsoring organization must submit a safety plan to BWC each year. The group
must demonstrate common purpose and possess results from safety and loss-control
practices.
The sponsoring organization forms the group and has control over which members will
participate. BWC adjusts rates for group members taken as a whole, as if the group
was one big company. Each year, BWC reviews each group rating application to ensure
that each group meets the criteria for group rating.
Click here for more information on general group rating information requirements
Retrospective Rating Plan
The retrospective rating plan allows an employer to assume a portion of the risk in
return for a possible reduction in premiums. The greater the assumed risk, the
greater the potential reduction in premiums.
Employers who have a consistent claims history and proven safety practices will
benefit the most from retrospective rating. The employer can customize the
retrospective rating plan to control the amount of risk assumed and the potential
savings by selecting the maximum premium and maximum claims costs he or she is
willing to pay. Employers may benefit from retrospective rating because of lower
initial premiums and realized cash flow advantages, which increase as premiums are
saved.
The drawbacks of retrospective rating may outweigh the advantages for some
employers. For example, if an employer incurred high losses in a rating year,
actual premiums could double.
Click here for more information for retrospective rating
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