As Introduced 1
123rd General Assembly 4
Regular Session S. B. No. 266 5
1999-2000 6
SENATOR HORN 8
_________________________________________________________________ 10
A B I L L
To amend sections 4123.01 and 4123.35 of the Revised 12
Code to permit public employers, other than the 13
state, to become self-insuring employers for 14
purposes of the Workers' Compensation Law. 15
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO: 17
Section 1. That sections 4123.01 and 4123.35 of the 19
Revised Code be amended to read as follows: 20
Sec. 4123.01. As used in this chapter: 29
(A)(1) "Employee" means: 31
(a) Every person in the service of the state, or of any 33
county, municipal corporation, township, or school district 34
therein, including regular members of lawfully constituted police 35
and fire departments of municipal corporations and townships, 36
whether paid or volunteer, and wherever serving within the state 37
or on temporary assignment outside thereof, and executive 38
officers of boards of education, under any appointment or 39
contract of hire, express or implied, oral or written, including 40
any elected official of the state, or of any county, municipal 41
corporation, or township, or members of boards of education;. 42
As used in division (A)(1)(a) of this section, the term 45
"regular members of lawfully constituted police and fire
departments" includes the following persons when the person 46
responds to an inherently dangerous situation that calls for an 47
immediate response on the part of the person, regardless of 48
whether the person is within the limits of the jurisdiction of 49
the person's regular employment or voluntary service when 50
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responding, on the condition that the person responds to the 51
situation as the person otherwise would if the person were on 52
duty in the person's jurisdiction.
(i) Off-duty peace officers. As used in division 54
(A)(1)(a)(i) of this section, "peace officer" means a member of 56
the organized police department of any municipal corporation, 57
including a member of the organized police department of a 58
municipal corporation in an adjoining state serving in Ohio under 59
a contract pursuant to section 737.04 of the Revised Code, member 61
of a police force employed by a metropolitan housing authority 62
under division (D) of section 3735.31 of the Revised Code, member 65
of a police force employed by a regional transit authority under
division (Y) of section 306.05 of the Revised Code, state 68
university law enforcement officer appointed under section
3345.04 of the Revised Code, Ohio veterans' home police officer 70
appointed under section 5907.02 of the Revised Code, police 72
constable of any township, police officer of a township or joint 73
township police district, state highway patrol trooper, and 74
member of a qualified nonprofit corporation police department 75
established pursuant to section 1702.80 of the Revised Code.
As used in division (A)(1)(a) of this section with respect 78
to off-duty peace officers, "jurisdiction" means the limits of 79
the municipal corporation, township, metropolitan housing
authority housing project, regional transit authority facilities 80
or areas of a municipal corporation that have been agreed to by a 81
regional transit authority and a municipal corporation located 82
within its territorial jurisdiction, college, university, or Ohio 83
veterans' home in which the peace officer is appointed, employed, 84
or elected.
(ii) Off-duty firefighters, whether paid or volunteer, of 86
a lawfully constituted fire department. As used in division 87
(A)(1)(a) of this section with respect to off-duty firefighters, 89
"jurisdiction" means the limits of the political subdivision, 90
joint ambulance district, fire district, or joint fire district 91
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in which the firefighter is appointed or employed.
(iii) Off-duty first responders, emergency medical 93
technicians-basic, emergency medical technicians-intermediate, or 94
emergency medical technicians-paramedic, whether paid or 95
volunteer, of an ambulance service organization or emergency 96
medical service organization pursuant to Chapter 4765. of the 97
Revised Code. As used in division (A)(1)(a) of this section with 100
respect to off-duty first responders and emergency medical
technicians, "jurisdiction" means the limits of the political 101
subdivision or joint ambulance district in which the first 103
responder or emergency medical technician is employed or 104
volunteers as a first responder or emergency medical technician. 105
(b) Every person in the service of any person, firm, or 107
private corporation, including any public service corporation, 108
that (i) employs one or more persons regularly in the same 109
business or in or about the same establishment under any contract 110
of hire, express or implied, oral or written, including aliens 111
and minors, household workers who earn one hundred sixty dollars 112
or more in cash in any calendar quarter from a single household 113
and casual workers who earn one hundred sixty dollars or more in 114
cash in any calendar quarter from a single employer, or (ii) is 115
bound by any such contract of hire or by any other written 116
contract, to pay into the state insurance fund the premiums 117
provided by this chapter. 118
(c) Every person who performs labor or provides services 121
pursuant to a construction contract, as defined in section 122
4123.79 of the Revised Code, if at least ten of the following
criteria apply:
(i) The person is required to comply with instructions 125
from the other contracting party regarding the manner or method 126
of performing services;
(ii) The person is required by the other contracting party 129
to have particular training;
(iii) The person's services are integrated into the 132
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regular functioning of the other contracting party; 133
(iv) The person is required to perform the work 135
personally;
(v) The person is hired, supervised, or paid by the other 137
contracting party;
(vi) A continuing relationship exists between the person 140
and the other contracting party that contemplates continuing or 141
recurring work even if the work is not full time; 142
(vii) The person's hours of work are established by the 145
other contracting party;
(viii) The person is required to devote full time to the 148
business of the other contracting party;
(ix) The person is required to perform the work on the 151
premises of the other contracting party;
(x) The person is required to follow the order of work set 154
by the other contracting party;
(xi) The person is required to make oral or written 157
reports of progress to the other contracting party; 158
(xii) The person is paid for services on a regular basis 161
such as hourly, weekly, or monthly;
(xiii) The person's expenses are paid for by the other 163
contracting party;
(xiv) The person's tools and materials are furnished by 166
the other contracting party;
(xv) The person is provided with the facilities used to 168
perform services;
(xvi) The person does not realize a profit or suffer a 171
loss as a result of the services provided;
(xvii) The person is not performing services for a number 174
of employers at the same time;
(xviii) The person does not make the same services 176
available to the general public; 177
(xix) The other contracting party has a right to discharge 180
the person;
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(xx) The person has the right to end the relationship with 183
the other contracting party without incurring liability pursuant 184
to an employment contract or agreement. 185
Every person in the service of any independent contractor 187
or subcontractor who has failed to pay into the state insurance 188
fund the amount of premium determined and fixed by the 189
administrator of workers' compensation for the person's 190
employment or occupation or if a self-insuring employer has 191
failed to pay compensation and benefits directly to the 192
employer's injured and to the dependents of the employer's killed 193
employees as required by section 4123.35 of the Revised Code, 195
shall be considered as the employee of the person who has entered 196
into a contract, whether written or verbal, with such independent 197
contractor unless such employees or their legal representatives 198
or beneficiaries elect, after injury or death, to regard such 199
independent contractor as the employer.
(2) "Employee" does not mean: 201
(a) A duly ordained, commissioned, or licensed minister or 203
assistant or associate minister of a church in the exercise of 204
ministry; or 205
(b) Any officer of a family farm corporation. 207
Any employer may elect to include as an "employee" within 209
this chapter, any person excluded from the definition of 210
"employee" pursuant to division (A)(2) of this section. If an 211
employer is a partnership, sole proprietorship, or family farm 212
corporation, such employer may elect to include as an "employee" 213
within this chapter, any member of such partnership, the owner of 214
the sole proprietorship, or the officers of the family farm 215
corporation. In the event of an election, the employer shall 216
serve upon the bureau of workers' compensation written notice 217
naming the persons to be covered, include such employee's 218
remuneration for premium purposes in all future payroll reports, 219
and no person excluded from the definition of "employee" pursuant 220
to division (A)(2) of this section, proprietor, or partner shall 221
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be deemed an employee within this division until the employer has 222
served such notice. 223
For informational purposes only, the bureau shall prescribe 225
such language as it considers appropriate, on such of its forms 226
as it considers appropriate, to advise employers of their right 227
to elect to include as an "employee" within this chapter a sole 228
proprietor, any member of a partnership, the officers of a family 229
farm corporation, or a person excluded from the definition of 230
"employee" under division (A)(2)(a) of this section, that they 231
should check any health and disability insurance policy, or other 232
form of health and disability plan or contract, presently 233
covering them, or the purchase of which they may be considering, 234
to determine whether such policy, plan, or contract excludes 235
benefits for illness or injury that they might have elected to 236
have covered by workers' compensation. 237
(B) "Employer" means: 239
(1) The state, including state hospitals, each county, 241
municipal corporation, township, school district, and hospital 242
owned by a political subdivision or subdivisions other than the 243
state; 244
(2) Every person, firm, and private corporation, including 246
any public service corporation, that (a) has in service one or 247
more employees regularly in the same business or in or about the 248
same establishment under any contract of hire, express or 249
implied, oral or written, or (b) is bound by any such contract of 250
hire or by any other written contract, to pay into the insurance 251
fund the premiums provided by this chapter. 252
All such employers are subject to this chapter. Any member 254
of a firm or association, who regularly performs manual labor in 255
or about a mine, factory, or other establishment, including a 256
household establishment, shall be considered an employee in 257
determining whether such person, firm, or private corporation, or 258
public service corporation, has in its service, one or more 259
employees and the employer shall report the income derived from 260
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such labor to the bureau as part of the payroll of such employer, 261
and such member shall thereupon be entitled to all the benefits 262
of an employee. 263
(C) "Injury" includes any injury, whether caused by 265
external accidental means or accidental in character and result, 266
received in the course of, and arising out of, the injured 267
employee's employment. "Injury" does not include: 268
(1) Psychiatric conditions except where the conditions 270
have arisen from an injury or occupational disease; 271
(2) Injury or disability caused primarily by the natural 274
deterioration of tissue, an organ, or part of the body; 275
(3) Injury or disability incurred in voluntary 277
participation in an employer-sponsored recreation or fitness 278
activity if the employee signs a waiver of the employee's right 279
to compensation or benefits under this chapter prior to engaging 280
in the recreation or fitness activity. 281
(D) "Child" includes a posthumous child and a child 283
legally adopted prior to the injury. 284
(E) "Family farm corporation" means a corporation founded 286
for the purpose of farming agricultural land in which the 287
majority of the voting stock is held by and the majority of the 288
stockholders are persons or the spouse of persons related to each 289
other within the fourth degree of kinship, according to the rules 290
of the civil law, and at least one of the related persons is 291
residing on or actively operating the farm, and none of whose 292
stockholders are a corporation. A family farm corporation does 293
not cease to qualify under this division where, by reason of any 294
devise, bequest, or the operation of the laws of descent or 295
distribution, the ownership of shares of voting stock is 296
transferred to another person, as long as that person is within 297
the degree of kinship stipulated in this division. 298
(F) "Occupational disease" means a disease contracted in 300
the course of employment, which by its causes and the 301
characteristics of its manifestation or the condition of the 302
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employment results in a hazard which distinguishes the employment 303
in character from employment generally, and the employment
creates a risk of contracting the disease in greater degree and 304
in a different manner from the public in general. 305
(G) "Self-insuring employer" means any of the following 307
categories of employers if AN EMPLOYER WHO IS granted the 308
privilege of paying compensation and benefits directly under 310
section 4123.35 of the Revised Code: 311
(1) Any employer mentioned in division (B)(2) of this 313
section; 314
(2) A board of county hospital trustees; 316
(3) A publicly owned utility; 318
(4) A, INCLUDING A board of county commissioners for the 320
sole purpose of constructing a sports facility as defined in 322
section 307.696 of the Revised Code, provided that the electors 323
of the county in which the sports facility is to be built have 324
approved construction of a sports facility by ballot election no 325
later than November 6, 1997. 326
(H) "PUBLIC EMPLOYER" MEANS AN EMPLOYER AS DEFINED IN 328
DIVISION (B)(1) OF THIS SECTION. 329
Sec. 4123.35. (A) Except as provided in this section, 338
every employer mentioned in division (B)(2) of section 4123.01 of 339
the Revised Code, and every publicly owned utility shall pay 340
semiannually in the months of January and July into the state 342
insurance fund the amount of annual premium the administrator of 343
workers' compensation fixes for the employment or occupation of 344
the employer, the amount of which premium to be paid by each 345
employer to be determined by the classifications, rules, and 346
rates made and published by the administrator. The employer
shall pay semiannually a further sum of money into the state 347
insurance fund as may be ascertained to be due from the employer 350
by applying the rules of the administrator, and a receipt or 351
certificate certifying that payment has been made shall be mailed 353
immediately to the employer by the bureau of workers'
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compensation. The receipt or certificate is prima facie evidence 354
of the payment of the premium. 355
The bureau of workers' compensation shall verify with the 357
secretary of state the existence of all corporations and 358
organizations making application for workers' compensation 359
coverage and shall require every such application to include the 360
employer's federal identification number. 361
An employer as defined in division (B)(2) of section 363
4123.01 of the Revised Code who has contracted with a 364
subcontractor is liable for the unpaid premium due from any 365
subcontractor with respect to that part of the payroll of the 366
subcontractor that is for work performed pursuant to the contract 368
with the employer.
Division (A) of this section providing for the payment of 372
premiums semiannually does not apply to any employer who was a
subscriber to the state insurance fund prior to January 1, 1914, 373
or who may first become a subscriber to the fund in any month 374
other than January or July. Instead, the semiannual premiums 375
shall be paid by those employers from time to time upon the 376
expiration of the respective periods for which payments into the 377
fund have been made by them.
The administrator shall adopt rules to permit employers to 379
make periodic payments of the semiannual premium due under this 380
division. The rules shall include provisions for the assessment 381
of interest charges, where appropriate, and for the assessment of 382
penalties when an employer fails to make timely premium payments. 384
An employer who timely pays the amounts due under this division 385
is entitled to all of the benefits and protections of this 386
chapter. Upon receipt of payment, the bureau immediately shall 387
mail a receipt or certificate to the employer certifying that
payment has been made, which receipt is prima-facie evidence of 389
payment. Workers' compensation coverage under this chapter 390
continues uninterrupted upon timely receipt of payment under this 391
division.
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Every PUBLIC employer mentioned in division (B)(1) of 393
section 4123.01 of the Revised Code, except boards of county 394
hospital trustees PUBLIC EMPLOYERS that are self-insuring 395
employers under this section, shall comply with sections 4123.38 397
to 4123.41, and 4123.48 of the Revised Code in regard to the 399
contribution of moneys to the public insurance fund. 400
(B) Provided, that employers mentioned in division (B)(2) 402
of section 4123.01 of the Revised Code, boards of county hospital 403
trustees, and publicly owned utilities EMPLOYERS, OTHER THAN THE 404
STATE, who will abide by the rules of the administrator and who 406
may be of sufficient financial ability to render certain the 407
payment of compensation to injured employees or the dependents of 408
killed employees, and the furnishing of medical, surgical, 409
nursing, and hospital attention and services and medicines, and 410
funeral expenses, equal to or greater than is provided for in 411
sections 4123.52, 4123.55 to 4123.62, and 4123.64 to 4123.67 of 412
the Revised Code, and who do not desire to insure the payment 413
thereof or indemnify themselves against loss sustained by the 414
direct payment thereof, upon a finding of such facts by the 415
administrator, may be granted the privilege to pay individually 416
compensation, and furnish medical, surgical, nursing, and 417
hospital services and attention and funeral expenses directly to 418
injured employees or the dependents of killed employees, thereby 419
being granted status as a self-insuring employer. The 421
administrator may charge employers, boards of county hospital 422
trustees, or publicly owned utilities who apply for the status as 423
a self-insuring employer a reasonable application fee to cover 424
the bureau's costs in connection with processing and making a 425
determination with respect to an application. All 426
ALL employers granted such status shall demonstrate 429
sufficient financial and administrative ability to assure that 430
all obligations under this section are promptly met. The 431
administrator shall deny the privilege where the employer is 432
unable to demonstrate the employer's ability to promptly meet all 433
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the obligations imposed on the employer by this section. The 434
(1) THE administrator shall consider, but is not limited 437
to, the following factors, where applicable, in determining the 438
employer's ability to meet all of the obligations imposed on the 439
employer by this section: 440
(1)(a) The employer employs a minimum of five hundred 442
employees in this state; 443
(2)(b) The employer has operated in this state for a 445
minimum of two years, provided that an employer who has 446
purchased, acquired, or otherwise succeeded to the operation of a 447
business, or any part thereof, situated in this state that has 448
operated for at least two years in this state, also shall 449
qualify;
(3)(c) Where the employer previously contributed to the 451
state insurance fund or is a successor employer as defined by 452
bureau rules, the amount of the buy-out, as defined by bureau 453
rules;
(4)(d) The sufficiency of the employer's assets located in 455
this state to insure the employer's solvency in paying 456
compensation directly; 457
(5)(e) The financial records, documents, and data, 459
certified by a certified public accountant, necessary to provide 460
the employer's full financial disclosure. The records, 461
documents, and data include, but are not limited to, balance 462
sheets and profit and loss history for the current year and 463
previous four years. 464
(6)(f) The employer's organizational plan for the 466
administration of the workers' compensation law; 467
(7)(g) The employer's proposed plan to inform employees of 469
the change from a state fund insurer to a self-insuring employer, 470
the procedures the employer will follow as a self-insuring 471
employer, and the employees' rights to compensation and benefits; 472
and 473
(8)(h) The employer has either an account in a financial 475
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institution in this state, or if the employer maintains an 476
account with a financial institution outside this state, ensures 477
that workers' compensation checks are drawn from the same account 478
as payroll checks or the employer clearly indicates that payment 479
will be honored by a financial institution in this state. 480
The administrator may waive the requirements of divisions 482
(B)(1)(a) and (2)(b) of this section and the requirement of 484
division (B)(5)(1)(e) of this section that the financial records, 485
documents, and data be certified by a certified public 487
accountant. The administrator shall adopt rules establishing the 488
criteria that an employer shall meet in order for the 489
administrator to waive the requirement of division (B)(5)(1)(e) 490
of this section. Such rules may require additional security of 492
that employer pursuant to division (E) of section 4123.351 of the 493
Revised Code. The administrator shall not grant the status of 494
self-insuring employer to any public employer, other than 495
publicly owned utilities and boards of county hospital trustees 496
THE STATE.
(2) WHEN CONSIDERING THE APPLICATION OF A PUBLIC EMPLOYER, 498
EXCEPT FOR A BOARD OF COUNTY COMMISSIONERS DESCRIBED IN DIVISION 499
(G) OF SECTION 4123.01 OF THE REVISED CODE, A BOARD OF A COUNTY 500
HOSPITAL, OR A PUBLICLY OWNED UTILITY, THE ADMINISTRATOR SHALL 502
VERIFY THAT THE PUBLIC EMPLOYER SATISFIES ALL OF THE FOLLOWING 503
REQUIREMENTS AS THE REQUIREMENTS APPLY TO THAT PUBLIC EMPLOYER: 504
(a) FOR THE TWO-YEAR PERIOD PRECEDING APPLICATION UNDER 506
THIS SECTION, THE PUBLIC EMPLOYER HAS MAINTAINED AN UNVOTED DEBT 507
CAPACITY EQUAL TO AT LEAST TWO TIMES THE AMOUNT OF THE CURRENT 510
ANNUAL PREMIUM ESTABLISHED BY THE ADMINISTRATOR UNDER THIS
CHAPTER FOR THAT PUBLIC EMPLOYER FOR THE YEAR IMMEDIATELY 511
PRECEDING THE YEAR IN WHICH THE PUBLIC EMPLOYER MAKES APPLICATION 512
UNDER THIS SECTION. 513
(b) FOR EACH OF THE TWO FISCAL YEARS PRECEDING APPLICATION 515
UNDER THIS SECTION, THE UNAPPROPRIATED AND UNOBLIGATED YEAR-END 517
BALANCE IN THE PUBLIC EMPLOYER'S GENERAL FUND IS EQUAL TO AT 518
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LEAST FIVE PER CENT OF THE PUBLIC EMPLOYER'S GENERAL FUND 519
REVENUES FOR THE FISCAL YEAR. 520
(c) FOR THE FIVE-YEAR PERIOD PRECEDING APPLICATION UNDER 522
THIS SECTION, THE PUBLIC EMPLOYER, TO THE EXTENT APPLICABLE, HAS 524
COMPLIED FULLY WITH THE CONTINUING DISCLOSURE REQUIREMENTS 525
ESTABLISHED IN RULES ADOPTED BY THE UNITED STATES SECURITIES AND 527
EXCHANGE COMMISSION UNDER 17 C.F.R. 240.15c2-12. 529
(d) FOR THE FIVE-YEAR PERIOD PRECEDING APPLICATION UNDER 531
THIS SECTION, THE PUBLIC EMPLOYER HAS NOT HAD ITS LOCAL 532
GOVERNMENT FUND DISTRIBUTION WITHHELD ON ACCOUNT OF THE PUBLIC 533
EMPLOYER BEING INDEBTED OR OTHERWISE OBLIGATED TO THE STATE. 534
(e) FOR THE FIVE-YEAR PERIOD PRECEDING APPLICATION UNDER 536
THIS SECTION, THE PUBLIC EMPLOYER HAS NOT BEEN UNDER A FISCAL 537
EMERGENCY PURSUANT TO SECTION 118.04 OR 3316.03 OF THE REVISED 539
CODE.
(f) THE PUBLIC EMPLOYER FILES AN ANNUAL FINANCIAL REPORT 541
WITH THE AUDITOR OF STATE AS REQUIRED UNDER SECTION 117.38 OF THE 542
REVISED CODE. 543
(g) ON THE DATE OF APPLICATION, THE PUBLIC EMPLOYER HOLDS 545
A DEBT RATING OF AA3 OR HIGHER ACCORDING TO MOODY'S INVESTORS 546
SERVICE, INC., OR A COMPARABLE RATING BY AN INDEPENDENT RATING 547
AGENCY SIMILAR TO MOODY'S INVESTORS SERVICE, INC. 548
(h) THE PUBLIC EMPLOYER AGREES TO GENERATE AN ANNUAL 550
ACCUMULATING BOOK RESERVE IN ITS FINANCIAL STATEMENTS REFLECTING 551
AN ACTUARIALLY GENERATED RESERVE ADEQUATE TO PAY PROJECTED CLAIMS 553
UNDER THIS CHAPTER FOR THE APPLICABLE PERIOD OF TIME, AS
DETERMINED BY THE ADMINISTRATOR. 554
(i) ANY ADDITIONAL CRITERIA THAT THE ADMINISTRATOR ADOPTS 556
BY RULE PURSUANT TO DIVISION (E) OF THIS SECTION. 557
THE ADMINISTRATOR SHALL NOT APPROVE THE APPLICATION OF A 559
PUBLIC EMPLOYER, EXCEPT FOR A BOARD OF COUNTY COMMISSIONERS 560
DESCRIBED IN DIVISION (G) OF SECTION 4123.01 OF THE REVISED CODE, 562
A BOARD OF A COUNTY HOSPITAL, OR PUBLICLY OWNED UTILITY, WHO DOES 563
NOT SATISFY ALL OF THE REQUIREMENTS LISTED IN DIVISION (B)(2) OF 564
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THIS SECTION.
AS USED IN THIS DIVISION, "UNVOTED DEBT CAPACITY" MEANS THE 566
AMOUNT OF MONEY THAT A PUBLIC EMPLOYER MAY BORROW WITHOUT VOTER 568
APPROVAL OF A TAX LEVY.
(C) Provided, that a A board of county commissioners 570
mentioned DESCRIBED in division (G)(4) of section 4123.01 of the 572
Revised Code, as an employer, that will abide by the rules of the 574
administrator and that may be of sufficient financial ability to 575
render certain the payment of compensation to injured employees 576
or the dependents of killed employees, and the furnishing of 577
medical, surgical, nursing, and hospital attention and services 578
and medicines, and funeral expenses, equal to or greater than is
provided for in sections 4123.52, 4123.55 to 4123.62, and 4123.64 579
to 4123.67 of the Revised Code, and that does not desire to 582
insure the payment thereof or indemnify itself against loss 583
sustained by the direct payment thereof, upon a finding of such 584
facts by the administrator, may be granted the privilege to pay 585
individually compensation, and furnish medical, surgical, 586
nursing, and hospital services and attention and funeral expenses
directly to injured employees or the dependents of killed 587
employees, thereby being granted status as a self-insuring 588
employer. The administrator may charge a board of county 590
commissioners mentioned DESCRIBED in division (G)(4) of section 591
4123.01 of the Revised Code that applies for the status as a 593
self-insuring employer a reasonable application fee to cover the 594
bureau's costs in connection with processing and making a 595
determination with respect to an application. All employers
granted such status shall demonstrate sufficient financial and 596
administrative ability to assure that all obligations under this 597
section are promptly met. The administrator shall deny the 598
privilege where the employer is unable to demonstrate the 599
employer's ability to promptly meet all the obligations imposed 600
on the employer by this section. The administrator shall 601
consider, but is not limited to, the following factors, where 602
15
applicable, in determining the employer's ability to meet all of 603
the obligations imposed on the board as an employer by this 604
section:
(1) The board as an employer employs a minimum of five 606
hundred employees in this state; 607
(2) The board has operated in this state for a minimum of 609
two years;
(3) Where the board previously contributed to the state 611
insurance fund or is a successor employer as defined by bureau 612
rules, the amount of the buy-out, as defined by bureau rules; 613
(4) The sufficiency of the board's assets located in this 615
state to insure the board's solvency in paying compensation 616
directly;
(5) The financial records, documents, and data, certified 618
by a certified public accountant, necessary to provide the 619
board's full financial disclosure. The records, documents, and 620
data include, but are not limited to, balance sheets and profit 621
and loss history for the current year and previous four years. 622
(6) The board's organizational plan for the administration 624
of the workers' compensation law; 625
(7) The board's proposed plan to inform employees of the 627
proposed self-insurance, the procedures the board will follow as 628
a self-insuring employer, and the employees' rights to 629
compensation and benefits;
(8) The board has either an account in a financial 631
institution in this state, or if the board maintains an account 633
with a financial institution outside this state, ensures that 634
workers' compensation checks are drawn from the same account as 635
payroll checks or the board clearly indicates that payment will 636
be honored by a financial institution in this state; 637
(9) The board shall provide the administrator a surety 639
bond in an amount equal to one hundred twenty-five per cent of 640
the projected losses as determined by the administrator. 641
(D) The administrator shall require a surety bond from all 643
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self-insuring employers, issued pursuant to section 4123.351 of 644
the Revised Code, that is sufficient to compel, or secure to 645
injured employees, or to the dependents of employees killed, the 646
payment of compensation and expenses, which shall in no event be 647
less than that paid or furnished out of the state insurance fund 648
in similar cases to injured employees or to dependents of killed 649
employees whose employers contribute to the fund, except when an 650
employee of the employer, who has suffered the loss of a hand, 651
arm, foot, leg, or eye prior to the injury for which compensation 652
is to be paid, and thereafter suffers the loss of any other of 653
the members as the result of any injury sustained in the course 654
of and arising out of the employee's employment, the compensation 656
to be paid by the self-insuring employer is limited to the
disability suffered in the subsequent injury, additional 657
compensation, if any, to be paid by the bureau out of the surplus 659
created by section 4123.34 of the Revised Code. 660
(E) In addition to the requirements of this section, the 662
administrator shall make and publish rules governing the manner 663
of making application and the nature and extent of the proof 664
required to justify a finding of fact by the administrator as to 665
granting the status of a self-insuring employer, which rules 666
shall be general in their application, one of which rules shall 667
provide that all self-insuring employers shall pay into the state 668
insurance fund such amounts as are required to be credited to the 669
surplus fund in division (B) of section 4123.34 of the Revised 670
Code. THE ADMINISTRATOR MAY ADOPT RULES ESTABLISHING 671
REQUIREMENTS IN ADDITION TO THE REQUIREMENTS DESCRIBED IN 672
DIVISION (B)(2) OF THIS SECTION THAT A PUBLIC EMPLOYER SHALL MEET 673
IN ORDER TO QUALIFY FOR SELF-INSURING STATUS. 674
Employers shall secure directly from the bureau central 676
offices application forms upon which the bureau shall stamp a 677
designating number. Prior to submission of an application, an 678
employer shall make available to the bureau, and the bureau shall 679
review, the information described in divisions DIVISION (B)(1) to 681
17
(8) of this section, AND PUBLIC EMPLOYERS SHALL MAKE AVAILABLE, 682
AND THE BUREAU SHALL REVIEW, THE INFORMATION NECESSARY TO VERIFY 683
WHETHER THE PUBLIC EMPLOYER MEETS THE REQUIREMENTS LISTED IN 684
DIVISION (B)(2) OF THIS SECTION. An employer shall file the 685
completed application forms with an application fee, which shall 686
cover the costs of processing the application, as established by 687
the administrator, by rule, with the bureau at least ninety days 688
prior to the effective date of the employer's new status as a 689
self-insuring employer. The application form is not deemed 690
complete until all the required information is attached thereto. 691
The bureau shall only accept applications that contain the 692
required information.
(F) The bureau shall review completed applications within 694
a reasonable time. If the bureau determines to grant an employer 695
the status as a self-insuring employer, the bureau shall issue a 696
statement, containing its findings of fact, that is prepared by 697
the bureau and signed by the administrator. If the bureau 698
determines not to grant the status as a self-insuring employer, 699
the bureau shall notify the employer of the determination and 700
require the employer to continue to pay its full premium into the 701
state insurance fund. The administrator also shall adopt rules 702
establishing a minimum level of performance as a criterion for 703
granting and maintaining the status as a self-insuring employer 704
and fixing time limits beyond which failure of the self-insuring 705
employer to provide for the necessary medical examinations and 706
evaluations may not delay a decision on a claim. 707
(G) The administrator shall adopt rules setting forth 709
procedures for auditing the program of self-insuring employers. 710
The bureau shall conduct the audit upon a random basis or 711
whenever the bureau has grounds for believing that an A 712
SELF-INSURING employer is not in full compliance with bureau 714
rules or this chapter.
The administrator shall monitor the programs conducted by 716
self-insuring employers, to ensure compliance with bureau 717
18
requirements and for that purpose, shall develop and issue to 718
self-insuring employers standardized forms for use by the 719
SELF-INSURING employer in all aspects of the SELF-INSURING 720
employers' direct compensation program and for reporting of 722
information to the bureau.
The bureau shall receive and transmit to the SELF-INSURING 724
employer all complaints concerning any self-insuring employer. 725
In the case of a complaint against a self-insuring employer, the 726
administrator shall handle the complaint through the 727
self-insurance division of the bureau. The bureau shall maintain 728
a file by employer of all complaints received that relate to the 729
employer. The bureau shall evaluate each complaint and take 730
appropriate action.
The administrator shall adopt as a rule a prohibition 732
against any self-insuring employer from harassing, dismissing, or 733
otherwise disciplining any employee making a complaint, which 734
rule shall provide for a financial penalty to be levied by the 735
administrator payable by the offending SELF-INSURING employer. 736
(H) For the purpose of making determinations as to whether 738
to grant status as a self-insuring employer, the administrator 739
may subscribe to and pay for a credit reporting service that 740
offers financial and other business information about individual 741
employers. The costs in connection with the bureau's 742
subscription or individual reports from the service about an 743
applicant may be included in the application fee charged 744
employers under this section. 745
(I) The administrator, notwithstanding other provisions of 748
this chapter, may permit a self-insuring employer to resume 749
payment of premiums to the state insurance fund with appropriate 750
credit modifications to the employer's basic premium rate as such 751
rate is determined pursuant to section 4123.29 of the Revised 752
Code.
(J) On the first day of July of each year, the 754
administrator shall calculate separately each self-insuring 755
19
employer's assessments for the safety and hygiene fund, 756
administrative costs pursuant to section 4123.342 of the Revised 757
Code, and for the portion of the surplus fund under division (B) 758
of section 4123.34 of the Revised Code that is not used for 759
handicapped reimbursement, on the basis of the paid compensation 760
attributable to the individual self-insuring employer according 761
to the following calculation: 762
(1) The total assessment against all self-insuring 764
employers as a class for each fund and for the administrative 765
costs for the year that the assessment is being made, as 766
determined by the administrator, divided by the total amount of 767
paid compensation for the previous calendar year attributable to 768
all amenable self-insuring employers; 769
(2) Multiply the quotient in division (J)(1) of this 771
section by the total amount of paid compensation for the previous 772
calendar year that is attributable to the individual 773
self-insuring employer for whom the assessment is being 774
determined. Each self-insuring employer shall pay the assessment 775
that results from this calculation, unless the assessment 776
resulting from this calculation falls below a minimum assessment, 777
which minimum assessment the administrator shall determine on the 778
first day of July of each year with the advice and consent of the 779
workers' compensation oversight commission, in which event, the 780
self-insuring employer shall pay the minimum assessment. 781
In determining the total amount due for the total 783
assessment against all self-insuring employers as a class for 784
each fund and the administrative assessment, the administrator 785
shall reduce proportionately the total for each fund and 787
assessment by the amount of money in the self-insurance 788
assessment fund as of the date of the computation of the 789
assessment. 790
The administrator shall calculate the assessment for the 792
portion of the surplus fund under division (B) of section 4123.34 793
of the Revised Code that is used for handicapped reimbursement in 794
20
the same manner as set forth in divisions (J)(1) and (2) of this 796
section except that the administrator shall calculate the total 797
assessment for this portion of the surplus fund only on the basis 798
of those self-insuring employers that retain participation in the 799
handicapped reimbursement program and the individual 800
self-insuring employer's proportion of paid compensation shall be 801
calculated only for those self-insuring employers who retain 802
participation in the handicapped reimbursement program. The 803
administrator, as the administrator determines appropriate, may 805
determine the total assessment for the handicapped portion of the 806
surplus fund in accordance with sound actuarial principles. 807
The administrator shall calculate the assessment for the 809
portion of the surplus fund under division (B) of section 4123.34 810
of the Revised Code that under division (D) of section 4121.66 of 811
the Revised Code is used for rehabilitation costs in the same 812
manner as set forth in divisions (J)(1) and (2) of this section, 814
except that the administrator shall calculate the total 815
assessment for this portion of the surplus fund only on the basis 816
of those self-insuring employers who have not made the election 817
to make payments directly under division (D) of section 4121.66 818
of the Revised Code and an individual self-insuring employer's 819
proportion of paid compensation only for those self-insuring 820
employers who have not made that election. 821
An employer who no longer is a self-insuring employer in 823
this state or who no longer is operating in this state, shall 824
continue to pay assessments for administrative costs and for the 825
portion of the surplus fund under division (B) of section 4123.34 826
of the Revised Code that is not used for handicapped 827
reimbursement, based upon paid compensation attributable to 828
claims that occurred while the employer was a self-insuring 829
employer within this state. 830
(K) There is hereby created in the state treasury the 832
self-insurance assessment fund. All investment earnings of the 833
fund shall be deposited in the fund. The administrator shall use 834
21
the money in the self-insurance assessment fund only for 835
administrative costs as specified in section 4123.341 of the 836
Revised Code. 837
(L) Every self-insuring employer shall certify, in 839
affidavit form subject to the penalty for perjury, to the bureau 840
the amount of the self-insuring employer's paid compensation for 841
the previous calendar year. In reporting paid compensation paid 842
for the previous year, a self-insuring employer shall exclude 843
from the total amount of paid compensation any reimbursement the 844
SELF-INSURING employer receives in the previous calendar year 846
from the surplus fund pursuant to section 4123.512 of the Revised 847
Code for any paid compensation. The self-insuring employer also 848
shall exclude from the paid compensation reported any amount 849
recovered under section 4123.93 of the Revised Code and any 850
amount that is determined not to have been payable to or on 851
behalf of a claimant in any final administrative or judicial 852
proceeding. The self-insuring employer shall exclude such 853
amounts from the paid compensation reported in the reporting 854
period subsequent to the date the determination is made. The 855
administrator shall adopt rules, in accordance with Chapter 119. 856
of the Revised Code, establishing the date by which self-insuring 857
employers must submit such information and the amount of the 858
assessments provided for in division (J) of this section for 859
employers who have been granted self-insuring status within the 861
last calendar year. 862
The administrator shall include any assessment that remains 864
unpaid for previous assessment periods in the calculation and 865
collection of any assessments due under this division or division 866
(J) of this section. 867
(M) As used in this section, "paid compensation" means all 869
amounts paid by a self-insuring employer for living maintenance 870
benefits, all amounts for compensation paid pursuant to sections 871
4121.63, 4121.67, 4123.56, 4123.57, 4123.58, 4123.59, 4123.60, 872
and 4123.64 of the Revised Code, all amounts paid as wages in 873
22
lieu of such compensation, all amounts paid in lieu of such 874
compensation under a nonoccupational accident and sickness 875
program fully funded by the self-insuring employer, and all 876
amounts paid by a self-insuring employer for a violation of a 877
specific safety standard pursuant to Section 35 of Article II, 878
Ohio Constitution and section 4121.47 of the Revised Code. 879
(N) Should any section of this chapter or Chapter 4121. of 881
the Revised Code providing for self-insuring employers' 882
assessments based upon compensation paid be declared 883
unconstitutional by a final decision of any court, then that 884
section of the Revised Code declared unconstitutional shall 885
revert back to the section in existence prior to November 3, 886
1989, providing for assessments based upon payroll. 887
(O) The administrator may grant a self-insuring employer 889
the privilege to self-insure a construction project entered into 891
by the self-insuring employer that is scheduled for completion 892
within six years after the date the project begins, and the total 893
cost of which is estimated to exceed one hundred million dollars. 895
The administrator may waive such cost and time criteria and grant 896
a self-insuring employer the privilege to self-insure a
construction project regardless of the time needed to complete 897
the construction project and provided that the cost of the 898
construction project is estimated to exceed fifty million 899
dollars. A self-insuring employer who desires to self-insure a 901
construction project shall submit to the administrator an
application listing the dates the construction project is 902
scheduled to begin and end, the estimated cost of the 904
construction project, the contractors and subcontractors whose
employees are to be self-insured by the self-insuring employer, 905
the provisions of a safety program that is specifically designed 906
for the construction project, and a statement as to whether a 907
collective bargaining agreement governing the rights, duties, and 908
obligations of each of the parties to the agreement with respect 909
to the construction project exists between the self-insuring 910
23
employer and a labor organization. 911
A self-insuring employer may apply to self-insure the 913
employees of either of the following: 914
(1) All contractors and subcontractors who perform labor 916
or work or provide materials for the construction project; 917
(2) All contractors and, at the administrator's 919
discretion, a substantial number of all the subcontractors who 920
perform labor or work or provide materials for the construction 921
project.
Upon approval of the application, the administrator shall 923
mail a certificate granting the privilege to self-insure the 924
construction project to the self-insuring employer. The 925
certificate shall contain the name of the self-insuring employer 926
and the name, address, and telephone number of the self-insuring 927
employer's representatives who are responsible for administering
workers' compensation claims for the construction project. The 928
self-insuring employer shall post the certificate in a 929
conspicuous place at the site of the construction project. 930
The administrator shall maintain a record of the 932
contractors and subcontractors whose employees are covered under 933
the certificate issued to the self-insured employer. A 934
self-insuring employer immediately shall notify the administrator 935
when any contractor or subcontractor is added or eliminated from 936
inclusion under the certificate.
Upon approval of the application, the self-insuring 938
employer is responsible for the administration and payment of all 939
claims under this chapter and Chapter 4121. of the Revised Code 940
for the employees of the contractor and subcontractors covered 941
under the certificate who receive injuries or are killed in the 942
course of and arising out of employment on the construction 944
project, or who contract an occupational disease in the course of 945
employment on the construction project. For purposes of this
chapter and Chapter 4121. of the Revised Code, a claim that is 947
administered and paid in accordance with this division is
24
considered a claim against the self-insuring employer listed in 948
the certificate. A contractor or subcontractor included under 949
the certificate shall report to the self-insuring employer listed 950
in the certificate, all claims that arise under this chapter and 951
Chapter 4121. of the Revised Code in connection with the 953
construction project for which the certificate is issued. 954
A self-insuring employer who complies with this division is 956
entitled to the protections provided under this chapter and 957
Chapter 4121. of the Revised Code with respect to the employees 959
of the contractors and subcontractors covered under a certificate 960
issued under this division for death or injuries that arise out 961
of, or death, injuries, or occupational diseases that arise in
the course of, those employees' employment on that construction 963
project, as if the employees were employees of the self-insuring 964
employer, provided that the self-insuring employer also complies 965
with this section. No employee of the contractors and
subcontractors covered under a certificate issued under this 966
division shall be considered the employee of the self-insuring 967
employer listed in that certificate for any purposes other than 968
this chapter and Chapter 4121. of the Revised Code. Nothing in 969
this division gives a self-insuring employer authority to control 970
the means, manner, or method of employment of the employees of 971
the contractors and subcontractors covered under a certificate 972
issued under this division. 973
The contractors and subcontractors included under a 975
certificate issued under this division are entitled to the 976
protections provided under this chapter and Chapter 4121. of the 977
Revised Code with respect to the contractor's or subcontractor's 978
employees who are employed on the construction project which is 979
the subject of the certificate, for death or injuries that arise 980
out of, or death, injuries, or occupational diseases that arise 981
in the course of, those employees' employment on that 982
construction project.
The contractors and subcontractors included under a 984
25
certificate issued under this division shall identify in their 985
payroll records the employees who are considered the employees of 986
the self-insuring employer listed in that certificate for 987
purposes of this chapter and Chapter 4121. of the Revised Code, 989
and the amount that those employees earned for employment on the 990
construction project that is the subject of that certificate. 991
Notwithstanding any provision to the contrary under this chapter
and Chapter 4121. of the Revised Code, the administrator shall 994
exclude the payroll that is reported for employees who are 995
considered the employees of the self-insuring employer listed in
that certificate, and that the employees earned for employment on 996
the construction project that is the subject of that certificate, 997
when determining those contractors' or subcontractors' premiums 998
or assessments required under this chapter and Chapter 4121. of 999
the Revised Code. A self-insuring employer issued a certificate 1,000
under this division shall include in the amount of paid 1,001
compensation it reports pursuant to division (L) of this section, 1,002
the amount of paid compensation the self-insuring employer paid 1,003
pursuant to this division for the previous calendar year. 1,004
Nothing in this division shall be construed as altering the 1,006
rights of employees under this chapter and Chapter 4121. of the 1,007
Revised Code as those rights existed prior to September 17, 1996. 1,010
Nothing in this division shall be construed as altering the 1,012
rights devolved under sections 2305.31 and 4123.82 of the Revised 1,013
Code as those rights existed prior to September 17, 1996. 1,014
As used in this division, "privilege to self-insure a 1,016
construction project" means privilege to pay individually 1,017
compensation, and to furnish medical, surgical, nursing, and 1,018
hospital services and attention and funeral expenses directly to 1,019
injured employees or the dependents of killed employees. 1,020
(P) A self-insuring employer whose application is granted 1,022
under division (O) of this section shall designate a safety 1,024
professional to be responsible for the administration and 1,026
enforcement of the safety program that is specifically designed 1,027
26
for the construction project that is the subject of the 1,028
application.
A self-insuring employer whose application is granted under 1,030
division (O) of this section shall employ an ombudsperson for the 1,032
construction project that is the subject of the application. The 1,033
ombudsperson shall have experience in workers' compensation or 1,034
the construction industry, or both. The ombudsperson shall 1,035
perform all of the following duties:
(1) Communicate with and provide information to employees 1,037
who are injured in the course of, or whose injury arises out of 1,038
employment on the construction project, or who contract an 1,039
occupational disease in the course of employment on the 1,040
construction project;
(2) Investigate the status of a claim upon the request of 1,042
an employee to do so; 1,043
(3) Provide information to claimants, third party 1,045
administrators, employers, and other persons to assist those 1,046
persons in protecting their rights under this chapter and Chapter 1,047
4121. of the Revised Code. 1,048
A self-insuring employer whose application is granted under 1,050
division (O) of this section shall post the name of the safety 1,052
professional and the ombudsperson and instructions for contacting
the safety professional and the ombudsperson in a conspicuous 1,053
place at the site of the construction project. 1,054
(Q) The administrator may consider all of the following 1,057
when deciding whether to grant a self-insuring employer the 1,058
privilege to self-insure a construction project as provided under 1,059
division (O) of this section: 1,060
(1) Whether the self-insuring employer has an 1,062
organizational plan for the administration of the workers' 1,063
compensation law; 1,064
(2) Whether the safety program that is specifically 1,066
designed for the construction project provides for the safety of 1,067
employees employed on the construction project, is applicable to 1,069
27
all contractors and subcontractors who perform labor or work or 1,070
provide materials for the construction project, and has a
component, a safety training program that complies with standards 1,071
adopted pursuant to the "Occupational Safety and Health Act of 1,072
1970," 84 Stat. 1590, 29 U.S.C.A. 651, and provides for 1,073
continuing management and employee involvement; 1,074
(3) Whether granting the privilege to self-insure the 1,076
construction project will reduce the costs of the construction 1,077
project; 1,078
(4) Whether the self-insuring employer has employed an 1,080
ombudsperson as required under division (P) of this section; 1,082
(5) Whether the self-insuring employer has sufficient 1,084
surety to secure the payment of claims for which the 1,085
self-insuring employer would be responsible pursuant to the 1,086
granting of the privilege to self-insure a construction project 1,087
under division (O) of this section. 1,089
Section 2. That existing sections 4123.01 and 4123.35 of 1,091
the Revised Code are hereby repealed. 1,092