REPRESENTATIVES Williams, Collier, Schaffer, Young, Lendrum, Aslanides, Blasdel, Webster, Flowers, Calvert, Gilb, Setzer, Damschroder, Wolpert, Kearns, Cates, Hagan, Buehrer, G. Smith, Fessler, Seitz, Faber

To amend sections 4123.35, 4123.66, 4123.93, and

1

4123.931 of the Revised Code to modify the

2

subrogation provisions of the Workers' Compensation

3

Law and to increase the workers' compensation

4

funeral expense benefit cap.

5

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1. That sections 4123.35, 4123.66, 4123.93, and	6
4123.931 of the Revised Code be amended to read as follows:	7

Sec. 4123.35.  (A) Except as provided in this section,	8
every employer mentioned in division (B)(2) of section 4123.01 of	9
the Revised Code, and every publicly owned utility shall pay	10
semiannually in the months of January and July into the state	11
insurance fund the amount of annual premium the administrator of	12
workers' compensation fixes for the employment or occupation of	13
the employer, the amount of which premium to be paid by each	14
employer to be determined by the classifications, rules, and rates	15
made and published by the administrator. The employer shall pay	16
semiannually a further sum of money into the state insurance fund	17
as may be ascertained to be due from the employer by applying the	18
rules of the administrator, and a receipt or certificate	19
certifying that payment has been made shall be mailed immediately	20
to the employer by the bureau of workers' compensation. The	21
receipt or certificate is prima-facie evidence of the payment of	22
the premium.	23

The bureau of workers' compensation shall verify with the	24
secretary of state the existence of all corporations and	25
organizations making application for workers' compensation	26
coverage and shall require every such application to include the	27
employer's federal identification number.	28

An employer as defined in division (B)(2) of section 4123.01	29
of the Revised Code who has contracted with a subcontractor is	30
liable for the unpaid premium due from any subcontractor with	31
respect to that part of the payroll of the subcontractor that is	32
for work performed pursuant to the contract with the employer.	33

Division (A) of this section providing for the payment of	34
premiums semiannually does not apply to any employer who was a	35
subscriber to the state insurance fund prior to January 1, 1914,	36
or who may first become a subscriber to the fund in any month	37
other than January or July. Instead, the semiannual premiums	38
shall be paid by those employers from time to time upon the	39
expiration of the respective periods for which payments into the	40
fund have been made by them.	41

The administrator shall adopt rules to permit employers to	42
make periodic payments of the semiannual premium due under this	43
division. The rules shall include provisions for the assessment	44
of interest charges, where appropriate, and for the assessment of	45
penalties when an employer fails to make timely premium payments.	46
An employer who timely pays the amounts due under this division is	47
entitled to all of the benefits and protections of this chapter.	48
Upon receipt of payment, the bureau immediately shall mail a	49
receipt or certificate to the employer certifying that payment has	50
been made, which receipt is prima-facie evidence of payment.	51
Workers' compensation coverage under this chapter continues	52
uninterrupted upon timely receipt of payment under this division.	53

Every public employer, except public employers that are	54
self-insuring employers under this section, shall comply with	55
sections 4123.38 to 4123.41, and 4123.48 of the Revised Code in	56
regard to the contribution of moneys to the public insurance fund.	57

(B) Employers who will abide by the rules of the	58
administrator and who may be of sufficient financial ability to	59
render certain the payment of compensation to injured employees or	60
the dependents of killed employees, and the furnishing of medical,	61
surgical, nursing, and hospital attention and services and	62
medicines, and funeral expenses, equal to or greater than is	63
provided for in sections 4123.52, 4123.55 to 4123.62, and 4123.64	64
to 4123.67 of the Revised Code, and who do not desire to insure	65
the payment thereof or indemnify themselves against loss sustained	66
by the direct payment thereof, upon a finding of such facts by the	67
administrator, may be granted the privilege to pay individually	68
compensation, and furnish medical, surgical, nursing, and hospital	69
services and attention and funeral expenses directly to injured	70
employees or the dependents of killed employees, thereby being	71
granted status as a self-insuring employer. The administrator may	72
charge employers who apply for the status as a self-insuring	73
employer a reasonable application fee to cover the bureau's costs	74
in connection with processing and making a determination with	75
respect to an application.	76

All employers granted such status shall demonstrate	77
sufficient financial and administrative ability to assure that all	78
obligations under this section are promptly met. The	79
administrator shall deny the privilege where the employer is	80
unable to demonstrate the employer's ability to promptly meet all	81
the obligations imposed on the employer by this section.	82

(1) The administrator shall consider, but is not limited to,	83
the following factors, where applicable, in determining the	84
employer's ability to meet all of the obligations imposed on the	85
employer by this section:	86

(a) The employer employs a minimum of five hundred employees	87
in this state;	88

(b) The employer has operated in this state for a minimum of	89
two years, provided that an employer who has purchased, acquired,	90
or otherwise succeeded to the operation of a business, or any part	91
thereof, situated in this state that has operated for at least two	92
years in this state, also shall qualify;	93

(c) Where the employer previously contributed to the state	94
insurance fund or is a successor employer as defined by bureau	95
rules, the amount of the buyout, as defined by bureau rules;	96

(d) The sufficiency of the employer's assets located in this	97
state to insure the employer's solvency in paying compensation	98
directly;	99

(e) The financial records, documents, and data, certified by	100
a certified public accountant, necessary to provide the employer's	101
full financial disclosure. The records, documents, and data	102
include, but are not limited to, balance sheets and profit and	103
loss history for the current year and previous four years.	104

(f) The employer's organizational plan for the	105
administration of the workers' compensation law;	106

(g) The employer's proposed plan to inform employees of the	107
change from a state fund insurer to a self-insuring employer, the	108
procedures the employer will follow as a self-insuring employer,	109
and the employees' rights to compensation and benefits; and	110

(h) The employer has either an account in a financial	111
institution in this state, or if the employer maintains an account	112
with a financial institution outside this state, ensures that	113
workers' compensation checks are drawn from the same account as	114
payroll checks or the employer clearly indicates that payment will	115
be honored by a financial institution in this state.	116

The administrator may waive the requirements of divisions	117
(B)(1)(a) and (b) of this section and the requirement of division	118
(B)(1)(e) of this section that the financial records, documents,	119
and data be certified by a certified public accountant. The	120
administrator shall adopt rules establishing the criteria that an	121
employer shall meet in order for the administrator to waive the	122
requirement of division (B)(1)(e) of this section. Such rules may	123
require additional security of that employer pursuant to division	124
(E) of section 4123.351 of the Revised Code.	125

The administrator shall not grant the status of self-insuring	126
employer to the state, except that the administrator may grant the	127
status of self-insuring employer to a state institution of higher	128
education, excluding its hospitals, that meets the requirements of	129
division (B)(2) of this section.	130

(2) When considering the application of a public employer,	131
except for a board of county commissioners described in division	132
(G) of section 4123.01 of the Revised Code, a board of a county	133
hospital, or a publicly owned utility, the administrator shall	134
verify that the public employer satisfies all of the following	135
requirements as the requirements apply to that public employer:	136

(a) For the two-year period preceding application under this	137
section, the public employer has maintained an unvoted debt	138
capacity equal to at least two times the amount of the current	139
annual premium established by the administrator under this chapter	140
for that public employer for the year immediately preceding the	141
year in which the public employer makes application under this	142
section.	143

(b) For each of the two fiscal years preceding application	144
under this section, the unreserved and undesignated year-end fund	145
balance in the public employer's general fund is equal to at least	146
five per cent of the public employer's general fund revenues for	147
the fiscal year computed in accordance with generally accepted	148
accounting principles.	149

(c) For the five-year period preceding application under	150
this section, the public employer, to the extent applicable, has	151
complied fully with the continuing disclosure requirements	152
established in rules adopted by the United States securities and	153
exchange commission under 17 C.F.R. 240.15c 2-12.	154

(d) For the five-year period preceding application under	155
this section, the public employer has not had its local government	156
fund distribution withheld on account of the public employer being	157
indebted or otherwise obligated to the state.	158

(e) For the five-year period preceding application under	159
this section, the public employer has not been under a fiscal	160
watch or fiscal emergency pursuant to section 118.023, 118.04, or	161
3316.03 of the Revised Code.	162

(f) For the public employer's fiscal year preceding	163
application under this section, the public employer has obtained	164
an annual financial audit as required under section 117.10 of the	165
Revised Code, which has been released by the auditor of state	166
within seven months after the end of the public employer's fiscal	167
year.	168

(g) On the date of application, the public employer holds a	169
debt rating of Aa3 or higher according to Moody's investors	170
service, inc., or a comparable rating by an independent rating	171
agency similar to Moody's investors service, inc.	172

(h) The public employer agrees to generate an annual	173
accumulating book reserve in its financial statements reflecting	174
an actuarially generated reserve adequate to pay projected claims	175
under this chapter for the applicable period of time, as	176
determined by the administrator.	177

(i) For a public employer that is a hospital, the public	178
employer shall submit audited financial statements showing the	179
hospital's overall liquidity characteristics, and the	180
administrator shall determine, on an individual basis, whether the	181
public employer satisfies liquidity standards equivalent to the	182
liquidity standards of other public employers.	183

(j) Any additional criteria that the administrator adopts by	184
rule pursuant to division (E) of this section.	185

The administrator shall not approve the application of a	186
public employer, except for a board of county commissioners	187
described in division (G) of section 4123.01 of the Revised Code,	188
a board of a county hospital, or publicly owned utility, who does	189
not satisfy all of the requirements listed in division (B)(2) of	190
this section.	191

(C) A board of county commissioners described in division	192
(G) of section 4123.01 of the Revised Code, as an employer, that	193
will abide by the rules of the administrator and that may be of	194
sufficient financial ability to render certain the payment of	195
compensation to injured employees or the dependents of killed	196
employees, and the furnishing of medical, surgical, nursing, and	197
hospital attention and services and medicines, and funeral	198
expenses, equal to or greater than is provided for in sections	199
4123.52, 4123.55 to 4123.62, and 4123.64 to 4123.67 of the Revised	200
Code, and that does not desire to insure the payment thereof or	201
indemnify itself against loss sustained by the direct payment	202
thereof, upon a finding of such facts by the administrator, may be	203
granted the privilege to pay individually compensation, and	204
furnish medical, surgical, nursing, and hospital services and	205
attention and funeral expenses directly to injured employees or	206
the dependents of killed employees, thereby being granted status	207
as a self-insuring employer. The administrator may charge a board	208
of county commissioners described in division (G) of section	209
4123.01 of the Revised Code that applies for the status as a	210
self-insuring employer a reasonable application fee to cover the	211
bureau's costs in connection with processing and making a	212
determination with respect to an application. All employers	213
granted such status shall demonstrate sufficient financial and	214
administrative ability to assure that all obligations under this	215
section are promptly met. The administrator shall deny the	216
privilege where the employer is unable to demonstrate the	217
employer's ability to promptly meet all the obligations imposed on	218
the employer by this section. The administrator shall consider,	219
but is not limited to, the following factors, where applicable, in	220
determining the employer's ability to meet all of the obligations	221
imposed on the board as an employer by this section:	222

(1) The board as an employer employs a minimum of five	223
hundred employees in this state;	224

(2) The board has operated in this state for a minimum of	225
two years;	226

(3) Where the board previously contributed to the state	227
insurance fund or is a successor employer as defined by bureau	228
rules, the amount of the buyout, as defined by bureau rules;	229

(4) The sufficiency of the board's assets located in this	230
state to insure the board's solvency in paying compensation	231
directly;	232

(5) The financial records, documents, and data, certified by	233
a certified public accountant, necessary to provide the board's	234
full financial disclosure. The records, documents, and data	235
include, but are not limited to, balance sheets and profit and	236
loss history for the current year and previous four years.	237

(6) The board's organizational plan for the administration	238
of the workers' compensation law;	239

(7) The board's proposed plan to inform employees of the	240
proposed self-insurance, the procedures the board will follow as a	241
self-insuring employer, and the employees' rights to compensation	242
and benefits;	243

(8) The board has either an account in a financial	244
institution in this state, or if the board maintains an account	245
with a financial institution outside this state, ensures that	246
workers' compensation checks are drawn from the same account as	247
payroll checks or the board clearly indicates that payment will be	248
honored by a financial institution in this state;	249

(9) The board shall provide the administrator a surety bond	250
in an amount equal to one hundred twenty-five per cent of the	251
projected losses as determined by the administrator.	252

(D) The administrator shall require a surety bond from all	253
self-insuring employers, issued pursuant to section 4123.351 of	254
the Revised Code, that is sufficient to compel, or secure to	255
injured employees, or to the dependents of employees killed, the	256
payment of compensation and expenses, which shall in no event be	257
less than that paid or furnished out of the state insurance fund	258
in similar cases to injured employees or to dependents of killed	259
employees whose employers contribute to the fund, except when an	260
employee of the employer, who has suffered the loss of a hand,	261
arm, foot, leg, or eye prior to the injury for which compensation	262
is to be paid, and thereafter suffers the loss of any other of the	263
members as the result of any injury sustained in the course of and	264
arising out of the employee's employment, the compensation to be	265
paid by the self-insuring employer is limited to the disability	266
suffered in the subsequent injury, additional compensation, if	267
any, to be paid by the bureau out of the surplus created by	268
section 4123.34 of the Revised Code.	269

(E) In addition to the requirements of this section, the	270
administrator shall make and publish rules governing the manner of	271
making application and the nature and extent of the proof required	272
to justify a finding of fact by the administrator as to granting	273
the status of a self-insuring employer, which rules shall be	274
general in their application, one of which rules shall provide	275
that all self-insuring employers shall pay into the state	276
insurance fund such amounts as are required to be credited to the	277
surplus fund in division (B) of section 4123.34 of the Revised	278
Code. The administrator may adopt rules establishing requirements	279
in addition to the requirements described in division (B)(2) of	280
this section that a public employer shall meet in order to qualify	281
for self-insuring status.	282

Employers shall secure directly from the bureau central	283
offices application forms upon which the bureau shall stamp a	284
designating number. Prior to submission of an application, an	285
employer shall make available to the bureau, and the bureau shall	286
review, the information described in division (B)(1) of this	287
section, and public employers shall make available, and the bureau	288
shall review, the information necessary to verify whether the	289
public employer meets the requirements listed in division (B)(2)	290
of this section. An employer shall file the completed application	291
forms with an application fee, which shall cover the costs of	292
processing the application, as established by the administrator,	293
by rule, with the bureau at least ninety days prior to the	294
effective date of the employer's new status as a self-insuring	295
employer. The application form is not deemed complete until all	296
the required information is attached thereto. The bureau shall	297
only accept applications that contain the required information.	298

(F) The bureau shall review completed applications within a	299
reasonable time. If the bureau determines to grant an employer	300
the status as a self-insuring employer, the bureau shall issue a	301
statement, containing its findings of fact, that is prepared by	302
the bureau and signed by the administrator. If the bureau	303
determines not to grant the status as a self-insuring employer,	304
the bureau shall notify the employer of the determination and	305
require the employer to continue to pay its full premium into the	306
state insurance fund. The administrator also shall adopt rules	307
establishing a minimum level of performance as a criterion for	308
granting and maintaining the status as a self-insuring employer	309
and fixing time limits beyond which failure of the self-insuring	310
employer to provide for the necessary medical examinations and	311
evaluations may not delay a decision on a claim.	312

(G) The administrator shall adopt rules setting forth	313
procedures for auditing the program of self-insuring employers.	314
The bureau shall conduct the audit upon a random basis or whenever	315
the bureau has grounds for believing that a self-insuring employer	316
is not in full compliance with bureau rules or this chapter.	317

The administrator shall monitor the programs conducted by	318
self-insuring employers, to ensure compliance with bureau	319
requirements and for that purpose, shall develop and issue to	320
self-insuring employers standardized forms for use by the	321
self-insuring employer in all aspects of the self-insuring	322
employers' direct compensation program and for reporting of	323
information to the bureau.	324

The bureau shall receive and transmit to the self-insuring	325
employer all complaints concerning any self-insuring employer. In	326
the case of a complaint against a self-insuring employer, the	327
administrator shall handle the complaint through the	328
self-insurance division of the bureau. The bureau shall maintain	329
a file by employer of all complaints received that relate to the	330
employer. The bureau shall evaluate each complaint and take	331
appropriate action.	332

The administrator shall adopt as a rule a prohibition against	333
any self-insuring employer from harassing, dismissing, or	334
otherwise disciplining any employee making a complaint, which rule	335
shall provide for a financial penalty to be levied by the	336
administrator payable by the offending self-insuring employer.	337

(H) For the purpose of making determinations as to whether	338
to grant status as a self-insuring employer, the administrator may	339
subscribe to and pay for a credit reporting service that offers	340
financial and other business information about individual	341
employers. The costs in connection with the bureau's subscription	342
or individual reports from the service about an applicant may be	343
included in the application fee charged employers under this	344
section.	345

(I) The administrator, notwithstanding other provisions of	346
this chapter, may permit a self-insuring employer to resume	347
payment of premiums to the state insurance fund with appropriate	348
credit modifications to the employer's basic premium rate as such	349
rate is determined pursuant to section 4123.29 of the Revised	350
Code.	351

(J) On the first day of July of each year, the administrator	352
shall calculate separately each self-insuring employer's	353
assessments for the safety and hygiene fund, administrative costs	354
pursuant to section 4123.342 of the Revised Code, and for the	355
portion of the surplus fund under division (B) of section 4123.34	356
of the Revised Code that is not used for handicapped	357
reimbursement, on the basis of the paid compensation attributable	358
to the individual self-insuring employer according to the	359
following calculation:	360

(1) The total assessment against all self-insuring employers	361
as a class for each fund and for the administrative costs for the	362
year that the assessment is being made, as determined by the	363
administrator, divided by the total amount of paid compensation	364
for the previous calendar year attributable to all amenable	365
self-insuring employers;	366

(2) Multiply the quotient in division (J)(1) of this section	367
by the total amount of paid compensation for the previous calendar	368
year that is attributable to the individual self-insuring employer	369
for whom the assessment is being determined. Each self-insuring	370
employer shall pay the assessment that results from this	371
calculation, unless the assessment resulting from this calculation	372
falls below a minimum assessment, which minimum assessment the	373
administrator shall determine on the first day of July of each	374
year with the advice and consent of the workers' compensation	375
oversight commission, in which event, the self-insuring employer	376
shall pay the minimum assessment.	377

In determining the total amount due for the total assessment	378
against all self-insuring employers as a class for each fund and	379
the administrative assessment, the administrator shall reduce	380
proportionately the total for each fund and assessment by the	381
amount of money in the self-insurance assessment fund as of the	382
date of the computation of the assessment.	383

The administrator shall calculate the assessment for the	384
portion of the surplus fund under division (B) of section 4123.34	385
of the Revised Code that is used for handicapped reimbursement in	386
the same manner as set forth in divisions (J)(1) and (2) of this	387
section except that the administrator shall calculate the total	388
assessment for this portion of the surplus fund only on the basis	389
of those self-insuring employers that retain participation in the	390
handicapped reimbursement program and the individual self-insuring	391
employer's proportion of paid compensation shall be calculated	392
only for those self-insuring employers who retain participation in	393
the handicapped reimbursement program. The administrator, as the	394
administrator determines appropriate, may determine the total	395
assessment for the handicapped portion of the surplus fund in	396
accordance with sound actuarial principles.	397

The administrator shall calculate the assessment for the	398
portion of the surplus fund under division (B) of section 4123.34	399
of the Revised Code that under division (D) of section 4121.66 of	400
the Revised Code is used for rehabilitation costs in the same	401
manner as set forth in divisions (J)(1) and (2) of this section,	402
except that the administrator shall calculate the total assessment	403
for this portion of the surplus fund only on the basis of those	404
self-insuring employers who have not made the election to make	405
payments directly under division (D) of section 4121.66 of the	406
Revised Code and an individual self-insuring employer's proportion	407
of paid compensation only for those self-insuring employers who	408
have not made that election.	409

An employer who no longer is a self-insuring employer in this	410
state or who no longer is operating in this state, shall continue	411
to pay assessments for administrative costs and for the portion of	412
the surplus fund under division (B) of section 4123.34 of the	413
Revised Code that is not used for handicapped reimbursement, based	414
upon paid compensation attributable to claims that occurred while	415
the employer was a self-insuring employer within this state.	416

(K) There is hereby created in the state treasury the	417
self-insurance assessment fund. All investment earnings of the	418
fund shall be deposited in the fund. The administrator shall use	419
the money in the self-insurance assessment fund only for	420
administrative costs as specified in section 4123.341 of the	421
Revised Code.	422

(L) Every self-insuring employer shall certify, in affidavit	423
form subject to the penalty for perjury, to the bureau the amount	424
of the self-insuring employer's paid compensation for the previous	425
calendar year. In reporting paid compensation paid for the	426
previous year, a self-insuring employer shall exclude from the	427
total amount of paid compensation any reimbursement the	428
self-insuring employer receives in the previous calendar year from	429
the surplus fund pursuant to section 4123.512 of the Revised Code	430
for any paid compensation. The self-insuring employer also shall	431
exclude from the paid compensation reported any amount recovered	432
under section 4123.934123.931 of the Revised Code and any amount	433
that is determined not to have been payable to or on behalf of a	434
claimant in any final administrative or judicial proceeding. The	435
self-insuring employer shall exclude such amounts from the paid	436
compensation reported in the reporting period subsequent to the	437
date the determination is made. The administrator shall adopt	438
rules, in accordance with Chapter 119. of the Revised Code,	439
establishing the date by which self-insuring employers must submit	440
such information and the amount of the assessments provided for in	441
division (J) of this section for employers who have been granted	442
self-insuring status within the last calendar year.	443

The administrator shall include any assessment that remains	444
unpaid for previous assessment periods in the calculation and	445
collection of any assessments due under this division or division	446
(J) of this section.	447

(M) As used in this section, "paid compensation" means all	448
amounts paid by a self-insuring employer for living maintenance	449
benefits, all amounts for compensation paid pursuant to sections	450
4121.63, 4121.67, 4123.56, 4123.57, 4123.58, 4123.59, 4123.60, and	451
4123.64 of the Revised Code, all amounts paid as wages in lieu of	452
such compensation, all amounts paid in lieu of such compensation	453
under a nonoccupational accident and sickness program fully funded	454
by the self-insuring employer, and all amounts paid by a	455
self-insuring employer for a violation of a specific safety	456
standard pursuant to Section 35 of Article II, Ohio Constitution	457
and section 4121.47 of the Revised Code.	458

(N) Should any section of this chapter or Chapter 4121. of	459
the Revised Code providing for self-insuring employers'	460
assessments based upon compensation paid be declared	461
unconstitutional by a final decision of any court, then that	462
section of the Revised Code declared unconstitutional shall revert	463
back to the section in existence prior to November 3, 1989,	464
providing for assessments based upon payroll.	465

(O) The administrator may grant a self-insuring employer the	466
privilege to self-insure a construction project entered into by	467
the self-insuring employer that is scheduled for completion within	468
six years after the date the project begins, and the total cost of	469
which is estimated to exceed one hundred million dollars. The	470
administrator may waive such cost and time criteria and grant a	471
self-insuring employer the privilege to self-insure a construction	472
project regardless of the time needed to complete the construction	473
project and provided that the cost of the construction project is	474
estimated to exceed fifty million dollars. A self-insuring	475
employer who desires to self-insure a construction project shall	476
submit to the administrator an application listing the dates the	477
construction project is scheduled to begin and end, the estimated	478
cost of the construction project, the contractors and	479
subcontractors whose employees are to be self-insured by the	480
self-insuring employer, the provisions of a safety program that is	481
specifically designed for the construction project, and a	482
statement as to whether a collective bargaining agreement	483
governing the rights, duties, and obligations of each of the	484
parties to the agreement with respect to the construction project	485
exists between the self-insuring employer and a labor	486
organization.	487

A self-insuring employer may apply to self-insure the	488
employees of either of the following:	489

(1) All contractors and subcontractors who perform labor or	490
work or provide materials for the construction project;	491

(2) All contractors and, at the administrator's discretion,	492
a substantial number of all the subcontractors who perform labor	493
or work or provide materials for the construction project.	494

Upon approval of the application, the administrator shall	495
mail a certificate granting the privilege to self-insure the	496
construction project to the self-insuring employer. The	497
certificate shall contain the name of the self-insuring employer	498
and the name, address, and telephone number of the self-insuring	499
employer's representatives who are responsible for administering	500
workers' compensation claims for the construction project. The	501
self-insuring employer shall post the certificate in a conspicuous	502
place at the site of the construction project.	503

The administrator shall maintain a record of the contractors	504
and subcontractors whose employees are covered under the	505
certificate issued to the self-insured employer. A self-insuring	506
employer immediately shall notify the administrator when any	507
contractor or subcontractor is added or eliminated from inclusion	508
under the certificate.	509

Upon approval of the application, the self-insuring employer	510
is responsible for the administration and payment of all claims	511
under this chapter and Chapter 4121. of the Revised Code for the	512
employees of the contractor and subcontractors covered under the	513
certificate who receive injuries or are killed in the course of	514
and arising out of employment on the construction project, or who	515
contract an occupational disease in the course of employment on	516
the construction project. For purposes of this chapter and	517
Chapter 4121. of the Revised Code, a claim that is administered	518
and paid in accordance with this division is considered a claim	519
against the self-insuring employer listed in the certificate. A	520
contractor or subcontractor included under the certificate shall	521
report to the self-insuring employer listed in the certificate,	522
all claims that arise under this chapter and Chapter 4121. of the	523
Revised Code in connection with the construction project for which	524
the certificate is issued.	525

A self-insuring employer who complies with this division is	526
entitled to the protections provided under this chapter and	527
Chapter 4121. of the Revised Code with respect to the employees of	528
the contractors and subcontractors covered under a certificate	529
issued under this division for death or injuries that arise out	530
of, or death, injuries, or occupational diseases that arise in the	531
course of, those employees' employment on that construction	532
project, as if the employees were employees of the self-insuring	533
employer, provided that the self-insuring employer also complies	534
with this section. No employee of the contractors and	535
subcontractors covered under a certificate issued under this	536
division shall be considered the employee of the self-insuring	537
employer listed in that certificate for any purposes other than	538
this chapter and Chapter 4121. of the Revised Code. Nothing in	539
this division gives a self-insuring employer authority to control	540
the means, manner, or method of employment of the employees of the	541
contractors and subcontractors covered under a certificate issued	542
under this division.	543

The contractors and subcontractors included under a	544
certificate issued under this division are entitled to the	545
protections provided under this chapter and Chapter 4121. of the	546
Revised Code with respect to the contractor's or subcontractor's	547
employees who are employed on the construction project which is	548
the subject of the certificate, for death or injuries that arise	549
out of, or death, injuries, or occupational diseases that arise in	550
the course of, those employees' employment on that construction	551
project.	552

The contractors and subcontractors included under a	553
certificate issued under this division shall identify in their	554
payroll records the employees who are considered the employees of	555
the self-insuring employer listed in that certificate for purposes	556
of this chapter and Chapter 4121. of the Revised Code, and the	557
amount that those employees earned for employment on the	558
construction project that is the subject of that certificate.	559
Notwithstanding any provision to the contrary under this chapter	560
and Chapter 4121. of the Revised Code, the administrator shall	561
exclude the payroll that is reported for employees who are	562
considered the employees of the self-insuring employer listed in	563
that certificate, and that the employees earned for employment on	564
the construction project that is the subject of that certificate,	565
when determining those contractors' or subcontractors' premiums or	566
assessments required under this chapter and Chapter 4121. of the	567
Revised Code. A self-insuring employer issued a certificate under	568
this division shall include in the amount of paid compensation it	569
reports pursuant to division (L) of this section, the amount of	570
paid compensation the self-insuring employer paid pursuant to this	571
division for the previous calendar year.	572

Nothing in this division shall be construed as altering the	573
rights of employees under this chapter and Chapter 4121. of the	574
Revised Code as those rights existed prior to September 17, 1996.	575
Nothing in this division shall be construed as altering the rights	576
devolved under sections 2305.31 and 4123.82 of the Revised Code as	577
those rights existed prior to September 17, 1996.	578

As used in this division, "privilege to self-insure a	579
construction project" means privilege to pay individually	580
compensation, and to furnish medical, surgical, nursing, and	581
hospital services and attention and funeral expenses directly to	582
injured employees or the dependents of killed employees.	583

(P) A self-insuring employer whose application is granted	584
under division (O) of this section shall designate a safety	585
professional to be responsible for the administration and	586
enforcement of the safety program that is specifically designed	587
for the construction project that is the subject of the	588
application.	589

A self-insuring employer whose application is granted under	590
division (O) of this section shall employ an ombudsperson for the	591
construction project that is the subject of the application. The	592
ombudsperson shall have experience in workers' compensation or the	593
construction industry, or both. The ombudsperson shall perform	594
all of the following duties:	595

(1) Communicate with and provide information to employees	596
who are injured in the course of, or whose injury arises out of	597
employment on the construction project, or who contract an	598
occupational disease in the course of employment on the	599
construction project;	600

(2) Investigate the status of a claim upon the request of an	601
employee to do so;	602

(3) Provide information to claimants, third party	603
administrators, employers, and other persons to assist those	604
persons in protecting their rights under this chapter and Chapter	605
4121. of the Revised Code.	606

A self-insuring employer whose application is granted under	607
division (O) of this section shall post the name of the safety	608
professional and the ombudsperson and instructions for contacting	609
the safety professional and the ombudsperson in a conspicuous	610
place at the site of the construction project.	611

(Q) The administrator may consider all of the following when	612
deciding whether to grant a self-insuring employer the privilege	613
to self-insure a construction project as provided under division	614
(O) of this section:	615

(1) Whether the self-insuring employer has an organizational	616
plan for the administration of the workers' compensation law;	617

(2) Whether the safety program that is specifically designed	618
for the construction project provides for the safety of employees	619
employed on the construction project, is applicable to all	620
contractors and subcontractors who perform labor or work or	621
provide materials for the construction project, and has a	622
component, a safety training program that complies with standards	623
adopted pursuant to the "Occupational Safety and Health Act of	624
1970," 84 Stat. 1590, 29 U.S.C.A. 651, and provides for continuing	625
management and employee involvement;	626

(3) Whether granting the privilege to self-insure the	627
construction project will reduce the costs of the construction	628
project;	629

(4) Whether the self-insuring employer has employed an	630
ombudsperson as required under division (P) of this section;	631

(5) Whether the self-insuring employer has sufficient surety	632
to secure the payment of claims for which the self-insuring	633
employer would be responsible pursuant to the granting of the	634
privilege to self-insure a construction project under division (O)	635
of this section.	636

(R) As used in this section:

637

(1) "Unvoted debt capacity" means the amount of money that a	638
public employer may borrow without voter approval of a tax levy;	639

(2) "State institution of higher education" means the state	640
universities listed in section 3345.011 of the Revised Code,	641
community colleges created pursuant to Chapter 3354. of the	642
Revised Code, university branches created pursuant to Chapter	643
3355. of the Revised Code, technical colleges created pursuant to	644
Chapter 3357. of the Revised Code, and state community colleges	645
created pursuant to Chapter 3358. of the Revised Code.	646

Sec. 4123.66.  (A) In addition to the compensation provided	647
for in this chapter, the administrator of workers' compensation	648
shall disburse and pay from the state insurance fund the amounts	649
for medical, nurse, and hospital services and medicine as hethe	650
administrator deems proper and, in case death ensues from the	651
injury or occupational disease, hethe administrator shall	652
disburse and pay from the fund reasonable funeral expenses in an	653
amount not to exceed thirty-twofifty-five hundred dollars. The	654
bureau of workers' compensation shall reimburse anyone, whether	655
dependent, volunteer, or otherwise, who pays the funeral expenses	656
of any employee whose death ensues from any injury or occupational	657
disease as provided in this section. The administrator may adopt	658
rules, with the advice and consent of the workers' compensation	659
oversight commission, with respect to furnishing medical, nurse,	660
and hospital service and medicine to injured or disabled employees	661
entitled thereto, and for the payment therefor. In case an injury	662
or industrial accident that injures an employee also causes damage	663
to the employee's eyeglasses, artificial teeth or other denture,	664
or hearing aid, or in the event an injury or occupational disease	665
makes it necessary or advisable to replace, repair, or adjust the	666
same, the bureau shall disburse and pay a reasonable amount to	667
repair or replace the same.	668

(B)(1) If an employer or a welfare plan has provided to or	669
on behalf of an employee any benefits or compensation for an	670
injury or occupational disease and that injury or occupational	671
disease is determined compensable under this chapter, the employer	672
or a welfare plan may request that the administrator reimburse the	673
employer or welfare plan for the amount the employer or welfare	674
plan paid to or on behalf of the employee in compensation or	675
benefits. The administrator shall reimburse the employer or	676
welfare plan for the compensation and benefits paid if, at the	677
time the employer or welfare plan provides the benefits or	678
compensation to or on behalf of employee, the injury or	679
occupational disease had not been determined to be compensable	680
under this chapter and if the employee was not receiving	681
compensation or benefits under this chapter for that injury or	682
occupational disease. The administrator shall reimburse the	683
employer or welfare plan in the amount that the administrator	684
would have paid to or on behalf of the employee under this chapter	685
if the injury or occupational disease originally would have been	686
determined compensable under this chapter. If the employer is a	687
merit-rated employer, the administrator shall adjust the amount of	688
premium next due from the employer according to the amount the	689
administrator pays the employer. The administrator shall adopt	690
rules, in accordance with Chapter 119. of the Revised Code, to	691
implement this division.	692

(2) As used in this division, "welfare plan" has the same	693
meaning as in division (1) of 29 U.S.C.A. 1002.	694

Sec. 4123.93.  As used in sections 4123.93 and 4123.931 of	695
the Revised Code:	696

(A) "Claimant" means a person who is eligible to receive	697
compensation or, medical benefits, or death benefits under this	698
chapter or Chapter 4121., 4127., or 4131. of the Revised Code,	699
including any dependent or person whose eligibility is the result	700
of an injury to or occupational disease of another person.	701

(B) "Statutory subrogee" means the administrator of the	702
bureau of workers' compensation, a self-insuring employer, or an	703
employer that contracts for the direct payment of medical services	704
pursuant to division (L) of section 4121.44 of the Revised Code.	705

(C) "Subrogated amounts" include, but are not limited to, the	706
following:	707

(1) Amounts recoverable from any third party,	708
notwithstanding any limitations by the third party concerning its	709
responsibility to make payments in cases involving workers'	710
compensation under Chapter 4121., 4123., 4127., or 4131. of the	711
Revised Code;	712

(2) Amounts recoverable from a claimant's insurer in	713
connection with underinsured or uninsured motorist coverage,	714
notwithstanding any limitation contained in Chapter 3937. of the	715
Revised Code;	716

(3) Amounts that a claimant would be entitled to recover	717
from a political subdivision, notwithstanding any limitations	718
contained in Chapter 2744. of the Revised Code.	719

(D) "Third party" means an individual, private insurer,	720
public or private entity, or public or private program that is or	721
may be liable to make payments to a person without regard to any	722
statutory duty contained in this chapter or Chapter 4121., 4127.,	723
or 4131. of the Revised Code.	724

(D) "Subrogation interest" includes past, present, and	725
estimated future payments of compensation, medical benefits,	726
rehabilitation costs, or death benefits, and any other costs or	727
expenses paid to or on behalf of the claimant by the statutory	728
subrogee pursuant to this chapter or Chapter 4121., 4127., or	729
4131. of the Revised Code.	730

(E) "Net amount recovered" means the amount of any award,	731
settlement, compromise, or recovery by a claimant against a third	732
party, minus the attorney's fees, costs, or other expenses	733
incurred by the claimant in securing the award, settlement,	734
compromise, or recovery. "Net amount recovered" does not include	735
any punitive damages that may be awarded by a judge or jury.	736

(F) "Uncompensated damages" means the claimant's	737
demonstrated or proven damages minus the statutory subrogee's	738
subrogation interest.	739

Sec. 4123.931.  (A) The payment of compensation or benefits	740
pursuant to this chapter or Chapter 4121., 4127., or 4131., of the	741
Revised Code creates a right of subrogationrecovery in favor of a	742
statutory subrogee against a third party. A statutory subrogee's	743
subrogation interest includes past payments of compensation and	744
medical benefits and estimated future values of compensation and	745
medical benefits arising out of an injury to or disability or	746
disease of a claimant, and the statutory subrogee is subrogated to	747
the rights of a claimant against that third party. The net amount	748
recovered is subject to a statutory subrogee's right of recovery.	749

(B) If a claimant, statutory subrogee, and third party settle	750
or attempt to settle a claimant's claim against a third party, the	751
claimant shall receive an amount equal to the uncompensated	752
damages divided by the sum of the subrogation interest plus the	753
uncompensated damages, multiplied by the net amount recovered, and	754
the statutory subrogee shall receive an amount equal to the	755
subrogation interest divided by the sum of the subrogation	756
interest plus the uncompensated damages, multiplied by the net	757
amount recovered, except that the net amount recovered may instead	758
be divided and paid on a more fair and reasonable basis that is	759
agreed to by the claimant and statutory subrogee. If while	760
attempting to settle, the claimant and statutory subrogee cannot	761
agree to the allocation of the net amount recovered, the claimant	762
and statutory subrogee may file a request with the administrator	763
of workers' compensation for a conference to be conducted by a	764
designee appointed by the administrator, or the claimant and	765
statutory subrogee may agree to utilize any other binding or	766
non-binding alternative dispute resolution process.	767

The claimant and statutory subrogee shall pay equal shares	768
of the fees and expenses of utilizing an alternative dispute	769
resolution process, unless they agree to pay those fees and	770
expenses in another manner. The administrator shall not assess	771
any fees to a claimant or statutory subrogee for a conference	772
conducted by the administrator's designee.	773

(C) If a claimant and statutory subrogee request that a	774
conference be conducted by the administrator's designee pursuant	775
to division (B) of this section, both of the following apply:	776

(1) The administrator's designee shall schedule a conference	777
on or before sixty days after the date that the claimant and	778
statutory subrogee filed a request for the conference.	779

(2) The determination made by the administrator's designee	780
is not subject to Chapter 119. of the Revised Code.	781

(D) When a claimant's action against a third party proceeds	782
to trial and damages are awarded, both of the following apply:	783

(1) The claimant shall receive an amount equal to the	784
uncompensated damages divided by the sum of the subrogation	785
interest plus the uncompensated damages, multiplied by the net	786
amount recovered, and the statutory subrogee shall receive an	787
amount equal to the subrogation interest divided by the sum of the	788
subrogation interest plus the uncompensated damages, multiplied by	789
the net amount recovered.	790

(2) The court in a nonjury action shall make findings of	791
fact, and the jury in a jury action shall return a general verdict	792
accompanied by answers to interrogatories that specify the	793
following:	794

(a) The total amount of the compensatory damages;

795

(b) The portion of the compensatory damages specified	796
pursuant to division (D)(2)(a) of this section that represents	797
economic loss;	798

(c) The portion of the compensatory damages specified	799
pursuant to division (D)(2)(a) of this section that represents	800
noneconomic loss.	801

(E)(1) After a claimant and statutory subrogee know the net	802
amount recovered, and after the means for dividing it has been	803
determined under division (B) or (D) of this section, a claimant	804
may establish an interest-bearing trust account for the full	805
amount of the subrogation interest that represents estimated	806
future payments of compensation, medical benefits, rehabilitation	807
costs, or death benefits, reduced to present value, from which the	808
claimant shall make reimbursement payments to the statutory	809
subrogee for the future payments of compensation, medical	810
benefits, rehabilitation costs, or death benefits. If the	811
workers' compensation claim associated with the subrogation	812
interest is settled, or if the claimant dies, or if any other	813
circumstance occurs that would preclude any future payments of	814
compensation, medical benefits, rehabilitation costs, and death	815
benefits by the statutory subrogee, any amount remaining in the	816
trust account after final reimbursement is paid to the statutory	817
subrogee for all payments made by the statutory subrogee before	818
the ending of future payments shall be paid to the claimant or the	819
claimant's estate.	820

(2) A claimant may use interest that accrues on the trust	821
account to pay the expenses of establishing and maintaining the	822
trust account, and all remaining interest shall be credited to the	823
trust account.	824

(3) If a claimant establishes a trust account, the	825
statutory subrogee shall provide payment notices to the claimant	826
on or before the thirtieth day of June and the thirty-first day of	827
December every year listing the total amount that the statutory	828
subrogee has paid for compensation, medical benefits,	829
rehabilitation costs, or death benefits during the half of the	830
year preceding the notice. The claimant shall make reimbursement	831
payments to the statutory subrogee from the trust account on or	832
before the thirty-first day of July every year for a notice	833
provided by the thirtieth day of June, and on or before the	834
thirty-first day of January every year for a notice provided by	835
the thirty-first day of December. The claimant's reimbursement	836
payment shall be in an amount that equals the total amount listed	837
on the notice the claimant receives from the statutory subrogee.	838

(F) If a claimant does not establish a trust account as	839
described in division (E)(1) of this section, the claimant shall	840
pay to the statutory subrogee, on or before thirty days after	841
receipt of funds from the third party, the full amount of the	842
subrogation interest that represents estimated future payments of	843
compensation, medical benefits, rehabilitation costs, or death	844
benefits.	845

(G) A claimant shall notify a statutory subrogee and the	846
attorney general of the identity of all third parties against whom	847
the claimant has or may have a right of recovery, except that when	848
the statutory subrogee is a self-insuring employer, the claimant	849
need not notify the attorney general. No settlement, compromise,	850
judgment, award, or other recovery in any action or claim by a	851
claimant shall be final unless the claimant provides the statutory	852
subrogee and, when required, the attorney general, with prior	853
notice and a reasonable opportunity to assert its subrogation	854
rights. If a statutory subrogee isand, when required, the	855
attorney general are not given that notice, or if a settlement or	856
compromise excludes any amount paid by the statutory subrogee, the	857
third party and the claimant shall be jointly and severally liable	858
to pay the statutory subrogee the full amount of the subrogation	859
interest.	860

(C)(H) The right of subrogation under this chapter is	861
automatic, regardless of whether a statutory subrogee is joined as	862
a party in an action by a claimant against a third party. A	863
statutory subrogee may assert its subrogation rights through	864
correspondence with the claimant and the third party or their	865
legal representatives. A statutory subrogee may institute and	866
pursue legal proceedings against a third party either by itself or	867
in conjunction with a claimant. If a statutory subrogee institutes	868
legal proceedings against a third party, the statutory subrogee	869
shall provide notice of that fact to the claimant. If the	870
statutory subrogee joins the claimant as a necessary party, or if	871
the claimant elects to participate in the proceedings as a party,	872
the claimant may present the claimant's case first if the matter	873
proceeds to trial. If a claimant disputes the validity or amount	874
of an asserted subrogation interest, the claimant shall join the	875
statutory subrogee as a necessary party to the action against the	876
third party.	877

(D) The entire amount of any settlement or compromise of an	878
action or claim is subject to the subrogation right of a statutory	879
subrogee, regardless of the manner in which the settlement or	880
compromise is characterized. Any settlement or compromise that	881
excludes the amount of compensation or medical benefits shall not	882
preclude a statutory subrogee from enforcing its rights under this	883
section. The entire amount of any award or judgment is presumed	884
to represent compensation and medical benefits and future	885
estimated values of compensation and medical benefits that are	886
subject to a statutory subrogee's subrogation rights unless the	887
claimant obtains a special verdict or jury interrogatories	888
indicating that the award or judgment represents different types	889
of damages.	890

(E) Subrogation does not apply to the portion of any	891
judgment, award, settlement, or compromise of a claim to the	892
extent of a claimant's attorney's fees, costs, or other expenses	893
incurred by a claimant in securing the judgment, award,	894
settlement, or compromise, or the extent of medical, surgical, and	895
hospital expenses paid by a claimant from the claimant's own	896
resources for which reimbursement is not sought. No additional	897
attorney's fees, costs, or other expenses in securing any recovery	898
may be assessed against any subrogated claims of a statutory	899
subrogee(I) The statutory subrogation right of recovery applies	900
to, but is not limited to, all of the following:	901

(1) Amounts recoverable from a claimant's insurer in	902
connection with underinsured or uninsured motorist coverage,	903
notwithstanding any limitation contained in Chapter 3937. of the	904
Revised Code;	905

(2) Amounts that a claimant would be entitled to recover	906
from a political subdivision, notwithstanding any limitations	907
contained in Chapter 2744. of the Revised Code;	908

(3) Amounts recoverable from an intentional tort action.

909

(J) If a claimant's claim against a third party is for	910
wrongful death or the claim involves any minor beneficiaries,	911
amounts allocated under this section are subject to the approval	912
of probate court.	913

(K) The administrator shall deposit any money collected under	914
this section into the public fund or the private fund of the state	915
insurance fund, as appropriate. If a self-insuring employer	916
collects money under this section of the Revised Code, the	917
self-insuring employer shall deduct the amount collected, in the	918
year collected, from the amount of paid compensation the	919
self-insured employer is required to report under section 4123.35	920
of the Revised Code.	921

Section 2.  That existing sections 4123.35, 4123.66,	922
4123.93, and 4123.931 of the Revised Code are hereby repealed.	923