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| To amend section 4123.29 of the Revised Code to | 1 |
| require the Administrator of Workers' | 2 |
| Compensation to make specified changes concerning | 3 |
| workers' compensation premium rates. | 4 |
| Section 1. That section 4123.29 of the Revised Code be | 5 |
| amended to read as follows: | 6 |
| Sec. 4123.29. (A) The administrator of workers' | 7 |
| compensation, subject to the approval of the bureau of workers' | 8 |
| compensation board of directors, shall do all of the following: | 9 |
| (1) Classify occupations or industries with respect to their | 10 |
| degree of hazard and determine the risks of the different classes | 11 |
| according to the categories the national council on compensation | 12 |
| insurance establishes that are applicable to employers in this | 13 |
| state; | 14 |
| (2)(a) Fix the rates of premium of the risks of the classes | 15 |
| based upon the total payroll in each of the classes of occupation | 16 |
| or industry sufficiently large to provide a fund for the | 17 |
| compensation provided for in this chapter and to maintain a state | 18 |
| insurance fund from year to year. The administrator shall set the | 19 |
| rates at a level that assures the solvency of the fund. Where the | 20 |
| payroll cannot be obtained or, in the opinion of the | 21 |
| administrator, is not an adequate measure for determining the | 22 |
| premium to be paid for the degree of hazard, the administrator | 23 |
| may determine the rates of premium upon such other basis, | 24 |
| consistent with insurance principles, as is equitable in view of | 25 |
| the degree of hazard, and whenever in this chapter reference is | 26 |
| made to payroll or expenditure of wages with reference to fixing | 27 |
| premiums, the reference shall be construed to have been made also | 28 |
| to such other basis for fixing the rates of premium as the | 29 |
| administrator may determine under this section. | 30 |
| (b) If an employer elects to obtain other-states' coverage | 31 |
| pursuant to section 4123.292 of the Revised Code through either | 32 |
| the administrator, if the administrator elects to offer such | 33 |
| coverage, or an other-states' insurer, calculate the employer's | 34 |
| premium for the state insurance fund in the same manner as | 35 |
| otherwise required under division (A) of this section and section | 36 |
| 4123.34 of the Revised Code, except that when the administrator | 37 |
| determines the expenditure of wages, payroll, or both upon which | 38 |
| to base the employer's premium, the administrator shall use only | 39 |
| the expenditure of wages, payroll, or both attributable to the | 40 |
| labor performed and services provided by that employer's employees | 41 |
| when those employees performed labor and provided services in this | 42 |
| state only and to which the other-states' coverage does not | 43 |
| apply. | 44 |
| (c) The administrator in setting or revising rates shall | 45 |
| furnish to employers an adequate explanation of the basis for the | 46 |
| rates set. | 47 |
| (3) Develop and make available to employers who are paying | 48 |
| premiums to the state insurance fund alternative premium plans. | 49 |
| Alternative premium plans shall include retrospective rating | 50 |
| plans. The administrator may make available plans under which an | 51 |
| advanced deposit may be applied against a specified deductible | 52 |
| amount per claim. | 53 |
| (4)(a) Offer to insure the obligations of employers under | 54 |
| this chapter under a plan that groups, for rating purposes, | 55 |
| employers, and pools the risk of the employers within the group | 56 |
| provided that the employers meet all of the following conditions: | 57 |
| (i) All of the employers within the group are members of an | 58 |
| organization that has been in existence for at least two years | 59 |
| prior to the date of application for group coverage; | 60 |
| (ii) The organization was formed for purposes other than that | 61 |
| of obtaining group workers' compensation under this division; | 62 |
| (iii) The employers' business in the organization is | 63 |
| substantially similar such that the risks which are grouped are | 64 |
| substantially homogeneous; | 65 |
| (iv) The group of employers consists of at least one hundred | 66 |
| members or the aggregate workers' compensation premiums of the | 67 |
| members, as determined by the administrator, are expected to | 68 |
| exceed one hundred fifty thousand dollars during the coverage | 69 |
| period; | 70 |
| (v) The formation and operation of the group program in the | 71 |
| organization will substantially improve accident prevention and | 72 |
| claims handling for the employers in the group; | 73 |
| (vi) Each employer seeking to enroll in a group for workers' | 74 |
| compensation coverage has an industrial insurance account in good | 75 |
| standing with the bureau of workers' compensation such that at the | 76 |
| time the agreement is processed no outstanding premiums, | 77 |
| penalties, or assessments are due from any of the employers. | 78 |
| (b) If an organization sponsors more than one employer group | 79 |
| to participate in group plans established under this section, that | 80 |
| organization may submit a single application that supplies all of | 81 |
| the information necessary for each group of employers that the | 82 |
| organization wishes to sponsor. | 83 |
| (c) In providing employer group plans under division (A)(4) | 84 |
| of this section, the administrator shall consider an employer | 85 |
| group as a single employing entity for purposes of group rating. | 86 |
| No employer may be a member of more than one group for the | 87 |
| purpose of obtaining workers' compensation coverage under this | 88 |
| division. | 89 |
| (d) At the time the administrator revises premium rates | 90 |
| pursuant to this section and section 4123.34 of the Revised Code, | 91 |
| if the premium rate of an employer who participates in a group | 92 |
| plan established under this section changes from the rate | 93 |
| established for the previous year, the administrator, in addition | 94 |
| to sending the invoice with the rate revision to that employer, | 95 |
| shall send a copy of that invoice to the third-party administrator | 96 |
| that administers the group plan for that employer's group. | 97 |
| (e) In providing employer group plans under division (A)(4) | 98 |
| of this section, the administrator shall establish a program | 99 |
| designed to mitigate the impact of a significant claim that would | 100 |
| come into the experience of a private, state fund group-rated | 101 |
| employer for the first time and be a contributing factor in that | 102 |
| employer being excluded from a group-rated plan. The administrator | 103 |
| shall establish eligibility criteria and requirements that such | 104 |
| employers must satisfy in order to participate in this program. | 105 |
| For purposes of this program, the administrator shall establish a | 106 |
| discount on premium rates applicable to employers who qualify for | 107 |
| the program. | 108 |
| (f) In no event shall division (A)(4) of this section be | 109 |
| construed as granting to an employer status as a self-insuring | 110 |
| employer. | 111 |
| (g) The administrator shall develop classifications of | 112 |
| occupations or industries that are sufficiently distinct so as not | 113 |
| to group employers in classifications that unfairly represent the | 114 |
| risks of employment with the employer. | 115 |
| (5) Generally promote employer participation in the state | 116 |
| insurance fund through the regular dissemination of information to | 117 |
| all classes of employers describing the advantages and benefits of | 118 |
| opting to make premium payments to the fund. To that end, the | 119 |
| administrator shall regularly make employers aware of the various | 120 |
| workers' compensation premium packages developed and offered | 121 |
| pursuant to this section. | 122 |
| (6) Make available to every employer who is paying premiums | 123 |
| to the state insurance fund a program whereby the employer or the | 124 |
| employer's agent pays to the claimant or on behalf of the claimant | 125 |
| the first fifteen thousand dollars of a compensable workers' | 126 |
| compensation medical-only claim filed by that claimant that is | 127 |
| related to the same injury or occupational disease. No formal | 128 |
| application is required; however, an employer must elect to | 129 |
| participate by telephoning the bureau after July 1, 1995. Once an | 130 |
| employer has elected to participate in the program, the employer | 131 |
| will be responsible for all bills in all medical-only claims with | 132 |
| a date of injury the same or later than the election date, unless | 133 |
| the employer notifies the bureau within fourteen days of receipt | 134 |
| of the notification of a claim being filed that it does not wish | 135 |
| to pay the bills in that claim, or the employer notifies the | 136 |
| bureau that the fifteen thousand dollar maximum has been paid, or | 137 |
| the employer notifies the bureau of the last day of service on | 138 |
| which it will be responsible for the bills in a particular | 139 |
| medical-only claim. If an employer elects to enter the program, | 140 |
| the administrator shall not reimburse the employer for such | 141 |
| amounts paid and shall not charge the first fifteen thousand | 142 |
| dollars of any medical-only claim paid by an employer to the | 143 |
| employer's experience or otherwise use it in merit rating or | 144 |
| determining the risks of any employer for the purpose of payment | 145 |
| of premiums under this chapter. A certified health care provider | 146 |
| shall extend to an employer who participates in this program the | 147 |
| same rates for services rendered to an employee of that employer | 148 |
| as the provider bills the administrator for the same type of | 149 |
| medical claim processed by the bureau and shall not charge, | 150 |
| assess, or otherwise attempt to collect from an employee any | 151 |
| amount for covered services or supplies that is in excess of that | 152 |
| rate. If an employer elects to enter the program and the employer | 153 |
| fails to pay a bill for a medical-only claim included in the | 154 |
| program, the employer shall be liable for that bill and the | 155 |
| employee for whom the employer failed to pay the bill shall not | 156 |
| be liable for that bill. The administrator shall adopt rules to | 157 |
| implement and administer division (A)(6) of this section. Upon | 158 |
| written request from the bureau, the employer shall provide | 159 |
| documentation to the bureau of all medical-only bills that they | 160 |
| are paying directly. Such requests from the bureau may not be | 161 |
| made more frequently than on a semiannual basis. Failure to | 162 |
| provide such documentation to the bureau within thirty days of | 163 |
| receipt of the request may result in the employer's forfeiture of | 164 |
| participation in the program for such injury. The provisions of | 165 |
| this section shall not apply to claims in which an employer with | 166 |
| knowledge of a claimed compensable injury or occupational disease, | 167 |
| has paid wages in lieu of compensation or total disability. | 168 |
| (B) The administrator, with the advice and consent of the | 169 |
| board, by rule, may do both of the following: | 170 |
| (1) Grant an employer who makes the employer's semiannual | 171 |
| premium payment at least one month prior to the last day on which | 172 |
| the payment may be made without penalty, a discount as the | 173 |
| administrator fixes from time to time; | 174 |
| (2) Levy a minimum annual administrative charge upon risks | 175 |
| where semiannual premium reports develop a charge less than the | 176 |
| administrator considers adequate to offset administrative costs of | 177 |
| processing. | 178 |
| (C) The administrator shall adopt a rule that sets the | 179 |
| discount for programs or alternative premium plans not later than | 180 |
| the first day of September prior to the policy year in which the | 181 |
| discount for programs or alternative premium plans is to be in | 182 |
| effect. | 183 |
| Section 2. That existing section 4123.29 of the Revised | 184 |
| Code is hereby repealed. | 185 |
| Section 3. (A) As used in this section, "breakeven factor" | 186 |
| means an adjustment factor applied to the group rated experience | 187 |
| modification used to calculate the workers' compensation premium | 188 |
| rate of an employer that participates in the group rating program | 189 |
| created under division (A)(4) of section 4123.29 of the Revised | 190 |
| Code. | 191 |
| (B) Beginning on the effective date of this section, the | 192 |
| Administrator of Workers' Compensation shall suspend the use of a | 193 |
| breakeven factor for a period of two years. During that two-year | 194 |
| period, the Administrator shall not lower the maximum premium | 195 |
| discount for employers who participate in the group rating | 196 |
| program created under division (A)(4) of section 4123.29 of the | 197 |
| Revised Code below sixty-five per cent, and neither the | 198 |
| Administrator nor the Bureau of Workers' Compensation Board of | 199 |
| Directors shall make or approve any changes to the group rating | 200 |
| program. | 201 |
| (C) During the first year of the two-year period described in | 202 |
| division (B) of this section, the Administrator shall study the | 203 |
| premium rating system. The study shall be a collaborative effort | 204 |
| with stakeholders in the workers' compensation system. The | 205 |
| Administrator shall submit a report summarizing the results of the | 206 |
| study by the end of that first year to the Governor, the President | 207 |
| and Minority Leader of the Senate, the Speaker and Minority | 208 |
| Leader of the House of Representatives, and the chairpersons of | 209 |
| the standing committees of the Senate and the House of | 210 |
| Representatives to which legislation concerning workers' | 211 |
| compensation customarily is referred. The Administrator shall | 212 |
| include in that report a determination of the direction of future | 213 |
| premium rates and supporting evidence of that determination and, | 214 |
| if the Administrator determines that changes to Chapter 4121., | 215 |
| 4123., 4127., or 4131. of the Revised Code are necessary to | 216 |
| implement the report, a list of those recommended changes. | 217 |
| (D) During the second year of the two-year period described | 218 |
| in division (B) of this section, the Administrator, subject to the | 219 |
| approval of the Bureau of Workers' Compensation Board of | 220 |
| Directors, may adopt rules in accordance with section 4123.29 of | 221 |
| the Revised Code, as amended by this act, and section 4123.34 of | 222 |
| the Revised Code to make changes to the rating system to | 223 |
| implement the results of the study required under division (C) of | 224 |
| this section. | 225 |