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As Reported by the Senate Insurance, Commerce
and Labor Committee
123rd General Assembly
Regular Session
1999-2000 | Sub. S. B. No. 266 |
SENATOR HORN
A BILL
To amend sections 4123.01 and 4123.35 and to enact section 4123.353 of the
Revised Code
to permit public employers, including state institutions of higher education
but not including other state entities, to become self-insuring
employers for purposes of
the Workers' Compensation Law.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 4123.01 and 4123.35 be amended and section 4123.353
of the
Revised Code be enacted to read as follows:
Sec. 4123.01. As used in this chapter:
(A)(1) "Employee" means:
(a) Every person in the service of the state, or of any
county, municipal corporation, township, or school district
therein, including regular members of lawfully constituted police
and fire departments of municipal corporations and townships,
whether paid or volunteer, and wherever serving within the state
or on temporary assignment outside thereof, and executive
officers of boards of education, under any appointment or
contract of hire, express or implied, oral or written, including
any elected official of the state, or of any county, municipal
corporation, or township, or members of boards of education;.
As used in division (A)(1)(a) of this section, the
term "regular members of lawfully constituted police and fire departments"
includes the following persons when the person responds to an inherently
dangerous situation that calls for an immediate response on the part of the
person, regardless of whether the person is within the limits of the
jurisdiction of the person's regular
employment or voluntary service when responding, on the condition that the
person responds to the situation as the person otherwise would if the person
were on duty in the person's jurisdiction.:
(i) Off-duty peace officers. As used in division
(A)(1)(a)(i) of this section, "peace officer"
means a member of the organized police
department of any municipal corporation, including a member of the organized
police department of a municipal corporation in an adjoining state serving in
Ohio under a contract pursuant to section
737.04 of the Revised
Code, member of a police force employed by a
metropolitan housing authority under division
(D) of section 3735.31 of the
Revised Code,
member of a police force employed by a regional transit authority under
division (Y) of section 306.05 of the
Revised Code,
state university law enforcement officer appointed under section 3345.04 of the
Revised Code,
Ohio veterans' home police officer appointed
under section 5907.02 of the Revised
Code, police constable of any township,
police officer of a township or joint township police district, state highway
patrol trooper, and member of a qualified nonprofit corporation police
department established pursuant to section 1702.80 of the Revised Code.
As used in division (A)(1)(a) of this section
with respect to off-duty peace officers, "jurisdiction" means the
limits of the municipal corporation, township, metropolitan housing authority
housing project, regional transit authority facilities or areas of a municipal
corporation that have been agreed to by a regional transit authority and a
municipal corporation located within its territorial jurisdiction, college,
university, or Ohio veterans' home in which
the peace officer is appointed, employed, or elected.
(ii) Off-duty firefighters, whether paid or volunteer, of a
lawfully constituted fire department. As used in division
(A)(1)(a) of this section
with respect to off-duty firefighters, "jurisdiction" means the limits of the
political subdivision, joint ambulance district, fire district, or joint fire
district in which the firefighter is appointed or employed.
(iii) Off-duty first responders, emergency medical
technicians-basic, emergency medical technicians-intermediate, or emergency
medical technicians-paramedic, whether paid or volunteer, of an ambulance
service organization or emergency medical service organization pursuant to
Chapter 4765. of the
Revised Code. As used in division
(A)(1)(a) of this section
with respect to off-duty first responders and emergency medical technicians,
"jurisdiction" means the limits of the political subdivision or joint
ambulance
district in which the first responder or emergency medical technician is
employed or volunteers as a first responder or emergency medical
technician.
(b) Every person in the service of any person, firm, or
private corporation, including any public service corporation,
that (i) employs one or more persons regularly in the same
business or in or about the same establishment under any contract
of hire, express or implied, oral or written, including aliens
and minors, household workers who earn one hundred sixty dollars
or more in cash in any calendar quarter from a single household
and casual workers who earn one hundred sixty dollars or more in
cash in any calendar quarter from a single employer, or (ii) is
bound by any such contract of hire or by any other written
contract, to pay into the state insurance fund the premiums
provided by this chapter.
(c) Every person who performs labor or provides
services pursuant to a construction contract, as defined in
section 4123.79 of the Revised Code, if at least ten of the following criteria apply:
(i) The person is required to comply with
instructions from the other contracting party regarding the
manner or method of performing services;
(ii) The person is required by the other
contracting party to have particular training;
(iii) The person's services are
integrated into the regular functioning of the other contracting
party;
(iv) The person is required to perform the work personally;
(v) The person is hired, supervised, or paid by the other contracting party;
(vi) A continuing relationship exists
between the person and the other contracting party that
contemplates continuing or recurring work even if the work is
not full time;
(vii) The person's hours of work are
established by the other contracting party;
(viii) The person is required to devote full time
to the business of the other contracting party;
(ix) The person is required to perform the work on
the premises of the other contracting party;
(x) The person is required to follow
the order of work set by the other contracting party;
(xi) The person is required to make
oral or written reports of progress to the other contracting
party;
(xii) The person is paid for services
on a regular basis such as hourly, weekly, or monthly;
(xiii) The person's expenses are paid for by the other contracting party;
(xiv) The person's tools and
materials are furnished by the other contracting party;
(xv) The person is provided with the facilities used to perform services;
(xvi) The person does not realize a profit or
suffer a loss as a result of the services provided;
(xvii) The person is not performing
services for a number of employers at the same time;
(xviii) The person does not make the same services available to
the general public;
(xix) The other contracting party has
a right to discharge the person;
(xx) The person has the right to end
the relationship with the other contracting party without
incurring liability pursuant to an employment contract or
agreement.
Every person in the service of any independent contractor
or subcontractor who has failed to pay into the state insurance
fund the amount of premium determined and fixed by the
administrator of workers' compensation for the person's employment or
occupation or if a self-insuring employer has failed to pay
compensation and benefits directly to the employer's injured and to
the dependents of the employer's killed employees as required by
section 4123.35
of the Revised Code, shall be considered as the employee of the
person who has entered into a contract, whether written or
verbal, with such independent contractor unless such employees or
their legal representatives or beneficiaries elect, after injury
or death, to regard such independent contractor as the employer.
(2) "Employee" does not mean:
(a) A duly ordained, commissioned, or licensed minister or
assistant or associate minister of a church in the exercise of
ministry; or
(b) Any officer of a family farm corporation.
Any employer may elect to include as an "employee" within
this chapter, any person excluded from the definition of
"employee" pursuant to division (A)(2) of this section. If an
employer is a partnership, sole proprietorship, or family farm
corporation, such employer may elect to include as an "employee"
within this chapter, any member of such partnership, the owner of
the sole proprietorship, or the officers of the family farm
corporation. In the event of an election, the employer shall
serve upon the bureau of workers' compensation written notice
naming the persons to be covered, include such employee's
remuneration for premium purposes in all future payroll reports,
and no person excluded from the definition of "employee" pursuant
to division (A)(2) of this section, proprietor, or partner shall
be deemed an employee within this division until the employer has
served such notice.
For informational purposes only, the bureau shall prescribe
such language as it considers appropriate, on such of its forms
as it considers appropriate, to advise employers of their right
to elect to include as an "employee" within this chapter a sole
proprietor, any member of a partnership, the officers of a family
farm corporation, or a person excluded from the definition of
"employee" under division (A)(2)(a) of this section, that they
should check any health and disability insurance policy, or other
form of health and disability plan or contract, presently
covering them, or the purchase of which they may be considering,
to determine whether such policy, plan, or contract excludes
benefits for illness or injury that they might have elected to
have covered by workers' compensation.
(B) "Employer" means:
(1) The state, including state hospitals, each county,
municipal corporation, township, school district, and hospital
owned by a political subdivision or subdivisions other than the
state;
(2) Every person, firm, and private corporation, including
any public service corporation, that (a) has in service one or
more employees regularly in the same business or in or about the
same establishment under any contract of hire, express or
implied, oral or written, or (b) is bound by any such contract of
hire or by any other written contract, to pay into the insurance
fund the premiums provided by this chapter.
All such employers are subject to this chapter. Any member
of a firm or association, who regularly performs manual labor in
or about a mine, factory, or other establishment, including a
household establishment, shall be considered an employee in
determining whether such person, firm, or private corporation, or
public service corporation, has in its service, one or more
employees and the employer shall report the income derived from
such labor to the bureau as part of the payroll of such employer,
and such member shall thereupon be entitled to all the benefits
of an employee.
(C) "Injury" includes any injury, whether caused by
external accidental means or accidental in character and result,
received in the course of, and arising out of, the injured
employee's employment. "Injury" does not include:
(1) Psychiatric conditions except where the conditions
have arisen from an injury or occupational disease;
(2) Injury or disability caused primarily
by the natural
deterioration of tissue, an organ, or part of the body;
(3) Injury or disability incurred in voluntary
participation in an employer-sponsored recreation or fitness
activity if the employee signs a waiver of the employee's right to
compensation or benefits under this chapter prior to engaging in
the recreation or fitness activity.
(D) "Child" includes a posthumous child and a child
legally adopted prior to the injury.
(E) "Family farm corporation" means a corporation founded
for the purpose of farming agricultural land in which the
majority of the voting stock is held by and the majority of the
stockholders are persons or the spouse of persons related to each
other within the fourth degree of kinship, according to the rules
of the civil law, and at least one of the related persons is
residing on or actively operating the farm, and none of whose
stockholders are a corporation. A family farm corporation does
not cease to qualify under this division where, by reason of any
devise, bequest, or the operation of the laws of descent or
distribution, the ownership of shares of voting stock is
transferred to another person, as long as that person is within
the degree of kinship stipulated in this division.
(F) "Occupational disease" means a disease contracted in the course of
employment, which by its causes and the characteristics of its manifestation
or the condition of the employment results in a hazard which distinguishes the
employment in character from employment generally, and the employment creates
a risk of contracting the disease in greater degree and in a different manner
from the public in general.
(G) "Self-insuring employer" means any of the following
categories of employers if AN EMPLOYER WHO IS granted the privilege
of paying
compensation and benefits directly under section 4123.35 of the
Revised Code:
(1) Any employer mentioned in division (B)(2) of this
section;
(2) A board of county hospital trustees;
(3) A publicly owned utility;
(4) A, INCLUDING A board of county commissioners for the
sole purpose of constructing a
sports facility as defined in section 307.696 of the Revised Code, provided
that the electors
of the county in which the sports facility is to be built have approved
construction of a sports facility by ballot election no later than
November 6, 1997.
(H) "PUBLIC EMPLOYER" MEANS AN EMPLOYER AS DEFINED IN DIVISION
(B)(1) OF THIS SECTION.
Sec. 4123.35. (A) Except as provided in this section,
every employer mentioned in division (B)(2) of section 4123.01 of
the Revised Code, and every publicly owned utility shall pay semiannually
in the months of January and July into
the state insurance fund the amount of annual premium the
administrator of workers' compensation fixes for the employment
or occupation of the employer, the amount of which premium to be
paid by each employer to be determined by the classifications,
rules, and rates made and published by the administrator. The employer shall
pay semiannually a further sum of money into the state insurance
fund as
may be ascertained to be due
from the employer by applying the rules of the
administrator, and a receipt or certificate certifying that payment
has been made
shall be mailed immediately to the employer by the bureau of workers'
compensation. The receipt or certificate is prima-facie evidence of
the
payment of the premium.
The bureau of workers' compensation shall verify with the
secretary of state the existence of all corporations and
organizations making application for workers' compensation
coverage and shall require every such application to include the
employer's federal identification number.
An employer as defined in division (B)(2) of section
4123.01 of the Revised Code who has contracted with a
subcontractor is liable for the unpaid premium due from any
subcontractor with respect to that part of the payroll of the
subcontractor that is for work performed pursuant to the
contract with the employer.
Division (A) of this section
providing for the payment
of premiums semiannually does not apply to any employer who was a subscriber
to the state insurance fund prior to January 1, 1914, or who may first
become a subscriber to the fund in any month other than January or
July. Instead, the semiannual premiums shall be paid by those
employers from time to time upon the expiration of the respective periods for
which payments into the fund have been made by them.
The administrator shall adopt rules to permit employers to
make periodic payments of the semiannual premium due under this
division. The rules shall include provisions for the assessment
of interest charges, where appropriate, and for the assessment of
penalties when an employer fails to make timely premium
payments. An employer who timely pays the amounts due under this
division is entitled to all of the benefits and protections of
this chapter. Upon receipt of payment, the bureau immediately
shall mail a receipt or certificate to the employer certifying that
payment has
been made, which receipt is prima-facie evidence of payment. Workers'
compensation coverage under this chapter continues
uninterrupted upon timely receipt of payment under this division.
Every PUBLIC employer mentioned in division (B)(1) of section
4123.01 of the Revised Code, except boards of county hospital
trustees PUBLIC EMPLOYERS that are self-insuring employers under
this section, shall comply
with sections 4123.38 to 4123.41, and 4123.48 of
the Revised
Code in regard to the contribution of moneys to the public
insurance fund.
(B) Provided, that employers mentioned in division (B)(2)
of section 4123.01 of the Revised Code, boards of county hospital
trustees, and publicly owned utilities EMPLOYERS who will abide by
the
rules of the administrator and who may be of sufficient financial
ability to render certain the payment of compensation to injured
employees or the dependents of killed employees, and the
furnishing of medical, surgical, nursing, and hospital attention
and services 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 to 4123.67 of the Revised Code, and who do
not desire to insure the payment thereof or indemnify themselves
against loss sustained by the direct payment thereof, upon a
finding of such facts by the administrator, may be granted the privilege to
pay
individually
compensation, and furnish medical, surgical, nursing, and
hospital services and attention and funeral expenses directly to
injured employees or the dependents of killed employees, thereby
being
granted status as a self-insuring employer. The
administrator may charge employers, boards of county hospital
trustees, or publicly owned utilities who apply for the status as
a self-insuring employer a reasonable application fee to cover
the bureau's costs in connection with processing and making a
determination with respect to an application. All
ALL employers
granted such status shall demonstrate sufficient financial and
administrative ability to assure that all obligations under this
section are promptly met. The administrator shall deny the
privilege where the employer is unable to demonstrate the
employer's ability to promptly meet all the obligations imposed on the
employer by this section. The
(1) THE administrator shall consider, but is not
limited
to, the following factors, where applicable, in determining the
employer's ability to meet all of the obligations imposed on the
employer by this section:
(1)(a) The employer employs a minimum of five hundred
employees in this state;
(2)(b) The employer has operated in this state for a minimum
of two years, provided that an employer who has purchased,
acquired, or otherwise succeeded to the operation of a business,
or any part thereof, situated in this state that has operated for
at least two years in this state, also shall qualify;
(3)(c) Where the employer previously contributed to the state
insurance fund or is a successor employer as defined by bureau
rules, the amount of the buy-out BUYOUT, as defined by bureau
rules;
(4)(d) The sufficiency of the employer's assets located in
this state to insure the employer's solvency in paying
compensation directly;
(5)(e) The financial records, documents, and data, certified
by a certified public accountant, necessary to provide the
employer's full financial disclosure. The records, documents,
and data include, but are not limited to, balance sheets and
profit and loss history for the current year and previous four
years.
(6)(f) The employer's organizational plan for the
administration of the workers' compensation law;
(7)(g) The employer's proposed plan to inform employees of
the change from a state fund insurer to a self-insuring employer,
the procedures the employer will follow as a self-insuring
employer, and the employees' rights to compensation and benefits;
and
(8)(h) The employer has either an account in a financial
institution in this state, or if the employer maintains an
account with a financial institution outside this state, ensures
that workers' compensation checks are drawn from the same account
as payroll checks or the employer clearly indicates that payment
will be honored by a financial institution in this state.
The administrator may waive the requirements of divisions
(B)(1)(a) and (2)(b) of this section and the
requirement of division
(B)(5)(1)(e) of this section that the financial records,
documents, and
data be certified by a certified public accountant. The
administrator shall adopt rules establishing the criteria that an
employer shall meet in order for the administrator to waive the
requirement of division (B)(5)(1)(e) of this section. Such
rules may
require additional security of that employer pursuant to division
(E) of section 4123.351 of the Revised Code. The
THE administrator
shall not grant the status of self-insuring employer to any
public employer, other than publicly owned utilities and boards
of county hospital trustees. THE STATE, EXCEPT THAT THE ADMINISTRATOR
MAY
GRANT THE STATUS OF SELF-INSURING EMPLOYER TO A STATE INSTITUTION OF HIGHER
EDUCATION, EXCLUDING ITS HOSPITALS, THAT MEETS THE REQUIREMENTS OF DIVISION
(B)(2) OF THIS SECTION.
(2) WHEN CONSIDERING THE APPLICATION OF A PUBLIC EMPLOYER, EXCEPT
FOR A BOARD OF COUNTY COMMISSIONERS DESCRIBED IN DIVISION (G) OF
SECTION 4123.01 OF THE REVISED CODE, A BOARD OF A COUNTY
HOSPITAL,
OR A PUBLICLY OWNED UTILITY, THE ADMINISTRATOR SHALL VERIFY THAT THE PUBLIC
EMPLOYER SATISFIES ALL OF THE FOLLOWING REQUIREMENTS AS
THE REQUIREMENTS APPLY TO THAT PUBLIC EMPLOYER:
(a) FOR THE TWO-YEAR PERIOD PRECEDING APPLICATION UNDER
THIS SECTION, THE PUBLIC EMPLOYER HAS MAINTAINED AN UNVOTED DEBT CAPACITY
EQUAL
TO AT LEAST TWO TIMES THE AMOUNT OF THE
CURRENT ANNUAL PREMIUM ESTABLISHED BY THE ADMINISTRATOR UNDER THIS
CHAPTER FOR THAT PUBLIC EMPLOYER FOR THE YEAR IMMEDIATELY
PRECEDING THE YEAR IN WHICH THE PUBLIC EMPLOYER MAKES APPLICATION
UNDER THIS SECTION.
(b) FOR EACH OF THE TWO FISCAL YEARS PRECEDING APPLICATION UNDER
THIS
SECTION, THE UNRESERVED AND UNDESIGNATED YEAR-END FUND BALANCE IN THE PUBLIC
EMPLOYER'S GENERAL FUND IS EQUAL TO AT LEAST
FIVE PER CENT OF THE PUBLIC EMPLOYER'S GENERAL FUND REVENUES FOR THE FISCAL
YEAR COMPUTED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES.
(c) FOR THE FIVE-YEAR PERIOD PRECEDING APPLICATION UNDER
THIS
SECTION, THE PUBLIC EMPLOYER, TO THE EXTENT APPLICABLE, HAS
COMPLIED FULLY WITH THE CONTINUING DISCLOSURE REQUIREMENTS
ESTABLISHED IN RULES ADOPTED BY THE UNITED STATES SECURITIES
AND
EXCHANGE COMMISSION UNDER 17 C.F.R.
240.15c2-12.
(d) FOR THE FIVE-YEAR PERIOD PRECEDING APPLICATION UNDER THIS
SECTION, THE PUBLIC EMPLOYER HAS NOT HAD ITS LOCAL GOVERNMENT FUND
DISTRIBUTION WITHHELD ON ACCOUNT OF THE PUBLIC
EMPLOYER BEING INDEBTED OR OTHERWISE OBLIGATED TO THE STATE.
(e) FOR THE FIVE-YEAR PERIOD PRECEDING APPLICATION UNDER THIS
SECTION, THE PUBLIC EMPLOYER HAS NOT BEEN UNDER A FISCAL WATCH OR FISCAL
EMERGENCY
PURSUANT TO SECTION 118.023, 118.04, OR 3316.03 OF THE REVISED
CODE.
(f) FOR THE PUBLIC EMPLOYER'S FISCAL YEAR PRECEDING APPLICATION
UNDER THIS SECTION, THE PUBLIC EMPLOYER HAS OBTAINED AN ANNUAL FINANCIAL
AUDIT AS REQUIRED UNDER SECTION 117.10 OF THE REVISED
CODE, WHICH HAS BEEN RELEASED BY THE AUDITOR OF STATE WITHIN SEVEN
MONTHS AFTER THE END OF THE PUBLIC EMPLOYER'S FISCAL YEAR.
(g) ON THE DATE OF APPLICATION, THE PUBLIC EMPLOYER HOLDS A DEBT
RATING OF AA3 OR HIGHER ACCORDING TO MOODY'S INVESTORS
SERVICE, INC., OR A COMPARABLE RATING BY AN INDEPENDENT RATING AGENCY
SIMILAR TO MOODY'S INVESTORS SERVICE, INC.
(h) THE PUBLIC EMPLOYER AGREES TO GENERATE AN ANNUAL ACCUMULATING
BOOK RESERVE IN ITS FINANCIAL STATEMENTS REFLECTING AN ACTUARIALLY GENERATED
RESERVE ADEQUATE TO PAY PROJECTED
CLAIMS UNDER THIS CHAPTER FOR THE APPLICABLE PERIOD OF TIME, AS
DETERMINED BY THE ADMINISTRATOR.
(i) FOR A PUBLIC EMPLOYER THAT IS A HOSPITAL, THE PUBLIC EMPLOYER
SHALL SUBMIT AUDITED FINANCIAL STATEMENTS SHOWING THE HOSPITAL'S OVERALL
LIQUIDITY CHARACTERISTICS, AND THE ADMINISTRATOR SHALL DETERMINE, ON AN
INDIVIDUAL BASIS, WHETHER THE PUBLIC EMPLOYER SATISFIES LIQUIDITY
STANDARDS EQUIVALENT TO THE LIQUIDITY STANDARDS OF OTHER PUBLIC
EMPLOYERS.
(j) ANY ADDITIONAL CRITERIA THAT THE ADMINISTRATOR ADOPTS BY RULE
PURSUANT TO DIVISION (E) OF THIS SECTION.
THE ADMINISTRATOR SHALL NOT APPROVE THE APPLICATION OF A PUBLIC
EMPLOYER, EXCEPT FOR A BOARD OF COUNTY COMMISSIONERS DESCRIBED IN
DIVISION (G) OF SECTION 4123.01 OF THE REVISED
CODE, A BOARD OF A
COUNTY HOSPITAL, OR PUBLICLY OWNED UTILITY, WHO DOES NOT SATISFY ALL OF
THE REQUIREMENTS LISTED IN DIVISION (B)(2) OF THIS SECTION.
(C) Provided, that a A board of county commissioners
mentioned DESCRIBED in division
(G)(4) of section 4123.01 of the
Revised Code,
as an employer, that will abide by the rules of the administrator and that may
be of sufficient financial ability to render certain the payment of
compensation to injured employees or the dependents of killed employees, and
the furnishing of medical, surgical, nursing, and hospital attention and
services 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 to 4123.67
of
the Revised
Code, and that does not desire to insure the
payment thereof or indemnify itself against loss sustained by the direct
payment thereof, upon a finding of such facts by the administrator, may be
granted the privilege to pay individually compensation, and furnish medical,
surgical, nursing, and hospital services and attention and funeral expenses
directly to injured employees or the dependents of killed employees, thereby
being granted status as a self-insuring employer. The administrator may
charge
a board of county commissioners mentioned DESCRIBED in division
(G)(4) of section 4123.01 of the
Revised Code
that applies for the status as a self-insuring employer a reasonable
application fee to cover the bureau's costs in connection with processing and
making a determination with respect to an application. All employers granted
such status shall demonstrate sufficient financial and administrative ability
to assure that all obligations under this section are promptly met. The
administrator shall deny the privilege where the employer is unable to
demonstrate the employer's ability to promptly meet all the obligations
imposed
on the employer by this section. The administrator shall consider, but is not
limited to, the following factors, where applicable, in determining the
employer's ability to meet all of the obligations imposed on the board as an
employer by this section:
(1) The board as an employer employs a minimum of five hundred
employees in this state;
(2) The board has operated in this state for a minimum of two years;
(3) Where the board previously contributed to the state insurance
fund or is a successor employer as defined by bureau rules, the amount of the
buy-out BUYOUT, as defined by bureau rules;
(4) The sufficiency of the board's assets located in this state to
insure the board's solvency in paying compensation directly;
(5) The financial records, documents, and data, certified by a
certified public accountant, necessary to provide the board's full financial
disclosure. The records, documents, and data include, but are not limited to,
balance sheets and profit and loss history for the current year and previous
four years.
(6) The board's organizational plan for the administration of the
workers' compensation law;
(7) The board's proposed plan to inform employees of the proposed
self-insurance, the procedures the board will follow as a self-insuring
employer, and the employees' rights to compensation and benefits;
(8) The board has either an account in a financial institution in
this state, or if the board maintains
an account with a financial institution outside this state,
ensures that workers' compensation checks are drawn from the
same account as payroll checks or the board clearly indicates
that payment will be honored by a financial institution in this
state;
(9) The board shall provide the administrator a surety bond in an
amount equal to one hundred twenty-five per cent of the projected losses as
determined by the administrator.
(D) The administrator shall require a surety bond from all
self-insuring employers, issued pursuant to section 4123.351 of
the Revised Code, that is sufficient to compel, or secure to
injured employees, or to the dependents of employees killed, the
payment of compensation and expenses, which shall in no event be
less than that paid or furnished out of the state insurance fund
in similar cases to injured employees or to dependents of killed
employees whose employers contribute to the fund, except when an
employee of the employer, who has suffered the loss of a hand,
arm, foot, leg, or eye prior to the injury for which compensation
is to be paid, and thereafter suffers the loss of any other of
the members as the result of any injury sustained in the course
of and arising out of the employee's employment, the
compensation to be paid by the self-insuring employer is limited to the
disability suffered in the subsequent injury, additional
compensation, if
any, to be paid by the bureau out of the surplus created by
section 4123.34 of the Revised Code.
(E) In addition to the requirements of this section, the
administrator shall make and publish rules governing the manner
of making application and the nature and extent of the proof
required to justify a finding of fact by the administrator as to
granting the status of a self-insuring employer, which rules
shall be general in their application, one of which rules shall
provide that all self-insuring employers shall pay into the state
insurance fund such amounts as are required to be credited to the
surplus fund in division (B) of section 4123.34 of the Revised
Code. THE ADMINISTRATOR MAY ADOPT RULES ESTABLISHING REQUIREMENTS IN
ADDITION TO THE REQUIREMENTS DESCRIBED IN DIVISION (B)(2) OF THIS
SECTION THAT A PUBLIC EMPLOYER SHALL MEET IN ORDER TO QUALIFY FOR
SELF-INSURING STATUS.
Employers shall secure directly from the bureau central
offices application forms upon which the bureau shall stamp a
designating number. Prior to submission of an application, an
employer shall make available to the bureau, and the bureau shall
review, the information described in divisions DIVISION (B)(1)
to (8) of
this section, AND PUBLIC EMPLOYERS SHALL MAKE AVAILABLE, AND THE
BUREAU SHALL REVIEW, THE INFORMATION NECESSARY TO VERIFY WHETHER THE PUBLIC
EMPLOYER MEETS THE REQUIREMENTS LISTED IN DIVISION (B)(2) OF THIS
SECTION. An employer shall file the completed application
forms with an application fee, which shall cover the costs of
processing the application, as established by the administrator,
by rule, with the bureau at least ninety days prior to the
effective date of the employer's new status as a self-insuring
employer. The application form is not deemed complete until all
the required information is attached thereto. The bureau shall
only accept applications that contain the required information.
(F) The bureau shall review completed applications within
a reasonable time. If the bureau determines to grant an employer
the status as a self-insuring employer, the bureau shall issue a
statement, containing its findings of fact, that is prepared by
the bureau and signed by the administrator. If the bureau
determines not to grant the status as a self-insuring employer,
the bureau shall notify the employer of the determination and
require the employer to continue to pay its full premium into the
state insurance fund. The administrator also shall adopt rules
establishing a minimum level of performance as a criterion for
granting and maintaining the status as a self-insuring employer
and fixing time limits beyond which failure of the self-insuring
employer to provide for the necessary medical examinations and
evaluations may not delay a decision on a claim.
(G) The administrator shall adopt rules setting forth
procedures for auditing the program of self-insuring employers. The bureau
shall conduct the audit upon a random basis or
whenever the bureau has grounds for believing that an A
SELF-INSURING employer is
not in full compliance with bureau rules or this chapter.
The administrator shall monitor the programs conducted by
self-insuring employers, to ensure compliance with bureau
requirements and for that purpose, shall develop and issue to
self-insuring employers standardized forms for use by the SELF-INSURING
employer in all aspects of the SELF-INSURING employers' direct
compensation
program and for reporting of information to the bureau.
The bureau shall receive and transmit to the SELF-INSURING employer all
complaints concerning any self-insuring employer. In the case of
a complaint against a self-insuring employer, the administrator
shall handle the complaint through the self-insurance division of
the bureau. The bureau shall maintain a file by employer of all
complaints received that relate to the employer. The bureau
shall evaluate each complaint and take appropriate action.
The administrator shall adopt as a rule a prohibition
against any self-insuring employer from harassing, dismissing, or
otherwise disciplining any employee making a complaint, which
rule shall provide for a financial penalty to be levied by the
administrator payable by the offending SELF-INSURING employer.
(H) For the purpose of making determinations as to whether
to grant status as a self-insuring employer, the administrator
may subscribe to and pay for a credit reporting service that
offers financial and other business information about individual
employers. The costs in connection with the bureau's
subscription or individual reports from the service about an
applicant may be included in the application fee charged
employers under this section.
(I) The administrator, notwithstanding other
provisions of this chapter, may permit a self-insuring employer to
resume payment of premiums to the state insurance fund with
appropriate credit modifications to the employer's basic premium
rate as such rate is determined pursuant to section 4123.29 of
the Revised Code.
(J) On the first day of July of each year, the
administrator shall calculate separately each self-insuring
employer's assessments for the safety and hygiene fund,
administrative costs pursuant to section 4123.342 of the Revised
Code, and for the portion of the surplus fund under division (B)
of section 4123.34 of the Revised Code that is not used for
handicapped reimbursement, on the basis of the paid compensation
attributable to the individual self-insuring employer according
to the following calculation:
(1) The total assessment against all self-insuring
employers as a class for each fund and for the administrative
costs for the year that the assessment is being made, as
determined by the administrator, divided by the total amount of
paid compensation for the previous calendar year attributable to
all amenable self-insuring employers;
(2) Multiply the quotient in division (J)(1) of this
section by the total amount of paid compensation for the previous
calendar year that is attributable to the individual
self-insuring employer for whom the assessment is being
determined. Each self-insuring employer shall pay the assessment
that results from this calculation, unless the assessment
resulting from this calculation falls below a minimum assessment,
which minimum assessment the administrator shall determine on the
first day of July of each year with the advice and consent of the workers'
compensation oversight commission, in which event, the self-insuring employer
shall pay the minimum assessment.
In determining the total amount due for the total
assessment against all self-insuring employers as a class for
each fund and the administrative assessment, the administrator
shall reduce proportionately the total for each
fund and
assessment by the amount of money in the self-insurance
assessment fund as of the date of the computation of the
assessment.
The administrator shall calculate the assessment for the
portion of the surplus fund under division (B) of section 4123.34
of the Revised Code that is used for handicapped reimbursement in
the same manner as set forth in divisions (J)(1) and (2) of
this
section except that the administrator shall calculate the total
assessment for this portion of the surplus fund only on the basis
of those self-insuring employers that retain participation in the
handicapped reimbursement program and the individual
self-insuring employer's proportion of paid compensation shall be
calculated only for those self-insuring employers who retain
participation in the handicapped reimbursement program. The
administrator, as the administrator determines
appropriate, may determine the
total assessment for the handicapped portion of the surplus fund
in accordance with sound actuarial principles.
The administrator shall calculate the assessment for the
portion of the surplus fund under division (B) of section 4123.34
of the Revised Code that under division (D) of section 4121.66 of
the Revised Code is used for rehabilitation costs in the same
manner as set forth in divisions (J)(1) and (2) of this
section,
except that the administrator shall calculate the total
assessment for this portion of the surplus fund only on the basis
of those self-insuring employers who have not made the election
to make payments directly under division (D) of section 4121.66
of the Revised Code and an individual self-insuring employer's
proportion of paid compensation only for those self-insuring
employers who have not made that election.
An employer who no longer is a self-insuring employer in
this state or who no longer is operating in this state, shall
continue to pay assessments for administrative costs and for the
portion of the surplus fund under division (B) of section 4123.34
of the Revised Code that is not used for handicapped
reimbursement, based upon paid compensation attributable to
claims that occurred while the employer was a self-insuring
employer within this state.
(K) There is hereby created in the state treasury the
self-insurance assessment fund. All investment earnings of the
fund shall be deposited in the fund. The administrator shall use
the money in the self-insurance assessment fund only for
administrative costs as specified in section 4123.341 of the
Revised Code.
(L) Every self-insuring employer shall certify, in
affidavit form subject to the penalty for perjury, to the bureau
the amount of the self-insuring employer's paid compensation for
the previous calendar year. In reporting paid compensation paid
for the previous year, a self-insuring employer shall exclude
from the total amount of paid compensation any reimbursement the
SELF-INSURING
employer receives in the previous calendar year from the surplus
fund pursuant to section 4123.512 of the Revised Code for any
paid compensation. The self-insuring employer also shall exclude
from the paid compensation reported any amount recovered under
section 4123.93 of the Revised Code and any amount that is
determined not to have been payable to or on behalf of a claimant
in any final administrative or judicial proceeding. The
self-insuring employer shall exclude such amounts from the paid
compensation reported in the reporting period subsequent to the
date the determination is made. The administrator shall adopt
rules, in accordance with Chapter 119. of the Revised Code,
establishing the date by which self-insuring employers must
submit such information and the amount of the assessments
provided for in division (J) of this section for employers
who
have been granted self-insuring status within the last calendar
year.
The administrator shall include any assessment that remains
unpaid for previous assessment periods in the calculation and
collection of any assessments due under this division or division
(J) of this section.
(M) As used in this section, "paid compensation" means all
amounts paid by a self-insuring employer for living maintenance
benefits, all amounts for compensation paid pursuant to sections
4121.63, 4121.67, 4123.56, 4123.57, 4123.58, 4123.59, 4123.60,
and 4123.64 of the Revised Code, all amounts paid as wages in
lieu of such compensation, all amounts paid in lieu of such
compensation under a nonoccupational accident and sickness
program fully funded by the self-insuring employer, and all
amounts paid by a self-insuring employer for a violation of a
specific safety standard pursuant to Section 35 of Article II,
Ohio Constitution and section 4121.47 of the Revised Code.
(N) Should any section of this chapter or Chapter 4121. of
the Revised Code providing for self-insuring employers'
assessments based upon compensation paid be declared
unconstitutional by a final decision of any court, then that
section of the Revised Code declared unconstitutional shall
revert back to the section in existence prior to November 3,
1989, providing for assessments based upon payroll.
(O) The administrator may grant a self-insuring employer
the
privilege to self-insure a construction project entered into by the
self-insuring employer that is scheduled for completion within six years after
the date the project begins, and the total cost of which is estimated to
exceed
one hundred million dollars. The administrator may waive such cost and time
criteria and grant a self-insuring employer the privilege to self-insure a
construction project regardless of the time needed to complete
the construction project and provided that the cost of the construction
project is estimated to exceed fifty million dollars. A self-insuring
employer who desires to self-insure
a construction project shall submit to the administrator an application
listing the dates the construction project is scheduled to begin and end, the
estimated
cost of the construction project, the contractors and subcontractors whose
employees are to be self-insured by the self-insuring employer, the
provisions of a safety program that is specifically designed for the
construction project, and a statement as to whether a collective
bargaining agreement governing the rights, duties, and
obligations of each of the parties to the agreement with respect
to the construction project exists between the self-insuring
employer and a labor organization.
A self-insuring employer may apply to self-insure the employees of either
of the following:
(1) All contractors and subcontractors who perform labor or
work or provide materials for the construction project;
(2) All contractors and, at the administrator's discretion, a substantial
number of all the subcontractors who perform labor or work or provide
materials for the construction project.
Upon approval of the application, the administrator shall mail a
certificate granting the privilege to self-insure the construction project to
the self-insuring employer. The certificate shall contain the name of the
self-insuring employer and the name, address, and telephone number of the
self-insuring employer's representatives who are responsible for administering
workers' compensation claims for the construction project. The self-insuring
employer shall post the certificate in a conspicuous place at the site of the
construction project.
The administrator shall maintain a record of the contractors and
subcontractors whose employees are covered under the certificate issued to the
self-insured employer. A self-insuring employer immediately shall notify the
administrator when any contractor or subcontractor is added or eliminated
from inclusion under the certificate.
Upon approval of the application, the self-insuring employer is
responsible for the administration and payment of all claims under this
chapter and Chapter 4121. of the Revised Code
for the employees of the contractor and subcontractors covered under the
certificate who receive injuries or are killed in the course of and arising
out of employment
on the construction project, or who contract an occupational disease in the
course of employment on the construction project. For purposes of this
chapter and Chapter 4121. of the Revised Code,
a claim that is administered and paid in accordance with this division is
considered a claim against the self-insuring employer listed in the
certificate. A contractor or subcontractor included under the certificate
shall report to the self-insuring employer listed in the certificate, all
claims that arise under this chapter and
Chapter 4121. of the Revised Code
in connection with the construction project for which the certificate is
issued.
A self-insuring employer who complies with this division is entitled to
the protections provided under this chapter and
Chapter 4121. of the Revised Code
with respect to the employees of the contractors and subcontractors covered
under a certificate issued under this division for death or injuries that
arise out of, or death, injuries, or occupational diseases that arise in the
course of, those
employees' employment on that construction project, as if the employees were
employees of the self-insuring employer, provided that the self-insuring
employer also complies with this section. No employee of the contractors and
subcontractors covered under a certificate issued under this division shall be
considered the employee of the self-insuring employer listed in that
certificate for any purposes other than this chapter and
Chapter 4121. of the Revised Code. Nothing in this
division gives a self-insuring employer authority to control
the means, manner, or method of employment of the employees of the contractors
and subcontractors covered under a certificate issued under this
division.
The contractors and subcontractors included under a certificate issued
under this division are entitled to the protections provided under this
chapter and Chapter 4121. of the Revised Code
with respect to the contractor's or subcontractor's employees who are employed
on the construction project which is the subject of the certificate, for
death or injuries that arise out of, or death, injuries, or occupational
diseases that arise in
the course of, those employees' employment on that construction project.
The contractors and subcontractors included under a certificate issued
under this division shall identify in their payroll records the employees who
are considered the employees of the self-insuring employer listed in that
certificate for purposes of this chapter and
Chapter 4121. of the
Revised Code, and the amount that those employees earned for
employment on the construction project that is the subject of that
certificate. Notwithstanding any provision to the contrary under this chapter
and
Chapter 4121. of the Revised Code,
the administrator shall exclude the payroll that is reported for employees who
are considered the employees of the self-insuring employer listed in that
certificate, and that the employees earned for employment on the construction
project that is the subject of that certificate, when determining those
contractors' or subcontractors' premiums or assessments required under
this chapter and Chapter 4121. of the Revised Code. A self-insuring employer
issued a certificate under this division shall
include in the amount of paid compensation it reports pursuant to division
(L) of this section, the amount of paid
compensation the self-insuring employer paid pursuant to this division for the
previous calendar year.
Nothing in this division shall be construed as altering the rights of
employees under this chapter and Chapter 4121. of the Revised
Code as those rights existed prior to
September 17,
1996. Nothing in this division shall be
construed
as altering the rights devolved under sections 2305.31 and 4123.82 of the
Revised Code as those rights existed prior to September 17,
1996.
As used in this division, "privilege to self-insure a construction
project" means privilege to pay individually compensation, and to furnish
medical, surgical, nursing, and hospital services and attention and funeral
expenses directly to injured employees or the dependents of killed
employees.
(P) A self-insuring employer whose application is granted
under
division (O) of this section shall designate a safety
professional to
be responsible for the administration and enforcement of the safety program
that is specifically designed for the construction project that is the subject
of the application.
A self-insuring employer whose application is granted under division
(O) of
this section shall employ an ombudsperson for the construction project that is
the subject of the application. The ombudsperson shall have experience in
workers' compensation or the construction industry, or both. The ombudsperson
shall perform all of the following duties:
(1) Communicate with and provide information to employees who are
injured in the course of, or whose injury arises out of employment on the
construction project, or who contract an occupational disease in the course of
employment on the construction project;
(2) Investigate the status of a claim upon the request of an employee to
do so;
(3) Provide information to claimants, third party administrators,
employers, and other persons to assist those persons in protecting their
rights under this chapter and Chapter 4121. of the
Revised Code.
A self-insuring employer whose application is granted under division
(O) of this section shall post the name of the
safety professional and the ombudsperson and instructions for contacting the
safety professional and the ombudsperson in a conspicuous
place at the site of the construction project.
(Q) The administrator may consider all of the
following when deciding whether to grant a self-insuring
employer the privilege to self-insure a construction project as
provided under division (O) of
this section:
(1) Whether the self-insuring employer has an
organizational plan for the administration of the workers'
compensation law;
(2) Whether the safety program that is specifically
designed for the construction project provides for the safety of
employees employed on the construction project, is applicable
to all contractors and subcontractors who perform labor or work
or provide materials for the construction project, and has a component, a
safety training program that complies with standards adopted pursuant to the
"Occupational Safety and Health Act of
1970," 84 Stat. 1590, 29 U.S.C.A. 651, and provides for continuing
management and employee involvement;
(3) Whether granting the privilege to self-insure the
construction project will reduce the costs of the construction
project;
(4) Whether the self-insuring employer has employed an
ombudsperson as required under division
(P) of this section;
(5) Whether the self-insuring employer has sufficient
surety to secure the payment of claims for which the
self-insuring employer would be responsible pursuant to the
granting of the privilege to self-insure a construction project
under division (O) of this
section.
(R) AS USED IN THIS SECTION:
(1) "UNVOTED DEBT CAPACITY" MEANS THE AMOUNT
OF MONEY THAT A PUBLIC EMPLOYER MAY BORROW
WITHOUT VOTER APPROVAL OF A TAX LEVY;
(2) "STATE INSTITUTION OF HIGHER EDUCATION" MEANS THE STATE
UNIVERSITIES LISTED IN SECTION 3345.011 OF THE REVISED CODE,
COMMUNITY COLLEGES CREATED PURSUANT TO CHAPTER 3354. OF THE
REVISED CODE, UNIVERSITY BRANCHES
CREATED PURSUANT TO CHAPTER 3355. OF THE REVISED
CODE, TECHNICAL
COLLEGES CREATED PURSUANT TO CHAPTER 3357. OF THE REVISED
CODE,
AND STATE COMMUNITY COLLEGES CREATED PURSUANT TO CHAPTER 3358. OF
THE REVISED CODE.
Sec. 4123.353. (A) A PUBLIC EMPLOYER, EXCEPT FOR A BOARD OF
COUNTY COMMISSIONERS DESCRIBED IN DIVISION (G) OF SECTION 4123.01
OF THE REVISED CODE, A BOARD OF A COUNTY HOSPITAL, OR A
PUBLICLY
OWNED UTILITY, WHO IS GRANTED THE STATUS OF SELF-INSURING EMPLOYER
PURSUANT TO SECTION 4123.35 OF THE REVISED CODE SHALL DO
ALL OF THE FOLLOWING:
(1) RESERVE FUNDS AS NECESSARY, IN ACCORDANCE WITH SOUND AND
PRUDENT ACTUARIAL JUDGMENT, TO COVER THE COSTS THE PUBLIC EMPLOYER MAY
POTENTIALLY INCUR TO REMAIN IN COMPLIANCE WITH THIS CHAPTER AND
CHAPTER 4121. OF
THE REVISED CODE;
(2) INCLUDE ALL ACTIVITY UNDER THIS CHAPTER AND CHAPTER 4121. OF
THE REVISED CODE IN A SINGLE FUND ON THE PUBLIC EMPLOYER'S
ACCOUNTING RECORDS;
(3) WITHIN NINETY DAYS AFTER THE LAST DAY OF EACH FISCAL YEAR,
PREPARE AND MAINTAIN A REPORT OF THE RESERVED FUNDS DESCRIBED IN
DIVISION (A)(1) OF THIS SECTION AND DISBURSEMENTS MADE FROM THOSE
RESERVED FUNDS;
(4) WITHIN NINETY DAYS AFTER THE LAST DAY OF EACH FISCAL YEAR,
OBTAIN A WRITTEN REPORT PREPARED BY A MEMBER OF THE AMERICAN
ACADEMY OF ACTUARIES, CERTIFYING WHETHER THE RESERVED FUNDS DESCRIBED IN
DIVISION (A)(1) OF THIS SECTION ARE SUFFICIENT TO COVER THE
COSTS THE PUBLIC EMPLOYER MAY POTENTIALLY INCUR TO REMAIN IN COMPLIANCE WITH THIS CHAPTER
AND CHAPTER 4121. OF THE REVISED CODE, ARE COMPUTED IN ACCORDANCE
WITH ACCEPTED LOSS RESERVING STANDARDS, AND ARE FAIRLY STATED IN
ACCORDANCE WITH SOUND LOSS RESERVING PRINCIPLES.
(B) A PUBLIC EMPLOYER WHO IS SUBJECT TO DIVISION (A) OF THIS
SECTION SHALL MAKE THE REPORTS REQUIRED BY THAT DIVISION AVAILABLE FOR INSPECTION BY THE ADMINISTRATOR OF WORKERS' COMPENSATION AND ANY OTHER PERSON AT ALL
REASONABLE TIMES DURING REGULAR BUSINESS HOURS.
Section 2. That existing sections 4123.01 and 4123.35 of
the Revised Code are hereby repealed.
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