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S. B. No. 213 As IntroducedAs Introduced
128th General Assembly | Regular Session | 2009-2010 |
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Cosponsors:
Senators Schaffer, Jones, Grendell, Hughes, Cates
A BILL
To amend section 4123.29 of the Revised Code to
require the Administrator of
Workers'
Compensation to make specified changes concerning
workers' compensation premium rates.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That section 4123.29 of the Revised Code be
amended to read as
follows:
Sec. 4123.29. (A) The administrator of workers'
compensation, subject to the approval of the bureau of workers'
compensation board of directors, shall do all of the
following:
(1) Classify occupations or industries with respect to
their
degree of hazard and determine the risks of the different
classes
according to the categories the national council on
compensation
insurance establishes that are applicable to
employers in this
state;
(2)(a) Fix the rates of premium of the risks of the classes
based upon the total payroll in each of the classes of occupation
or industry sufficiently large to provide a fund for the
compensation provided for in this chapter and to maintain a state
insurance fund from year to year. The administrator shall set
the
rates at a level that assures the solvency of the fund.
Where the
payroll cannot be obtained or, in the opinion of the
administrator, is not an adequate measure for determining the
premium to be paid for the degree of hazard, the administrator
may determine the rates of premium upon such other basis,
consistent with insurance principles, as is equitable in view of
the degree of hazard, and whenever in this chapter reference is
made to payroll or expenditure of wages with reference to fixing
premiums, the reference shall be construed to have been made also
to such other basis for fixing the rates of premium as the
administrator may determine under this section.
(b) If an employer elects to obtain other-states' coverage
pursuant to section 4123.292 of the Revised Code
through either
the administrator, if the administrator elects to
offer such
coverage, or an other-states' insurer, calculate the employer's
premium for the state insurance fund in the same manner as
otherwise required under division (A) of this section and section
4123.34 of the Revised Code, except that when the administrator
determines the expenditure of wages, payroll, or both upon which
to base the employer's premium, the administrator shall use only
the expenditure of wages, payroll, or both attributable to the
labor performed and services provided by that employer's employees
when those employees performed labor and provided services in this
state only and to which the other-states' coverage does not
apply.
(c) The administrator in setting or revising rates shall
furnish
to employers an adequate explanation of the basis for the
rates
set.
(3) Develop and make available to employers who are paying
premiums to the state insurance fund alternative premium plans.
Alternative premium plans shall include retrospective rating
plans. The administrator may make available plans under which an
advanced deposit may be applied against a specified deductible
amount per claim.
(4)(a) Offer to insure the obligations of employers under
this chapter under a plan that groups, for rating purposes,
employers, and pools the risk of the employers within the group
provided that the employers meet all of the following conditions:
(i) All of the employers within the group are members of
an
organization that has been in existence for at least two years
prior to the date of application for group coverage;
(ii) The organization was formed for purposes other than
that
of obtaining group workers' compensation under this
division;
(iii) The employers' business in the organization is
substantially similar such that the risks which are grouped are
substantially homogeneous;
(iv) The group of employers consists of at least one
hundred
members or the aggregate workers' compensation premiums
of the
members, as determined by the administrator,
are expected
to
exceed one hundred fifty thousand dollars during the coverage
period;
(v) The formation and operation of the group program in
the
organization will substantially improve accident prevention
and
claims handling for the employers in the group;
(vi) Each employer seeking to enroll in a group for
workers'
compensation coverage has an industrial insurance
account in good
standing with the bureau of workers' compensation
such that at the
time the agreement is processed no outstanding
premiums,
penalties, or assessments are due from any of the
employers.
(b) If an organization sponsors more than one employer group
to participate in group plans established under this section, that
organization may submit a single application that supplies all of
the information necessary for each group of employers that the
organization wishes to sponsor.
(c) In providing employer group plans under division (A)(4)
of
this section, the administrator shall consider an employer
group
as a single employing entity for purposes of
group
rating.
No employer may be a member of more than one
group
for
the
purpose of obtaining workers' compensation coverage
under
this
division.
(d) At the time the administrator revises premium rates
pursuant to this section and section 4123.34 of the Revised Code,
if the premium rate of an employer who participates in a group
plan established under this section changes from the rate
established for the previous year, the administrator, in addition
to sending the invoice with the rate revision to that employer,
shall send a copy of that invoice to the third-party administrator
that administers the group plan for that employer's group.
(e) In providing employer group plans under division (A)(4)
of this section, the administrator shall establish a program
designed to mitigate the impact of a significant claim that would
come into the experience of a private, state fund group-rated
employer for the first time and be a contributing factor in that
employer being excluded from a group-rated plan. The administrator
shall establish eligibility criteria and requirements that such
employers must satisfy in order to participate in this program.
For purposes of this program, the administrator shall establish a
discount on premium rates applicable to employers who qualify for
the program.
(f) In no event shall division (A)(4) of this section be
construed as granting to an employer status as a self-insuring
employer.
(g) The administrator shall develop classifications of
occupations or industries that are sufficiently distinct so as
not
to group employers in classifications that unfairly represent
the
risks of employment with the employer.
(5) Generally promote employer participation in the state
insurance fund through the regular dissemination of information
to
all classes of employers describing the advantages and
benefits of
opting to make premium payments to the fund. To that
end, the
administrator shall regularly make employers aware of
the various
workers' compensation premium packages developed and
offered
pursuant to this section.
(6) Make available to every employer who is paying
premiums
to the state insurance fund a program whereby the
employer or the
employer's agent pays to the claimant or on
behalf of the
claimant
the first fifteen thousand dollars of a compensable workers'
compensation medical-only claim filed by that claimant that is
related to the same injury or occupational disease. No formal
application is required; however, an employer must elect to
participate by telephoning the bureau after July 1, 1995. Once an
employer has elected to participate in the program, the employer
will be responsible for all bills in all medical-only claims with
a date of injury the same or later than the election date, unless
the employer notifies the bureau within fourteen days of receipt
of the notification of a claim being filed that it does not wish
to pay the bills in that claim, or the employer notifies the
bureau that the fifteen thousand dollar maximum has been paid, or
the employer notifies the bureau of the last day of service on
which it will be responsible for the bills in a particular
medical-only claim. If an
employer elects to enter the program,
the administrator shall not
reimburse the employer for such
amounts paid and shall not charge
the first fifteen thousand
dollars of any medical-only claim paid by
an employer to the
employer's experience or otherwise use it in
merit rating or
determining the risks of any employer for the
purpose of payment
of premiums under this chapter. A certified health care provider
shall extend to an employer who participates in this program the
same rates for services rendered to an employee of that employer
as the provider bills the administrator for the same type of
medical claim processed by the bureau and shall not charge,
assess, or otherwise attempt to collect from an employee any
amount for covered services or supplies that is in excess of that
rate. If an employer elects to enter the
program and the employer
fails to pay a bill for a medical-only
claim included in the
program, the employer shall be liable for
that bill and the
employee for whom the employer failed to pay the
bill shall not
be liable for that bill. The
administrator shall
adopt rules to
implement and administer
division (A)(6) of this
section. Upon
written request from the bureau, the employer shall
provide
documentation to the bureau of all medical-only bills that
they
are paying directly. Such requests from the bureau may not be
made more frequently than on a semiannual basis. Failure to
provide such documentation to the bureau within thirty days of
receipt of the request may result in the employer's forfeiture of
participation in the program for such injury. The provisions of
this section shall not apply to claims in which an employer with
knowledge of a claimed compensable injury or occupational disease,
has paid wages in lieu of compensation or total disability.
(B) The administrator, with the
advice and consent of the
board, by
rule, may do both of the following:
(1) Grant an employer who makes the employer's semiannual
premium
payment at least one month prior to the last day on which
the
payment may be made without penalty, a discount as the
administrator fixes from time to time;
(2) Levy a minimum annual administrative charge upon risks
where semiannual premium reports develop a charge less than the
administrator
considers adequate to offset administrative costs of
processing.
(C) The administrator shall adopt a rule that sets the
discount for programs or alternative premium plans
not
later than
the first day of September prior to the policy year
in
which the
discount for programs or alternative premium plans is to
be in
effect.
Section 2. That existing section 4123.29 of
the Revised
Code is hereby repealed.
Section 3. (A) As used in this section, "breakeven factor"
means an adjustment factor applied to the group rated experience
modification used to calculate the workers' compensation premium
rate of an employer that participates in the group rating program
created under division (A)(4) of section 4123.29 of the Revised
Code.
(B) Beginning on the effective date of this section, the
Administrator of Workers'
Compensation shall suspend the use of a
breakeven factor for a
period of two years. During that two-year
period, the
Administrator shall not lower the maximum premium
discount for
employers who participate in the group rating
program created
under division (A)(4) of section 4123.29 of the
Revised Code below
sixty-five per cent, and neither the
Administrator nor the Bureau of Workers' Compensation Board of
Directors shall make or approve any changes to the group rating
program.
(C) During the first year of the two-year period described in
division (B) of this section, the Administrator shall study the
premium rating system. The study shall be a collaborative effort
with stakeholders in the workers' compensation system. The
Administrator shall submit a report summarizing the results of the
study by the end of that first year to the Governor, the President
and Minority
Leader of the Senate, the Speaker and Minority
Leader of the House
of Representatives, and the chairpersons of
the standing
committees of the Senate and the House of
Representatives to which
legislation concerning workers'
compensation customarily is
referred. The Administrator shall
include in that report a
determination of the direction of future
premium rates and
supporting evidence of that determination and,
if the
Administrator determines that changes to Chapter 4121.,
4123.,
4127., or 4131. of the Revised Code are necessary to
implement the
report, a list of those recommended changes.
(D) During the second year of the two-year period described
in division (B) of this section, the Administrator, subject to the
approval of the Bureau
of Workers' Compensation Board of
Directors, may adopt rules in accordance with section 4123.29 of
the Revised Code, as amended by this act, and section 4123.34 of
the Revised Code to make changes to
the rating system to
implement the results of the study required
under division (C) of
this section.
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