Fiscal Note & Local Impact Statement
127 th General Assembly of Ohio
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BILL: |
DATE: |
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STATUS: |
SPONSOR: |
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LOCAL IMPACT
STATEMENT REQUIRED: |
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CONTENTS: |
Exempts
individuals covered under the federal Longshore and Harbor Workers'
Compensation Act from coverage under Ohio's Workers' Compensation Law |
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STATE FUND |
FY 2008 |
FY 2009 |
FUTURE YEARS |
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State Insurance Fund |
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Revenues |
Loss in premium
collections from exempt employers |
Loss in premium
collections from exempt employers |
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Expenditures |
- 0 - |
Decrease in benefits paid
to exempt employers |
Decrease in benefits paid
to exempt employers |
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Administrative
Cost Fund (Fund 023) |
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Revenues |
- 0 - |
- 0 - |
- 0 - |
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Expenditures |
- 0 - |
Potential minimal decrease
in administrative costs |
Potential minimal decrease
in administrative costs |
Note: The state
fiscal year is July 1 through June 30.
For example, FY 2008 is July 1, 2007 – June 30, 2008.
·
The
State Insurance Fund would experience a drop in premiums from Longshore Act
employers who choose to opt out of the state system. However, the Fund would also no longer have to pay benefits to
affected workers.
·
The
Bureau of Workers' Compensation may experience a minimal decrease in
administrative costs if it no longer administers coverage of longshore and
harbor workers under state law.
·
No
direct fiscal effect on political subdivisions.
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Under
current law, employers of longshore and harbor workers are required to pay
workers' compensation premiums under both the federal Longshore and Harbor
Workers' Compensation Act (LHWCA) and Ohio's Workers' Compensation Law. The bill excludes individuals covered by the
LHWCA from the definition of "employee" for the purposes of Ohio's
Workers' Compensation Law, thereby exempting them from the requirement to pay
premiums to the Bureau of Workers' Compensation (BWC) under state law. However, under the bill, employers may
choose to continue to provide longshore and harbor workers with coverage under
the state law.
Currently,
BWC has concurrent jurisdiction over longshore and harbor worker employers who
pay premiums under both the state and federal laws. Premiums under the state law are collected under National Council
on Compensation Insurance (NCCI) manual classification 7772, relating to
longshore and harbor workers, and deposited into the State Insurance Fund (SIF)
along with the premiums collected from other employers. Premiums under the LHWCA are deposited into
the Marine Industry Fund (Fund 823), and benefits paid from this fund are
subject to federal law. As the bill
exempts employers from paying premiums under state law, the bill has no effect
on premiums collected by or benefits disbursed from the Marine Industry
Fund. Only the State Insurance Fund is
affected.
According
to BWC, during 2006, there were 124 employers reporting payroll to manual 7772,
paying $1,116,063 in premiums to the State Insurance Fund. If none of these employers opts to continue
coverage under state law, the SIF would forgo collecting approximately this
amount in premiums, depending on any changes in coverage or actuarial
actions. The effect on the SIF is
expected to be revenue neutral, since while the fund would no longer be
collecting premiums from LHWCA employers, it would also no longer have to pay
benefits to them from the SIF.
Additionally,
it is possible that BWC may experience a slight decrease in costs to the
Administrative Cost Fund (Fund 023) if it no longer has to administer coverage
of longshore and harbor workers under state law. However, this will also depend on how many employers choose to continue
state coverage as well as LHWCA coverage.
LSC fiscal staff: Brian Hoffmeister, Budget Analyst