Workers' Compensation

Some Things You Need to Know About Ohio BWC Prospective Billing

Jeff Andrews
Reading time 2 Mins
Published on Aug 29
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Ohio-BWC-Prospective-Billing---Need-to-knowAs you may already know changes are coming for workers’ compensation in Ohio that stem from the Ohio Bureau of Workers’ Compensation’s (BWC) moving to a prospective billing system. The change may impact areas of your workers’ compensation program, so we’re here to help you.

Prospective billing is an insurance industry standard practice that will enable the Ohio BWC to collect premiums before extending coverage. Currently, Ohio employers pay for coverage they have already received.

How will prospective billing impact premiums?
The current billing plan for the Ohio BWC is based on total claims costs for claims occurring in the calendar year of the four oldest of the past five years. The most recent of those years being counted as the Green Year. The prospective billing plan will change the claim experience to total costs for claims based on the fiscal year of the four oldest of the past five fiscal years. This in turn will cause some claims to affect your experience history for five years instead of four.

How will this impact premium payments?
In an effort to ease the burden for active (non-lapsed) private state-fund employers of moving to prospective billing, the Ohio BWC will implement a total of eight months of transition credit where no payment is due. The first six-month transition credit will be for the 2014 Policy Year and will include 1/1/2015-6/30/2015. At that time, employers will only be required to submit their payroll report.

The second transition credit period will be the first two months of the policy year 2015 and will be reflected on your first prospective billing invoice due in August 2015.

We’re here to help! If you have any questions, feel free to ask.


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