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Published on Sep 28
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On September 24th, the Bureau of Workers’ Compensation (BWC) Board of Directors approved a change to the group retrospective rating program that will increase BWC’s overall premium income by approximately $15.4 million annually. This represents a 6.3% increase and impacts participants in the group retrospective rating program beginning July 1, 2016. The change adds a provision to cover the costs of Managed Care Organization (MCO) expenses.
As stated in the July, 2015 Board Meeting notes, “Premium and assessment income for fiscal year 2015 has decreased compared to prior fiscal year income primarily due to a $60 million increase in credits earned by private and public employer taxing districts participating in group retrospective rating plans.”
To cover MCO expenses, BWC is increasing the Loss Development Factors for the group retrospective rating program by 12.4%. The Loss Development Factor is an underwriting element used in the calculation to determine the refund or assessment for each group. Everything else being equal, the increased Loss Development Factor reduces a group’s refund.
What you need to know about the changes:
• Your current (2015-16) group retro program is not changing. This change will go into effect for private employer groups for the rate year beginning July 1, 2016. If you are concerned about your current group’s performance, contact your group administrator and request the current status of the group’s expected refund.
• The larger the group premium, the less these changes will impact refunds. This means that Sheakley participants are positioned to realize a smaller reduction in refunds than other group participants because Sheakley groups currently have the largest average group premium. Before you enroll in a group retrospective program, ask three questions:
1. How many companies are already enrolled?
2. Based on those companies enrolled, what is the current group standard premium?
3. What underwriting criteria is in place to protect participants?
BWC Board of Directors meeting agendas and note can be found at https://www.bwc.ohio.gov/BASICS/BOARDOFDIRECTORS/
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