In response to the recent San Allen case in which the Cuyahoga County Common Pleas Court issued an order enjoining the Ohio BWC’s group rating program, the Ohio legislature has enacted House Bill 79, which became law on January 6, 2009. House Bill 79 allows the group rating program to continue by simply changing one word in Ohio Revised Code §4123.29, which creates and implements the program. By changing the word “retrospective” to “group,” the legislature avoids the problem identified by the court; that is, that the group rating program was actually a prospective program that permits employers to be dropped from the group following a particularly expensive claim that would increase the group’s overall workers’ compensation premiums.
As we wrote previously, the BWC is no fan of the large discounts currently provided to employers under the group rating program and has been working to gradually reduce those discounts in favor of base rate reductions. Those who favor the current group rating program point to the incentive – and reward – those discounts provide to employers that maintain a safe workplace. In addition, enforcement of the San Allen decision likely would have resulted in tremendous increases in workers’ compensation premiums for those employers that had previously benefited from the group rating program at a time when they could ill afford them due to current economic challenges.