Self-Insurance Quarterly WorkshopSeptember/October 2016

David Sievert, Interim Director

Craig Thompson, Special Investigation Unit

Agenda

o BWC Special Investigations Unito House Bill 207o Assessments- Invoiceso Miscellaneous items o

Special Investigations Unito Shawn Miller - BWC Fraud Analyst

House Bill 207• Effective 9/1/2017 – ORC 4123.35, removes the requirement that an

employer must have 500 employees to be considered for self-insurance

• This will have no direct impact on existing SI employers

• This language will be removed from OAC 4123-19-03 , 4123-19-03.1 (Waiver), 4123-19-08 (Renewal)

• Language removed from publications and BWC SI department website

• Not yet clear how this will impact future applications for Self-Insurance, but the financial strength will remain the primary focus for new SI employers

House Bill 207• Experience Transfer effective January 1, 2017

• ORC 4123.35 (I) amended to include language for self-insuring employers returning to the state fund will provide medical costs and indemnity costs by claim and payroll by manual classification and year, and other information that may be required.

• BWC will develop a state fund experience modification (EM) factor for the employer’s new policy

House Bill 207

• Professional Employer Organizations (PEO)

• ORC 4125.07 (C) will require that a PEO must submit information required to allow BWC to develop an EM factor for a client employer that has terminated a lease and returned to the state fund

House Bill 207• PEO Must submit the following with termination of client

employer• Payroll for each client employer organized by manual

classification and year• Medical and indemnity costs of each client employer• Information may be required at other times after the

initial submission if necessary to determine future EM rates

House Bill 207

o BWC policy and administrative code will be amended to conform with the new statute

o OAC 4123-19-05 is being reviewedo The requirement to provide the information will

have a tight timeframe so the EM rate can be addressed timely

Assessmentso Three main components

o Calendar year compensation payments by self-insured employers to their injured workers, regardless of date of injury

o Projected benefit payments to injured workers of defaulted self-insured employers in calendar year and related costs

o Adjustments for other available revenue or shortfalls

Assessmentso Assessments are billed at the end of January and July and payments are

due by the end of February and August. If not paid on time a $500.00 late fee will be charged

o Send payments to P.O. Box 89492, Cleveland, OH 44101-6492. If addresses for payments are kept in a database please make sure it is correct. Always check the invoice for the correct mailing address.

o Overnight payments to Ohio Bureau of Workers' Compensation ATTN: Lockbox 89492 4910 Tiedeman Road Cleveland, OH 44144

o Pay online

Assessmentso Surplus Fund dropped by .02 and Guaranty Fund went

up by .02

o Overall assessment is flat for 2016 and 2017 assessment year

o Guaranty fund claims costs show steady drop, SIEGF claims are increasing at a similar rate.

AssessmentsEffective Calendar Year 2012 2013 2014 2015 2016 2017Effective Policy Year 7/1/2011 7/1/2012 7/1/2013 7/1/2014 7/1/2015 7/1/2016

Mandatory

Surplus Fund (Mandatory) 0.03 0.069 0.0100 0.0630 0.0800 0.0600

Self-Insuring Employer Guaranty Fund 0.0527 0.0400 0.1138 0.0470 0.0750 0.0950Total Rate 0.0827 0.1090 0.1238 0.1100 0.1550 0.1550

Administrative Cost Fund: BWC 0.0889 0.0889 0.0889 0.0871 0.0889 0.0893

Administrative Fund: IC 0.0750 0.0725 0.0696 0.0668 0.0668 0.0668

Safety & Hygiene Fund 0.005 0.005 0.005 0.005 0.0035 0.0030

Total Required Assessments 0.2516 0.2754 0.2873 0.2689 0.3142 0.3141

Optional

Surplus Fund (disallowed claims) 0.0334 0.03 0.0238 0.0173 0.04 0.0380Optional - no longer effective as of 2015

Surplus Fund (rehabilitation) 0.13 0.13 0.13 0.13 0.13 N/A

Surplus Fund (handicap) 0.248 0.248 0.248 0.248 0.248 N/A

Bankrupt Claimso TT payments have decreased 73% since 2004

-

50

100

150

200

250

300

350

400

00,000

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Clai

ms P

aid

Dolla

rs P

aid

Year of Payment

Dollars Paid Claim Count

Bankrupt Claimso WL payments have decreased 70% since 2004

-

10

20

30

40

50

60

70

80

90

100

00,000

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

1,000,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Clai

ms P

aid

Dolla

rs P

aid

Year of Payment

Dollars Paid Claim Count

Bankrupt Claims

05001,0001,5002,0002,5003,0003,5004,0004,500

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Clai

ms P

aid

Dolla

rs P

aid

Year of Payment

Dollars Paid Claim Count

Medical payments have decreased approximately 35% since 2004

Excess Insuranceo Excess policy information obtained with renewal applications

o Claims currently beyond retention identified with renewal applications

o SI Department has developed relationships with multiple carriers, with ongoing communication.

o Ongoing invoices sent to carriers for recovery of BWC paid costs.

o Detailed excess policy information gathered when bankruptcy is filed

o Contact made with carriers immediately upon notice of default.

o Procedures to initiate recovery at notice of default are in place.

$0.00

$1,000,000.00

$2,000,000.00

$3,000,000.00

$4,000,000.00

$5,000,000.00

$6,000,000.00

Year Excess Payments received

2005 $213,409.34

2006 $171,816.48

2007 $221,009.46

2008 $202,398.59

2009 $41,451.05

2010 $27,260.20

2011 $82,519.78

2012 $177,616.45

2013 $96,900.14

2014 $142,856.93

2015 $5,536,277.90

2016 through 6/20/16 $422,891.00

Total $7,336,407.32

Securitization

o For high risk SI employers we have 150% security-letters of credit.

o For those in the lowest category, we have 100% of actuarial study reserves.

o For recent defaults with recent cancellations security has been over 100% of reserves

Treatment Requests

o C9’s requested treatment should not be modifiedo Can not direct to specific vendoro When requesting new information or obtaining

an IME, act on C9 as soon as the information is requested

Miscellaneouso SI Medical only claimso C256 forms for PPD applications. Please send

them in, use ICD 10 o Notify BWC if you settle PTD claimo Power Suite Rollout- Impact of transition Mid

November

Contacting BWC When contacting the BWC self-insured department, please include self-insured policy number

614-466-6737 or 1-800-OHIOBWC, select SI

30 W. Spring St., Level 22Columbus, OH 43215Email: SIINQ@bwc.state.oh.us

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