Workers’ compensation is a system of no-fault insurance that provides medical benefits and monetary compensation to employees or their survivors for work-related injuries, diseases and deaths. Workers’ compensation is governed by state law.
In Ohio, the Ohio Workers’ Compensation Act (OWCA) governs the state workers’ compensation system. The Ohio Bureau of Workers’ Compensation (OBWC) administers the system and runs a state fund that provides coverage for most employers in the state.
The OWCA requires all Ohio employers with one or more employees to carry workers’ compensation coverage. An employee-employer relationship usually exists if the employer controls the working hours, selection of materials, traveling routes and a worker’s performance reviews.
An employer acting as a subcontractor to another employer must also obtain coverage for its employees. Employers that hire subcontractors should verify that the subcontractor has coverage for its employees. Otherwise, the employer that hired the subcontractor could be liable for injuries to the subcontractor’s employees.
Employers may meet the OWCA’s coverage requirement by either obtaining a coverage through the OBWC or obtaining approval to self-insure from the OBWC. Employers are not allowed, under any circumstance, to deduct any portion of their workers’ compensation premium or costs from the wages or salary of their employees.
Employers may obtain coverage from the OBWC by submitting a completed coverage application. A complete application will include both the Application for Ohio Workers Compensation Coverage (U-3 form) and a $120 application fee. If applicable, the OBWC will send an invoice for any deposit owed (up to $1000, based upon the employer’s level of risk).
Approximately 30 days after the OBWC receives the application with the required deposit, a Certificate of Premium Payment will be issued. The Certificate of Premium Payment will state when the employer’s coverage will begin and end as well as when the billing period ends.
At the end of the billing period, a semiannual payroll report and premium will be due. Payroll reports with an end date of Dec. 31 are due the last day of February of the following year and payroll reports with an end date of June 30 are due the last day of August of the same year.
When determining an employer’s premium, the workers’ compensation administrator will consider two primary categories: (1) the risk associated with the employer’s industry; and (2) the size of the employer’s payroll.
A self-insured employer assumes the liabilities associated with work-related accidents or occupational diseases rather than paying premiums to have the OBWC assume them. To self-insure, an employer must prove it has sufficient resources to cover all its OWCA obligations. For this reason, self-insured employers are mainly large organizations. The benefits an employer may gain from self-insurance include the flexibility to administer their own workers’ compensation program and the potential for claims cost savings.
To self-insure, an employer must obtain permission from the OBWC. This process includes submitting a number of forms to the OBWC, along with the following information:
- All financial records, documents and data necessary to provide a full financial disclosure including a balance sheet and a profit and loss statement for the current year and the previous four years;
- An organizational plan for the administration of the workers’ compensation law;
- A proposed plan to inform employees of the change from a state-fund insurer and procedures employees must follow when filing for compensation and benefits;
- Secretary of State papers providing proof of registration to do business in Ohio; and
- Information on the employer’s risk and claims-management procedures to establish a safe and more cost-effective workplace.The OBWC requires all employers to post notices that inform employees of the employer’s workers’ compensation coverage or self-insurance status. The OBWC provides the notices annually, and employers must post them in highly visible locations.Employers must keep a record of all injuries and occupational diseases, fatal or otherwise, that are:
RECORD KEEPING AND REPORTING REQUIREMENTS
Employers must keep a record of all injuries and occupational diseases, fatal or otherwise, that are:
- Are received or contracted by employees in the course of their employment; and
- Result in seven or more days of disability from work.
Within one week of having knowledge of the work-related condition, the employer must provide a written report to the OBWC.
For more information, contact Associated Underwriters Insurance or visit the OBWC’s website