Tax Tip of the Week | No. 248 | Businesses To Benefit From New BWC Changes

Tax Tip of the Week | April 30, 2014 | No. 248 | Businesses To Benefit From New BWC ChangesFrom the Ohio Society of CPA's...

The Ohio Bureau of Workers' Compensation (BWC) Board of Directors on April 23, 2014 approved $2.2 billion in employer credits to help with the proposed switch from retrospective to prospective billing.That is in addition to the $1 billion in premium rebates announced by the governor in 2013.Premium credits will help public and private employers make the jump to pay-as-you-go workers’ insurance in January 2015 without the double billing that would normally be required.Outgoing BWC Fiscal Planning Chief Tracy Valentino said forward billing will allow for another projected rate cut of 2% for private employers and 4% for public employers.“Additionally, Ohio would see the benefit of a higher level of employer satisfaction by cutting through the bureaucratic red tape that currently exists in the system and operating BWC in a manner consistent with private insurance practices,” Valentino said. “The decision to move to prospective payment, particularly with BWC's reducing the financial impact on private and public taxing district employers, will help modernize Ohio’s workers’ compensation system and simplify the system greatly for the employers who rely on it for coverage.”“The credit will facilitate a smooth transition for employers to a more user-friendly system that will provide them more flexibility while reducing their overall costs,” said BWC Administrator/CEO Stephen Buehrer.After prospective credits are in place, he said ongoing savings from the switch will total $28 million for private employers and $16 million for public employers in 2015 alone. Policyholders will also have the option of making 12 installment payments per year and earlier opportunities to participate in various incentives, including group experience rating and group retrospective rating programs.“Today was a formal step of the board to reserve that money as a liability of the fund,” Buehrer said outside the board meeting. “It shows that we’re trying to modernize the system, and we're trying to do it in a way that is not harmful to our customers.”

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