In Ohio, Workers Compensation Insurance is the one insurance product you cannot buy through an insurance agent. That’s because Ohio is what is known as a monopolistic state. Workers compensation insurance is only available through the state in a monopolistic state. (the other three states that are monopolistic are North Dakota, Washington, and Wyoming,
The state plans all have their own rules, and purchasing anything through the state can be confusing and expensive. In the case of workers compensation insurance, there are some money saving options available. Ohio allows for group rating. Employers with some common theme (ie a trade association) will group together and the state will rate their premiums as if they were one large employer, instead of many smaller ones. For a small company, that can make a huge difference, as one bad claim can ruin a company’s experience and make their stand-alone rates terribly high. Being part of a group helps spread losses over a larger number of employers and makes everyone’s rates in the group a little lower.
Groups must be applied to every year, and many employers will use a third party administrator (TPA) to help them find the best groups, and to put into place workplace rules that will improve worker safety and reduce claims. You elect to use a third party administrator by filling out an AC3 form, which allows them to access your Ohio BWC claims experience. A well-administered group can save an employer up to 53% off the standard work comp rates (the 53% discount is currently mandated by the State of Ohio as the maximum allowed).
The Ohio BWC also allows for retrospectively rated groups, which examines the groups performance after the fact and then issues refunds if the group’s experience has been better than expected. Beware though, they can also issue assessments for additional premium if the group’s experience was worse than expected.
As mentioned earlier, you must apply for membership in a group each year. You must also be ACCEPTED into the group. Groups are under no obligation to accept all comers, so if your claims experience has been particularly bad, you may have difficulty finding a group that will accept you. That’s were third party administrators and brokers can really come in handy.
As you can see, there are a lot of moving parts to workers compensation insurance and we’ve just barely scratched the surface of all that is involved. Even though we can’t sell you a workers compensation insurance policy, our risk managers can assist you with your work comp issues, help you put worker safety programs into place and assist with choosing a group or TPA to work with. We’re here to be a resource to our commercial clients in all of your potential sources of risk.
About Community Insurance Group
Community Insurance Group is one of the largest independent insurance agencies in West Central Ohio with offices located in Sidney, Minster and Fort Loramie. We serve clients throughout Ohio, Indiana, Kentucky, Michigan, and Pennsylvania. Community Insurance Group takes pride in offering a wide range of insurance carriers and products, and works hard to create a successful and viable resource our communities can depend on. We specialize in Agribusiness and Farms, Contractors, Energy Dealers, Manufacturers, Trucking, Underground Storage Tanks, Emergency Service Organizations and Volunteer Fire Departments.