Kasich announces $65 million Workers’
Compensation Rate Cut
Average
rate for manufacturing and commercial classes falls more significantly
TWINSBURG – In order to reduce the cost of doing business in Ohio to
make Ohio companies and the state more competitive, Gov. John R. Kasich
today announced he is seeking an overall 4 percent cut in workers’
compensation base rates for a total cut in premiums of approximately
$65 million annually. Bureau of Workers Compensation
Administrator and CEO Steve Buehrer submitted the proposal to the BWC
Board of Directors at a meeting today.
If approved next month by the BWC Board, the new rates would become
effective July 1.
Kasich made the announcement during a visit to Mustang Dynamometer, a
Twinsburg company which manufactures equipment used by the automotive
industry to test quality and performance.
“Ohio has so much going for it—location, a trained workforce,
infrastructure, and an installed manufacturing base. We’ve got to
get our costs down, however, to be more competitive and workers’ comp
rates are an important place to start,” said Kasich.
A business’s specific rate is calculated according to the work it does
and its claim history. In addition to the overall drop in base
rates, the average rate for some key industries would fall even more.
For example, the average rate for the Manufacturing Industry Group
would fall 7 percent and the average rate for the Commercial Industry
Group, which includes various retail and wholesale establishments,
would fall 5 percent. Also, unlike prior years, the average rate
reduction would apply to employers regardless of whether they
participated in incentive programs such as group rating.
“Our goal is to increase premium stability and lower costs for all Ohio
employers,” said Buehrer. “Rates are a critical part of job growth
decisions made by Ohio employers, but we’ll also continue to focus on
other aspects such as containing medical costs and helping injured
workers return to leading healthy productive lives sooner.”
BWC sets rates annually in advance of the policy year. In consultation
with Deloitte Consulting LLP, it projects the number of claims and
associated costs it anticipates employers will file and sets rates
accordingly. The rate change reflects an average reduction. Each
employer’s actual rates incorporate overall claims cost trends within
their specific industry as well as their own individual performance.
Factors in the decision to lower rates included a moderating trend of
claims frequency, as well as positive investment returns.
Read the 2011 Rate Reduction Fact Sheet
Read the Twinsburg Bulletin Story
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