KKSG. focus. Prospective Billing. Summer 2016

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1 Prospective Billing..1 Important True Up Reminder.1 SI WC Administrators...2 Unemployment Claims..2 Out-of-State Remedy...3 SI Assessments...4 Settlements 4 FUTA Ohio Federal Loan Update...5 Important Dates to Remember KKSG O H I O W O R K E R S C O M P E N S A T I O N A N D U N E M P L O Y M E N T A D M I N I S T R A T I O N A N D C O S T C O N T R O L Summer 2016 focus Summer is a good time to review your Workers Compensation status and closely review your loss histories to identify areas that may need a change in approach. Employers should consider the types of injuries that have been most costly and re-evaluate safety training and cost Prospective Billing Policy year 2016 will be the second year of the prospective billing. As with any change, the first year was perplexing; much of it due to the BWC s confusing invoice/ statements. The BWC wanted employers to have the premium installment invoice/statement in their possession at least 30 days before the due date. In order to accomplish this, the installment invoice/statement was mailed approximately 45 days prior to the due date. If the BWC did not receive payment within 30 days of the mailing date, another invoice/ statement was mailed. The second mailing was for the same amount, but with a different due date (BWC s 15 day grace period put in place). The second invoice/ statement was not marked as duplicate or reminder. The only indication that it was a duplicate invoice was a clause on the last page detailed information regarding the beginning balances on this invoice/statement was shown on an earlier invoice/statement. That clause was the only text on the last page and was usually ignored and the page tossed out. The multiple invoice/statements resulted in many employers making duplicate payments for the same installment period. This invoicing situation seemed to affect employers on the monthly and bi-monthly installment plan due to the frequency of invoicing on that schedule. The BWC applied any duplicate payment to the next scheduled installment and all seemed to balance out by the time the last installment was due. For policy year 2016, the BWC is decreasing the time between the mailing of the invoice/ statement and due date; anywhere from days, depending on the month. Hopefully this will create a clearer understanding of the invoices, time frames, and a smoother payment process. As always, contact your account executive with any questions regarding your premium installments. Article by Sherri Scott IMPORTANT REMINDER FOR PRIVATE EMPLOYERS BWC TRUE-UP DEADLINE COMING FAST! All private employers must report their ACTUAL payroll for the period 7/1/15 6/30/16. This is called a true-up. You can report the payroll beginning July 1, 2016, but no later than August 15, You will not receive a payroll report to do this. This must be done online at or by calling the BWC at You need to have an account set up in order to do this, or you may contact us with the payroll information and we can submit online on your behalf. The reason for this true-up is to reconcile the actual payroll for the prior policy year and reconcile any differences in premium paid. This allows the BWC to calculate your premium accurately and make premium adjustments. You will either owe additional premium or be due a refund. Any additional premium due must also be paid by the August 15, 2016 due date. Article by Christine Penwell

2 14600 Detroit Ave., # 450, 67 E. Wilson Bridge Rd, #201, SI Workers Compensation Administrators The self-insured employer s WC administrator plays a pivotal role in the success of its workers compensation program. We have outlined some of the responsibilities of the WC administrator: The WC administrator has front-line responsibility for ensuring that the employer is in compliance with the rules and regulations of the Ohio Bureau of Workers Compensation (OBWC). OBWC directs all correspondence and inquiries to the WC administrator. This includes the annual SI renewal that must be filed timely by the WC administrator (this is done electronically on BWC website), payment of the semi-annual OBWC assessments and overview of the timely and accurate filing of the SI-40 report of paid compensation (prepared and submitted by KKSG). This also includes responsibility for oversight of OBWC audits by providing requested information and being available for questions. The WC administrator is the contact for KKSG & Associates and provides notice of new injuries in a timely manner to ensure that we are able to quickly affect claim handling strategies, as well as medical treatment and return to work issues. Reporting should include information on the job duties, the initial treatment provided and the work status. Decisions regarding authorization/rejection of a claim lie with the WC administrator after review, discussion, and recommendation of your KKSG account representative. Final decisions regarding authorization of nurse case management, onsite therapy and treatment requests come from the WC ad- ministrator. The WC administrator plays an essential role in expediting the return to work of employees in order to reduce indemnity payments which directly affect claim costs. This requires reviewing restrictions and determining the employer s ability to accommodate those restrictions and then working with supervisors to achieve the return to work. If you are unable to accommodate restrictions, employers should consider MDOS (modified duty off site). The annual CMS (Medicare reporting) must be re-certified annually by the WC administrator. KKSG & Assoc. will help you maintain a quality selfinsured workers compensation program that serves your employees while also being cost effective. Please contact your SI account representative with any questions or concerns. Article by Lori Blaser and Vicki Smigelski Unemployment Claims Did You Know? An Employer could be potentially chargeable for unemployment benefits for a worker separated up to 18 months prior. When an individual files a claim for unemployment benefits, ODJFS sets a Base Period, which is the first four of the last five completed calendar quarters. They first look at this period to determine the claimant s eligibility for a claim. Once a claim is established, all employers who paid wages during the base period are potentially chargeable for a percentage of the benefits paid (in direct relation to the percentage of the base period wages paid by that employer). If you are a contributory employer (UI tax paying) and you receive a Determination of Benefits, a request for mutualization of charges should be filed. If an employee submits their resignation with notice and the employer accepts it immediately without notice, this constitutes a non-disqualifying separation. Employers should always allow employees to work out notice or provide payment of wages in lieu of notice. Otherwise, the separation is found to be non-disqualifying and the employer becomes potentially chargeable for benefits paid in the current benefit year and possibly a subsequent benefit year if the employee files a subsequent claim for which the employer paid wages within the base period. continued on page 5

3 Out-Of-State Remedy Detroit Ave., # 450, 67 E. Wilson Bridge Rd, #201, Many employers have employees who have work travel from Ohio into other states. This situation can lead to questions of coverage; which state controls the application/adjudication process and what criteria are used to determine the state of remedy. In addition, many employers hire individuals from out of state, either for temporary or permanent employment, both inside and outside of Ohio s borders. The most critical issue is that of coverage; Do I have coverage in that state if one of my Ohio employees has an injury while working in that state? A work related injury that results in a laceration is one thing; a MVA that results in a cervical fusion is something totally different. In general, Ohio s workers compensation law covers Ohio employees who are temporarily working out of state via existing extra-territorial coverage provisions. This can be a murky area of the administration of a claim. To clarify the processing, a BWC Form C-110, Employer/Employee Agreement to select Ohio as the State of Exclusive Remedy for Workers Compensation Claims, should be completed. The C-110 form is available online and should be utilized by Employers who typically have employees who travel out of state for temporary employment. The C-110 form allows the employer and employee to agree that should an injury occur while they are out of state, Ohio s Workers Compensation system will prevail and the claim will be administered as if the injury occurred within the state s borders. The C-110 form should be completed for each individual who travels outside of Ohio; one form, one employee signature. Both the employer and employee should be provided and retain a copy of the signed form. The completed and executed form needs to be sent to the BWC within 10 days of the signing date. Completed C-110 s can be faxed to BWC Policy Processing at or mailed to BWC Policy Processing Department, 30 West Spring St., 22 nd Floor, Columbus, OH The employer must report the payroll of any employee covered by a C-110, and the employer must maintain an active and current Ohio Workers Compensation policy/risk. This form is intended to clarify which state s laws will apply in the event of a conflict between states having jurisdiction over an employee and employer. Ohio BWC Form C-112 Employer/Employee Agreement to select a state other than Ohio as the State of Exclusive Remedy for Workers Compensation Claims, is a mirror of the C-110 EXCEPT that the parties agree Ohio will NOT be the state of remedy. The completion and filing process is identical to the C-110. The C-112 may be more appropriate if the employer has a permanent facility in the chosen state of remedy, has an active and current insurance policy in that state, and / or the job is expected to last for an extended period of time. In both instances, only one state can have ultimate jurisdiction and the BWC Forms C-110 and C-112 are intended to clarify which state will have jurisdiction. Neither form can supersede actual state law. Some states may require Ohio employers to obtain workers compensation coverage for any work performed there by their employees, regardless of how brief. If they find an employee is working without coverage, there could be penalties, fines and even stop work orders. Per the BWC Fact Sheet of December 2015, an Ohio employer should consider the purchase of insurance protection to cover out of state risks when: An employee is hired to perform work in another state; An employer has Ohio-based employees working in another jurisdiction for an extended period; An employee is working in a state where the law requires specific coverage for temporary exposures (other than BWC s coverage). Coverage for such exposures is available either from a State Fund, if one exists, or your insurance agent can secure this coverage from a private insurer. If a C-110 and/or a C-112 is filed with the state, it will remain in effect until the parties modify or terminate the agreement. Should you have specific questions, please contact our office. Article by Eric Haser

4 SI Assessments Below is the most current BWC SI Assessment rate chart which reflects the rates effective 7/1/16. As you will note, there has been a slight decrease in overall rate. Please make this available to those within your organization that would find it helpful for budgeting purposes, etc. Please contact KKSG with any questions. Lakewood Office Worthington Office Settlements The BWC defines a settlement as when the parties to a claim agree to a sum of money to forever resolve all past, present, or future claim issues or liabilities. Essentially, when a claim is settled, the injured worker receives a lump sum and in turn, gives up their right to receive additional compensation and/or benefits in their claim. There are two types of settlement, partial and full: A Partial settlement involves only certain conditions, such as medical or compensation. A partial settlement will keep the reserve open on a claim. A Full settlement involves all the allowed conditions and benefits which will close out the reserve on a claim. For an employer, settlement is a way of controlling claim costs which, of course, impacts premiums. When considering settlement, the goal is to settle for less than the reserve, which is the estimated future value of a claim. When a claim is settled, the claim cost is fixed and the claim will no longer reflect a reserve in the employer s experience. Some of the circumstances that would make settlement potentially attractive to an employer are as follows: The injured worker is no longer employed with the employer. The injured worker is no longer receiving medical treatment and/or compensation in a claim. There is a large reserve assessed in a claim. A percentage of permanent partial impairment application has been filed, but not yet awarded or paid. The nature of the injury is such that if it occurred again, would not be an aggravation; for example, a broken leg. There is potential for wage loss to be paid out in a claim. Settlement, when used wisely, can be a very effective tool for an employer to help control claim costs and lower premiums. If you have any questions regarding settlements, please feel free to contact your KKSG representative. Article by Mike Carey

5 Federal Unemployment Tax Act Ohio Federal Loan Update Detroit Ave., # E. Wilson Bridge Rd, #201 FUTA taxes to be paid by employers in Ohio for 2016 will likely be reduced from $168 per employee to the normal $42 per employee as the result of legislation to pay off the outstanding federal loan debt with a loan from state funds. The Ohio Senate late on May 25 th added language to a House bill to enact legislation to pay off the loan and Governor Kasich is expected to sign the legislation. The legislation provides for the payment of the outstanding balance on the federal loan (estimated to be about $250 million) in September from the state unclaimed funds account, and this amount will be repaid by employers with a surcharge collected in The cost of the surcharge to repay the loan is projected to be significantly less than the FUTA tax that would otherwise have been imposed. The legislation also enacts a provision to impose a surcharge to be paid by employers to provide funds to pay interest charges on outstanding federal loan principal. The amount of the state contribution surcharge and the interest surcharge, if any, to repay the state loan and Title XII interest will be determined in September. Legislative leaders in Ohio and the Governor s office also expressed a commitment to enact additional longer term solvency provisions later this year to better align UI tax and benefits moving forward. UWC has been working closely with the Ohio business community, ODJFS and the Ohio Legislature on solvency legislation. We will provide updates as the legislation takes effect and additional solvency measures are enacted. Douglas J. Holmes President UWC Strategic Services on Unemployment & Workers Compensation Article Re-printed with permission Unemployment Claims Did You Know? Continued from page 2 If an employee quits in lieu of discharge, they are not disqualified from unemployment benefits solely for the quit. Because the employee did not voluntarily quit and there is not continuing work available to them, this situation ends up being viewed as a discharge for the purposes of unemployment benefits. Therefore, the reason for discharge must be supported with proper documentation and reasoning within the guidelines of the employer s policies. If an employee is unable to work due to health reasons and the employer is unable to hold their job, this separation is nondisqualifying. The employee will not be able to collect unemployment benefits while a health condition exists which renders them unable to work. However, once they are able and available for work and actively seeking work, benefits are payable and the employer will be charged if they are a base period employer to the current claim as well as potentially liable for benefits in a subsequent claim where they paid base period wages. Assessment Rates For Private Employers Effective 7/1/16 Administrative Costs BWC and Industrial Commission 7/ % 7/ % Disabled Worker Relief Fund (DWRF) 7/1/15.05/$100 of Payroll 7/1/16 Zero For questions regarding unemployment claims and/or KKSG s unemployment services, please contact Jackie Komjati at jkomjati@kksg.com. Article by Jackie Komjati

6 Important Dates To Remember TAKEN FROM BWC WEBSITE OHIOBWC.GOV Private Employers June 1, 2016 through December 31, 2016 June Deadline for safety council participation requirements 30- Deadline for ISSP loss prevention activities and ISSP on-site consultation survey, SH PY 2016 first installment due July Policy year starts 01 Publishing of new rates 01 Program year starts for BWC programs: DFSP, Deductible, Individual retro, Group rating, Group retro, OCP, ISSP,.99 EM Construction Cap, EM Cap, TWB 01 PY 2015 payroll true-up notice sent (approx. date) 15 Last day to submit C-240 (settlement) EM construction cap deadline to opt out or submission of the safety management selfassessment (SH-26) 31 Safety Council enrollment deadline 31 DFSP accident analysis training deadline for 7/1/16 program start date initial year only. New supervisors have 60 days from hire date to complete 31 DFSP and ISSP online safety mgmt. self-assessment (SH-26) deadline for 7/1/16 start date August, PY 2015 payroll true-up report due 30 DFSP action plan (DFSP-5) deadline (advanced level only) for 7/1/16 program start date 31 Self-Insured assessment payment due second half September, individual-retro rating statements mailed from previous policy year (approx. date) 30 - Snapshot date for experience calculation November, Group experience rating application deadline Public Employers July 1, 2016 through December 31, Detroit Ave., # E. Wilson Bridge Rd, #201 July, Group-Retrospective-rating, Deductible, Retro rating, and OCP application deadline for 1/1/17 start date 31 Safety Council enrollment deadline August, Self-insured assessment payment due second half September, Balance of PY 2015 and PY 2016 premium due (both discounted at 50%) 30- DFSP annual report due for 1/1/16 program start date 30- EM cap and OCP requirement deadline October, Notice of estimated annual premium mailed for PY 2017 November, Deadline for deferred payment option for PY Last day for employer can change installment plan for PY DFSP, ISSP, and TWB application deadline for 1/1/17 start date December, Last day for retro settlements (close-out year for 10-year annual evaluation) 01 - Premium invoice mailed for PY Deadline for ISSP loss prevention activities and ISSP on-site consultation survey, SH-29