BWC Updates and Overview of Prospective Billing

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1 BWC Updates and Overview of Prospective Billing 1

2 Recent Rebates to Employers In 2013 and 2014, BWC returned $2 billion in rebates to Ohio employers. $1 billion in rebates to employers in summer 2013 Another $1 billion in rebates to employers in fall 2014 Increased safety grants funding $35 million in safety initiatives over next two years $1.2 billion credit for transition to prospective billing 2

3 Safety Grants o Grants to assist employers in purchasing equipment that will substantially reduce or eliminate injuries o 3-to-1 matching funds (up to $40,000) o Last year, BWC awarded $15 million in grants to 535 employers o Have you applied for your safety grant? If not what are you waiting for? 3

4 Number of Claims Program Results (18) 2004(95) 2005(108) 2006(33) 2007(96) 2008(73) 2009(45) Pre Intervention Post Intervention

5 Safety programs are working BLS Study Injury Rate for Private Employers Ohio (2.9 injuries per 100 workers) Nat l Rate (3.3 injuries per 100 workers) 5

6 Pharmacy Costs Down o 2010 compared to million fewer opiate doses ($19.9 million) Muscle relaxant costs down $3.3 million Anti-ulcer costs decreased $6.4 million Total pharmacy costs down $20.7 million 6

7 Ohio s Workers Compensation Rates Private employer rate reductions ( ) Beginning July 2015, private employer RATES WILL BE 21.4% LOWER than the rates from January $1.85 $1.74 NATIONAL MEDIAN 1 OHIO WORKERS COMP COSTS Oregon Premium Rate Ranking Study (per $100 of payroll)

8 Overview of Prospective Billing 8

9 Why Transition to Prospective Billing? o Industry standard o More flexible payment options o Decrease in base rates o Increased ability for us to detect non-compliance and fraud 9

10 Prospective Billing for Private Employers 10

11 Private Employer (PA) Transition Overview o Implement PA prospective payment effective July 1, 2015 o Will move to annual policy period o To avoid employers needing to make a double payment, BWC will provide an eight-month transition credit. This credit covers the August 2015 payroll report (for January-June) and the first two months of the 2015 policy year. o With the eight-month transition credit, employers will make their first prospective payment at the time they normally make their retrospective payment, by Aug

12 PA Ending Retrospective Billing ( ) o BWC will apply the transition credit to cover the Jan. 1, 2015 June 30, 2015, premium due, when the employer files its payroll report in August Actual payroll is critical data in our rate calculations. 12

13 Implementing PA Prospective Billing o BWC will always use the most recently reported policy year to estimate an individual employer s premium obligation. For example, BWC will use the July 1, June 30, 2014, payroll for policy year o In May of each year: Employers will receive a notice of estimated annual premium along with their annual certificate of coverage. 13

14 Notice of Estimated Annual Premium Sample: Notice of Estimated Annual Premium 14

15 Implementing PA Prospective Billing o In the first year, every employer except minimum payers will be on a bi-monthly plan, with the option of selecting a different installment plan by July 15, The first installment (covering July and August) will be paid with transition credit. BWC recommends staying with the bi-monthly default, at least in the first year. 15

16 Installment Options Annual (1); Semi-annual (2); Quarterly (4); Bi-monthly (6); Monthly (12). o Minimum payers will not receive installment options. o Minimum premium increasing to $120 due by June 30 each year. 16

17 Implementing PA Prospective Billing (First Year Only) o Employers will receive an invoice for the second installment in early August. o This invoice will be due by Aug. 31. o Premium security deposits (PSD) will post as credits to the account in this time frame. o BWC will mail invoices 30 days prior to the due date of each installment. 17

18 Payroll True-up Report o Prospective requires an annual payroll report trueup. BWC will send a reminder in July of each year. o The employer must report actual payroll for the previous policy year. Online or over the phone only If additional premium is calculated, it is also due by Aug. 15. If credit calculated, it will be released in normal process. Employers must pay online to be eligible for the Gogreen discount. 18

19 Private Employer Program Application Deadlines o Group-experience rating Monday prior to Thanksgiving o Group retro, One Claim Program, Deductible, Individual retro Last business day in January o Destination: Excellence programs Last business day in May 19

20 Prospective Billing for Public Employers 20

21 Public Employer General Overview (Transition Year) o Prospective billing begins for public employers effective Jan. 1, 2016 In 2016, payment time frames will remain the same as they are today. o In the first year only, BWC will send the Notice of Estimated Annual Premium in December In subsequent years, BWC will send it in November. 21

22 Public Employer General Overview (Transition Year) o In March, BWC will send public employers their 2015 payroll report and 2016 invoice. Both the payroll report and invoice will include a 50% credit for premium (as long as the employer is in an active status). o Employers must report all of their payroll for the 2015 calendar year and will need to pay at least 50% of the premium due as well as 50% of their estimated annual premium by May

23 Public Employers Jan. 1, 2016 to Dec. 31, 2016 o BWC will send second invoice (for the remaining premium) in August with a Sept. 1 due date (for 2015 and 2016 policy years). The invoice will include the transition credit. o The 2017 Notice of Estimated Annual Premium will be sent in November o The first invoice will then be sent in December First installment payment will be due by Dec

24 Installment Options Annual (1); Semi-annual (2); Quarterly (4); Bi-monthly (6); Monthly (12). o Minimum payers will not receive installment options. o Minimum premium increasing to $120 (plus Administrative and DWRF fees) due by Dec. 31 each year. 24

25 First 2017 Installment Billing o BWC will send invoice in December First installment payment will be due by Dec. 31. o PEC employer may defer first installment payment 25

26 Deferred Payment Option o Beginning in policy year 2017, public employers may choose to defer the first payment until April 30 of each year. Employer must elect this option on or before Nov. 15 of each year for the upcoming policy year. o This option requires the employer to pay the January-May premium by April 30 each year. o BWC will charge a deferment fee based on the established discount rate. This fee will make up for the interest BWC will not collect on the premium during this time period. 26

27 Payroll True-up Report o Prospective requires an annual payroll true-up report. BWC will send the payroll true-up notice in January of each year (beginning in 2017). o The employer must report actual payroll for the previous year. Online or over the phone only If additional premium is calculated, it is also due by Feb. 15. If credit calculated, it will be released in normal process. 27

28 Payroll True-up Report o Actual payroll is critical for rate setting. For that reason, any outstanding true-ups will result in: Immediate disqualification from rating plans and programs for that current policy year; Ineligibility to receive any rebates for the programs completed in the previous policy year; Ineligibility for rating plan or programs in the upcoming program year.

29 Lapsing Coverage o BWC will lapse any employer who does not pay their installment on time. o BWC will not lapse an employer who does not true-up. BWC will estimate the true-up by adding an additional 10% to the premium due and bill the employer. If the employer still does not report their true-up, then BWC will certify it to the Ohio Attorney General s office for collections. 29

30 Rating Plan and Program Enrollment Dates o Enrollment deadlines have changed! o Group-experience rating Last business day in May o Group retro, One Claim Program, Deductible, Individual retro Last business day in July o Destination: Excellence Last business day in November 30

31 Web Resources For more information, visit click Employers, then click the Prospective billing link o Overview document (with key dates) o Frequently asked questions, document and videos o Timelines 31

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35 Experience Period Change Private Employers o For policy year beginning 7/1/2015, BWC used data from calendar years 2010, 2011, 2012, 2013 for ratemaking purposes o Each year, the oldest year drops off and a new year is added o For policy year beginning 7/1/2016, BWC will use data from policy years 2010, 2011, 2012, 2013 for ratemaking purposes

36 Experience Period Change Public Employers o For policy year beginning , BWC used data from calendar years 2010, 2011, 2012, 2013 for ratemaking purposes. o Each year, the oldest year drops off and a new year is added. o For policy year beginning , BWC will use data from calendar years 2010, 2011, 2012, 2013 for ratemaking purposes. 36

37 Questions? 37