BWC Panel Recommends 2.1% Base-Rate Reduction
COLUMBUS, Ohio -- Private employers in the state could see a $29 million reduction in premiums for the July 1, 2014, policy year if a proposal made Thursday is approved by BWC’s board of directors next month.
BWC proposed a 2.1% base-rate reduction for private employers at the board of directors’ actuarial committee Thursday. If approved, it would be the third year in a row that workers’ compensation insurance rates have remained steady or dropped.
“Conservative management and strong investments, coupled with favorable claim frequency, claim severity and payroll trends are allowing us to achieve our goal of setting the lowest possible rates while still maintaining the solvency of the fund,” said Steve Buehrer, BWC administrator/CEO. “I’m pleased that over the past three years we’ve been able to provide both quality care and service to Ohio’s injured workers and stable, reasonable rates for Ohio’s employers.”
Ohio’s workers’ compensation rate reductions over the last three years come at a time when the National Council on Compensation Insurance reports that nationally, states with rate increases are outnumbering states with decreases, Buehrer noted.
The proposal is for the 2014 policy year, which runs July 1 to June 30, 2014. It represents an aggregate savings of $29 million over 2013 premium collections, and would bring the three-year savings for Ohio businesses to an estimated $224 million, the bureau reported. Employers saw a 4% rate decrease in 2012 and flat rates in 2013.
Meantime, the board’s audit committee heard a proposal to maintain the bureau’s discount rate at 4%. The discount rate reflects the assumed future rate of return on investments and is factored into the bureau’s reserve levels and premium pricing. “While smart investment decisions have resulted in recent annual returns in the 10% range, prudence dictates we think in terms of investment returns over decades not years to ensure we have a strong system for generations to come,” Buehrer said. “The 4% discount rate allows us to control the overall premium costs to employers while maintaining the financial strength to cover future claims costs.”
Published by The Business Journal, Youngstown, Ohio.
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