Steve worked as a sheet metal fabricator for 10 years with the same company. His job required him to operate numerous pieces of heavy machinery and shift a variety of materials around the shop floor. While he always took precautions and followed safety protocols, he ended up with a back injury. Steve’s back injury didn’t happen overnight, but was a gradual increase in pain, and eventually, he was diagnosed with a disc herniation. Steve required surgery on his back and physical therapy and was given a weight restriction (a limit on the amount of weight he was allowed to lift) upon returning to work three months later.
The company that Steve worked for had a workers' comp policy in place, which took care of all of the medical bills as well as his lost wages and physical therapy costs. Steve was not alone. In recent years, a total of 104,997 workers' compensation claims were filed with the Ohio Bureau of Workers' Compensation. Injuries and workplace illnesses can be extremely costly for a business, as can the resulting lawsuits if your business is not protected by a workers' compensation insurance policy.
Ohio Workers' Compensation Rules and Regulations
Ohio requires all businesses, regardless of the number of employees, to carry a workers' compensation policy. Workmans' compensation pays benefits to employees who are hurt on the job. It’s not just designed for sudden falls and accidents, it also covers injuries that develop over a long period due to the nature of the work or even workplace conditions. These policies cover medical bills and lost wages. Ohio’s workers' compensation program is a no-fault system, which means that regardless of who is at fault, employees are guaranteed benefits if they are hurt or injured on the job, and employers are exempt from expensive employee lawsuits for pain and suffering.
Ohio Workers' Compensation Basics
Who Is covered?
If you have even one employee, you must carry a workers' compensation policy to be in compliance with Ohio law. Coverage is not available for individuals who volunteer for private employers, including non-profit organizations.
What Is Covered?
Workmans' compensation insurance in Ohio covers a variety of scenarios. It protects your business and employees when they are injured suddenly, as in a fall or accident with a piece of machinery, as well as offering coverage for more long-term injuries such as back or neck injuries, and more office-related issues like repetitive stress injuries. In addition to covering employees when they are working on your premises, workers' compensation coverage also protects them when they are off-site. Employees who are traveling for work or at an after-hours networking event, or run a work-related errand, are covered by your policy if they are hurt.
Where Can I Buy It?
Ohio is slightly different from most states when it comes to workers' compensation insurance. The Buckeye State doesn’t allow private insurers to write workers' compensation policies. Instead, all workmans' compensation insurance is issued through a state fund that is run by the Ohio Bureau of Workers' Compensation (BWC). The BWC sets premium rates and pays all legitimate claims out of the fund. Injured workers who work for a state fund employer cannot receive claim payment without a Bureau or Commission order. Ohio does allow companies to self-insure, in which case they don’t pay premiums to the state fund, but they are responsible for paying all compensation and benefits directly to injured workers.
How Much Will I Pay for Workers' Comp Insurance in Ohio?
The state of Ohio sets premium rates for all workers' compensation policies. The premium rates are designed to reflect job hazards. More hazardous professions carry higher premium rates than professions with low accident rates. Keeping a clean claim and accident record can also lower an employer’s premium. The BWC uses class codes that are set by the National Council on Compensation Insurance to identify the different classes of workers. The class codes are then assigned a premium rate by the BWC. Premium rates are updated annually, so your workers' comp rates will fluctuate year to year.
For example: Ohio has very detailed rate codes, so there may be more than one code that falls into the same line of work. Class Code 5645 is assigned to Carpentry Dwellings Three Stories or Less and the base rate is $7.16. This base rate is applied to every $100 of payroll. In order to calculate the employer’s premium, the base rate is multiplied by the employer’s payroll for all Class Code 5645 employees.
Ohio Classification Code: 5645 Carpentry Three Stories or Less
Base Rate: $7.16
Employer Payroll: Example: $100,000
Premium Calculation: $7.16 per $100 or 7.16 percent of payroll.
Estimated Annual Premium: $7,160
Most employers have more than one class of employees. A plumbing company would need sales, accounting and customer service staff in addition to their plumbers. All of the employees would fall under different class codes. The different class codes and premiums would be totaled to determine the complete workers' comp premium for the business.
Ohio Workers' Compensation Discounts
The BWC does offer some discounts, but in some cases, you might not be able to stack discounts. It is best to consult with a BWC expert to get the best price.
- Drug-Free Workplace: The Drug-Free Safety Program (DFSP) offers a premium rebate to eligible employers for implementing a loss-prevention strategy to address workplace use and misuse of alcohol and other drugs, including abuse of prescription, over-the-counter and illegal drugs within the context of a holistic safety program.
- Group Association Discount: If your business is part of a professional, industry or trade association, you may qualify for a discount.
- Safety or Fall Prevention Programs: Businesses that implement and maintain safety or fall prevention programs may qualify for a discount.
Ohio Base Rate Examples
Here are just a few base rate examples for different class codes for recent years.
- 5478 Carpet installation $3.93
- 5222 Chimney Cleaning Industrial Smoke Stacks $3.09
- 5037 Painting Metal Structures Over Two Stories $19.31
- 5183 Plumbing NOC $2.74
- 5551 Roofing All Kinds $13.85
These premium rates are applied to every $100 of wages for each employee.
The BWC Offers Experience Modifiers
Experience modifiers or e-mods are applied to an employer’s premium to lower or raise their premium costs. E-mods are designed to reward safe employers and punish those with less-than-stellar safety records. E-mods work like this. If your business has a higher rate of accidents or claims than other businesses in your industry, your e-mod will be a debit and will raise your premium price. If you keep your claims and accidents lower than other businesses in your industry, you will receive a credit, lowering your premium. In Ohio, new employers are base-rated, while employers who have been in business for a few years or more are allowed to be experience-rated.
A base-rated employer will pay the base premium, which is calculated using industry-wide averages. They are not eligible for policy credits or debits based on their e-mod factor. A business new to the e-mod system starts with an e-mod of 1.00, which is a neutral rating. If you stay accident-free and claim-free, your e-mod will drop below 1.00, while accidents and claims will push your e-mod above 1.00.
The total premium for every employee is calculated by multiplying the base class rate by your experience modifier by the payroll. While the base rate for your employees is not under your control, your e-mod number is something you can influence. Safety programs can drop your accident rate, and keeping your claims under control can help drop your premium. When it comes to e-mods, a large number of small claims will have a more negative impact than one large claim.
Ready to Start Shopping for Workers' Comp Insurance?
Ohio requires all employers to purchase workers' comp insurance through the BWC. Private insurers are not allowed to compete in the state, but you can contact an agent to help get started on your workers' compensation policy and answer any of your questions.