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Editorial: Ohio workers' insurance rebate is proper step to reduce surplus

May. 23, 2013 @ 10:39 PM

In an age of tight budgets and widespread efforts to cut back, it's rare that a government agency gives back a portion of its revenue to those who provide it.

But that is exactly what is being proposed in Ohio. There, Gov. John Kasich and Steve Buehrer, administrator of the Ohio Bureau of Workers' Compensation, have proposed that the bureau provide $1.9 billion worth of rebates and credits to about 210,000 private and public employers who pay into the workers' compensation system.

One impetus for the plan is that the bureau is flush with cash to the tune of about $8.3 billion, a result of the agency's solid investments of the state insurance fund for injured workers, it says. Another possible motivator, although not acknowledged by Kasich and other officials, is a lawsuit by a group of 270,000 employers accusing the state of overcharging employers from 2001 to 2009. That group won an $860 million judgment against the state, which continues to contest it.

Whatever the reasons for the rebate and credit plan, returning a portion of the money is the right thing to do. Clearly, the agency does not need all that money to operate.

Under the plan, companies and government employers that pay premiums for workers' compensation coverage would receive rebates equaling 56 percent of what they were billed for their last policy year.

The bureau also wants to require employers to pay premiums upfront instead of after a coverage period. The reason, it says, is to give employers more flexible payment options and to reduce costs associated with employers who don't pay premiums on time. To accommodate that switch, the bureau proposes to give employers a credit equal to their previous six month's premium, or a combined credit of about $900 million for all employers.

The switch would lead to rate reductions of 2 percent for private employers and 4 percent for public employers.

This all seems to be good news to employers using the system, including public employers such as school systems and county, city and township governments. Lawrence County schools, villages, townships and the city of Ironton would receive a total of more than $723,000 if the plan is approved, with a third of it going to the county's school systems. For school districts, the extra money would help them recover somewhat from state cuts in support in the last two years.

The rebate plan still requires approval of the Bureau of Workers' Compensation's board, which is scheduled to act on May 30. The switch in payment procedures and the related one-time credit will require legislative approval.

Both pieces of the giveback plan should be approved, out of fairness to those who pay for this important insurance coverage.

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