Chapter 4123-17 General Rating for the State Insurance Fund

(A) Private employers.

(1) The annual revision of premium rates as provided in division (B) of section 4123.34 of the Revised Code shall apply to all renewals, reinstatements and new coverage effective on or after July first of each year, unless otherwise specifically provided. At the same time the bureau of workers’ compensation may adopt such changes in classification of occupations or industries with respect to their degree of hazard as will best serve to determine the risks of the different classes of occupations and will enable the establishing of appropriate premium rates measured by the hazard involved.

(2) The revised premium rates and changes in classification of occupations or industries with respect to their degree of hazard, as provided in paragraph (A)(1) of this rule, shall be adopted by rules recommended by the administrator and with the advice and consent of the bureau of workers’ compensation board of directors as provided under division (F) of section 4121.12 of the Revised Code.

(3) The rules, with the revised premium rates and changes in classification of occupations or industries (if any) attached thereto, shall be filed with the secretary of state and the legislative service commission as provided under section 111.15 of the Revised Code. The revised rates and changes in classifications (if any) shall become effective on the date indicated on the filed rule.

(B) Public employers, taxing districts.

(1) The annual revision of premium rates for the taxing districts, as provided in section 4123.39 of the Revised Code, shall apply to all renewals, reinstatements and new coverage effective on or after January first of each year, unless otherwise specifically provided.

(2) The revised premium rates as provided in paragraph (B)(1) of this rule, shall be adopted by rules recommended by the administrator and with the advice and consent of the bureau of workers’ compensation board of directors as provided under division (F) of section 4121.12 of the Revised Code.

(3) The rule with the revised premium rates shall be filed with the secretary of state and the legislative service commission as provided under section 111.15 of the Revised Code. The revised rates shall become effective on the date indicated on the filed rule.

(C) Public employers, state of Ohio, its agencies and instrumentalities.

(1) The annual revision of premium rates, including all renewals, reinstatements and new coverage for the state of Ohio, its agencies and instrumentalities, as provided in section 4123.40 of the Revised Code, for all state agencies shall be effective July first of each year.

(2) The revised premium rates as provided in paragraph (C)(1) of this rule shall be adopted by rules recommended by the administrator and with the advice and consent of the bureau of workers’ compensation board of directors as provided under division (F) of section 4121.12 of the Revised Code.

(3) The rule with the revised premium rates shall be filed with the secretary of state and the legislative service commission as provided under section 111.15 of the Revised Code. The revised rates shall become effective on the date indicated on the filed rule.

Effective: 10/16/2008

R.C. 119.032 review dates: 07/30/2008 and 10/01/2013

Promulgated Under: 119.03

Statutory Authority: 4121.12, 4121.121, 4121.13, 4121.30

Rule Amplifies: 4123.29, 4123.32, 4123.34, 4123.39, 4123.40, 4123.411

Prior Effective Dates: 8/15/77; 7/2/78; 11/26/79; 8/5/80; 9/1/93; 11/22/04

(A) The “basic or manual rate” is hereby expressed as the unit of premium per one hundred dollars of payroll for accident and disease coverage.

(B) Succeeding employers — experience.

(1) Where one legal entity, not having coverage in the most recent experience period, wholly succeeds another legal entity in the operation of a business, his or its rate shall be based on the predecessor’s experience within the most recent experience period.

(2) Where a legal entity having an established coverage or having had experience in the most recent experience period wholly succeeds one or more legal entities having established coverage or having had experience in the most recent experience period and at least one of the entities involved has a merit rating experience, the experience of all the involved entities shall be combined to establish the rate of the successor.

(3) Where a legal entity succeeds in the operation of a portion of a business of one or more legal entities having an established coverage or having had experience in the most recent experience period, the successor’s rate shall be based on the predecessor’s experience within the most recent experience period, pertaining to the portion of the business acquired by the successor. Pursuant to this rule, the bureau shall provide to the parties to the transfer of experience the necessary forms and instructions to complete the transfer of the appropriate payrolls and claims. Each party to the transfer of experience shall sign the completed forms. The bureau shall review the completed forms and if any questions arise, the bureau may conduct a premium audit on each party’s risk account.

(4) When any combination or transfer of experience is indicated under any of the provisions of this rule, the effective date of such combination or transfer shall be the beginning date of the next following payroll reporting period. In cases where an entity not having coverage wholly succeeds another entity or in cases where the date of succession is determined to be January 1 or July 1, the experience of the predecessor shall be transferred to the successor-employer effective as of the actual date of succession.

(5) For an out of state employer purchasing an existing Ohio operation, the bureau may use the out of state experience of the employer as a factor in determining the employer’s experience.

(C) Succeeding employers — risk coverage transfer.

(1) Whenever one employer succeeds another employer in the operation of a business in whole or in part, the successor shall notify the bureau of the succession. Where one employer wholly succeeds another in the operation of a business, the bureau shall transfer the predecessor’s rights and obligations under the workers’ compensation law. The successor shall be credited with any credits of the predecessor, including the advance premium security deposit of the predecessor. This paragraph shall apply where an employer wholly succeeds another employer in the operation of a business on or after September 1, 2006.

(2) Transfer of risk coverage may be retroactive to the date of succession.

(3) The successor must preserve the predecessor’s payroll records for at least the five years preceding the date of transfer succession.

(4) A legal entity may be assigned only one risk. Where a legal entity succeeds one or more risks, he or it shall be assigned a single risk designation.

R.C. 119.032 review dates: 07/30/2008 and 07/01/2013

Promulgated Under: 119.03

Statutory Authority: 4121.12, 4121.121, 4121.13, 4121.30

Rule Amplifies: 4123.32, 4123.34

Prior Effective Dates: 7/1/62; 1/10/78; 12/11/78; 11/26/79; 9/1/93; 1/27/97; 8/8/03; 1/1/04; 7/27/06

(A) An employer’s premium rates shall be the manual basic rates as provided under rules 4123-17-02, 4123-17-06, and 4123-17-34 of the Administrative Code for each of its classifications except as modified by its experience rating, and shall apply for the first two six-month periods beginning on or after the first of July for private employers and shall apply for the calendar year beginning on or after the first of January for public employer taxing districts.

(1) In calculating the manual base rate under this rule, the bureau shall exclude the experience of an employer that is no longer active if the inclusion of the inactive employer’s experience would have a significant negative impact upon the remaining active employers in a particular manual classification.

(2) The calculation of the base rate and the experience rate shall be applied to all employers reporting payroll in the manual classification, whether or not the premiums of the individual employers are reduced.

(3) Once the bureau has determined that the loss data of a specific inactive employer shall be removed from the manual classification experience, the bureau shall exclude the data of that employer from all future manual classification rate calculations. If that inactive employer reactivates its account with the Ohio state insurance fund, the bureau shall include the loss data in rate calculations for the manual classification.

(4) As used in this rule, an employer that is “no longer active” or is “inactive” is defined as an employer that satisfies all of the following criteria:

(a) The employer is assigned the policy status “bankrupt cancel,” “cancel effective date,” “final cancel,” “canceled uncollectible,” “no coverage due to claim,” or “no coverage;”

(b) The employer is not reporting payroll;

(c) The employer is not paying premiums or assessments to the Ohio state insurance fund as of the rate cut off date under either its own identity, the identity of any successor entity, or as a self-insured entity; and

(d) The employer does not employ employees for which Ohio workers’ compensation jurisdiction would apply.

(5) As used in this rule, a “significant negative impact” is defined as occurring when the inactive employers in the manual reported forty per cent or more of the payroll in the manual classification in any calendar year in the experience period and when the loss rate and loss/premium ratio of the inactive employers taken as a whole are significantly higher than those of the active employers taken as a whole as measured using the data from the prior policy year’s most current four years data. For private employer rates effective July 1, 1997, the bureau shall use the experience period data of the current policy year.

(B) An experience-rated employer’s manual classification rate modification (credit or penalty) shall be determined by multiplying its experience modification percentage (EM%) times the basic manual rate for each assigned manual classification. The amount of the modification shall then be subtracted from or added to the respective basic rate to obtain the employer’s premium rate for each classification.

(C) The experience modification percentage (EM%) shall be determined on the basis of the employer’s experience and applied to the basic rate. The experience modification percentage of the employer’s rate is determined in accordance with the following formula:

Subtract the TLL from the TML (TML – TLL), then divide by the TLL; multiply the resulting number by the C%; then add 100 to the resulting number, which will equal the EM%.

TML = Actual losses of the employer for the experience period as reduced in accordance with the maximum value.

TLL = Total limited losses = TEL x LLR

TEL = Total expected losses as determined by applying the national council of compensation insurance (NCCI) expected loss rate to the NCCI classification payroll of each NCCI classification in the employer’s experience period, as provided in appendix A to rule 4123-17-05.1 of the Administrative Code for private employers and rule 4123-17-33.1 of the Administrative Code for public employer taxing districts. The total expected losses are then used to determine credibility group, credibility, and the maximum value of a loss.

LLR = Limited loss ratio . This ratio is calculated for each credibility group within each industry group and is published as Table 1, Part B, in rule 4123-17-05 of the Administrative Code for private employers and Part B of rule 4123-17-33 of the Administrative Code for public employer taxing districts.

C% = Credibility given to an employer’s own experience. Credibility is assigned by applying the employer’s total expected losses to Table 1, Part A, in rule 4123-17-05.1 of the Administrative Code for private employers and rule 4123-17-33.1 of the Administrative Code for public employer taxing districts.

EM% = Credit or debit applied to the basic rate.

(D) The “experience period” shall be the oldest four of the latest five calendar years immediately preceding the beginning of the payroll reporting period to which the revised rates are applicable.

(E) Experience modification per cent (EM%) shall be subject to the following conditions and limitations:

(1) Actual losses include all incurred costs and shall be limited at the claim level to the amounts provided in Table 1, Part A, to rule 4123-17-05.1 of the Administrative Code for private employers and rule 4123-17-33.1 of the Administrative Code for public employer taxing districts according to the total expected losses of an employer;

(2) An employer shall not be eligible for experience modification of basic rates unless its expected losses are at least the minimum amount in the credibility table as provided in Table 1, Part A, to rule 4123-17-05.1 of the Administrative Code for private employers and rule 4123-17-33.1 of the Administrative Code for public employer taxing districts, as periodically established for the applicable rating period by rule adopted by the administrator with the advice and consent of the bureau of workers’ compensation board of directors;

(F) Commencing with the rating year beginning July 1, 1987, and all subsequent rating years, all manual classifications of the state insurance fund are subject to experience rating (i.e., merit rating).

(G) Year-to-year cap: Commencing with the rating year beginning July 1, 2009, the bureau shall cap or limit at one hundred per cent the increase to the employer’s experience modification (EM%) from the July 1, 2008 published EM%.

(1) Eligibility requirements:

(a) The employer shall be current as of June first immediately prior to the policy year to which the cap will be applied (not more than forty-five days past due) on any and all premiums, assessments, penalties or monies otherwise due to any fund administered by the bureau, including amounts due for retrospective rating.

(b) The employer cannot have cumulative lapses in workers’ compensation coverage in excess of forty days within the twelve months preceding June first immediately prior to the policy year to which the cap will be applied.

(c) The bureau will only apply the cap to a policy that has an initial published EM of 1.01 or greater. Any subsequent adjustments to the initial published EM will not affect the employer’s cap eligibility, including an employer that does not initially qualify for the cap.

(d) To be eligible for the cap in the first policy year, an employer must complete steps one, two, six, and any other two steps of the ten step business plan of rule 4123-17-70 of the Administrative Code. The employer shall submit the required documentation by March thirty-first of the year in which the cap applies. To be eligible for the cap in the second year, an employer must complete the remaining steps of the ten step business plan of rule 4123-17-70 of the Administrative Code. The employer shall submit the required documentation by March thirty-first of the second policy year. If the employer fails to comply with these requirements, the bureau will remove the cap for the policy year in which the requirements were not met.

(2) Opt-out provision:

The bureau will automatically apply the cap to an employer that meets the eligibility requirements of paragraphs (G)(1)(a) to (G)(1)(c) of this rule. If an employer wishes to not have the cap applied, the employer must notify the bureau in writing by September thirtieth of the policy year.

(3) The bureau will cap the July 1, 2009 EM% at a one hundred per cent increase from the published July 1, 2008 EM% which used the experience period data calculated as of December 31, 2007. The bureau will not adjust the July 1, 2008 published EM% for the purposes of determining the cap for the July 1,2009 rating year. The bureau will not apply a cap to any EM% decreases.

(4) Exclusion to the one hundred per cent EM% cap: Where more than one employer policy’s experience is used to develop an EM%, the resulting EM% is not subject to the one hundred per cent year to year cap.

(5) Exceptions to the exclusion:

(a) The bureau will allow the cap to be applied to a debtor in possession policy combination as a result of bankruptcy proceedings. This transaction is a change in policy number without any change in exposure. The baseline EM% of the successor will be the predecessor’s July 1, 2008 published EM%.

(b) The bureau will allow the cap to be applied to a succeeding employer policy that is base rated as of the effective date of the transfer that wholly or partially succeeds only one other policy. This exception acknowledges the change in exposure. The baseline EM% of the successor will be the predecessor’s July 1, 2008 published EM%.

Effective: 05/21/2009

Promulgated Under: 111.15

Statutory Authority: 4121.12, 4121.121, 4121.13

Rule Amplifies: 4123.29, 4123.34

Prior Effective Dates: 8/19/77, 7/2/78, 7/1/79, 7/1/80, 7/1/82, 7/1/83, 7/1/87, 7/1/88, 1/1/92, 7/1/97, 9/8/97, 7/1/02, 7/21/08, 2/7/09

(A) Where an employer that has not had prior operations in Ohio and has not had prior workers’ compensation insurance coverage in Ohio moves operations from another state into Ohio or begins operations in Ohio that are the same or similar to operations outside Ohio and is, as a result, amenable to Ohio workers’ compensation laws, the bureau may assign to that employer for purposes of individual experience rating in Ohio the individual experience modifier as was applied to that employer’s operations in the state from which the operations are being moved or with similar or same operations, not withstanding any alternative rating plans in place for that policy year in the other state. This rule does not apply to the purchase of existing Ohio operations as covered by rule 4123-17-02 of the Administrative Code. The bureau may apply the experience modifier from the other state that is effective on the date one day prior to that day on which the Ohio workers’ compensation coverage became effective. The bureau shall apply such experience modifier to the partial year ending June 30 after the start of coverage in Ohio and to the first full policy year subsequent to the start of coverage in Ohio for the determination of premium obligations to the Ohio State Insurance Fund.

(B) For the operations being moved to Ohio or started in Ohio, the employer shall provide to the bureau its most current twelve-month payroll, by manual classification. If in the opinion of the bureau that payroll is not of sufficient size to warrant experience rating as measured by the Ohio rules for experience rating, the employer may not apply its experience modifier from another state to Ohio premium obligations.

(C) The employer meeting such criteria as is established in this rule shall demonstrate that it has been an amenable employer in the other state by submitting its coverage history, its experience modifier calculation, and a list of any outstanding liabilities with the other state insurance provider. The employer shall submit a copy of its most current workers’ compensation insurance policy under which the operations outside of Ohio have been covered. Where the employer has failed to provide sufficient evidence of an actual move of operations to Ohio from another state or the start of similar or same operations in Ohio, the bureau will not use an experience modifier from another state for Ohio premium rate calculations. In the event that outstanding workers’ compensation insurance liabilities exist in another state that are unpaid more than sixty days, or in the event the information required to be submitted is not timely provided, the bureau may assign the employer a penalty rate of up to one hundred and fifty per cent of the base rate.

R.C. 119.032 review dates: 07/30/2008 and 07/01/2013

Promulgated Under: 119.03

Statutory Authority: 4121.12, 4121.121, 4121.13, 4121.30

Rule Amplifies: 4123.32, 4123.34

Prior Effective Dates: 1/1/04

The administrator of workers’ compensation, with the advice and consent of the bureau of workers’ compensation board of directors, has authority to approve the classification of occupations or industries pursuant to sections 4121.12, 4121.121, and 4123.29 of the Revised Code. The administrator hereby establishes the following classifications of occupations or industries to be effective July 1, 2008, as indicated in the attached appendix A, the classification of occupations or industries that is based upon the national council on compensation insurance as required by division (A)(1) of section 4123.29 of the Revised Code.

Appendix A

NATIONAL COUNCIL ON COMPENSATION INSURANCE (NCCI) CLASSIFICATION OF INDUSTRIES

See Appendix at http://www.registerofohio.state.oh.us/pdfs/4123/0/17/4123-17-04_FF_A_APP2_20080616_1133.pdf

Effective: 07/01/2008

Promulgated Under: 111.15

Statutory Authority: 4121.11, 4121.12, 4121.121, 4121.13, 4121.30

Rule Amplifies: 4123.29

Prior Effective Dates: 7/1/90, 7/1/91, 7/1/92, 7/1/93, 7/1/94, 7/1/95, 7/1/96, 7/1/97, 7/1/98, 7/1/99, 7/1/00, 7/1/01, 7/1/06, 7/1/07

The administrator of workers’ compensation, with the advice and consent of the bureau of workers’ compensation board of directors, has authority to approve contributions made to the state insurance fund by employers pursuant to sections 4121.121, 4123.29, and 4123.34 of the Revised Code. The administrator hereby sets the credibility table parts A and B, to be effective July 1, 2009, applicable to the payroll reporting period July 1, 2009, through June 30, 2010, for private employers as indicated in the attached appendixes A and B.

TABLE 1

PART A

NCCI Manual Classifications

See Table at http://www.registerofohio.state.oh.us/pdfs/4123/0/17/4123-17-05_FF_A_APP3_20090511_1445.pdf

TABLE 1

INDUSTRY GROUP (LLR)

See Table at http://www.registerofohio.state.oh.us/pdfs/4123/0/17/4123-17-05_FF_A_APP4_20090511_1445.pdf

Effective: 07/01/2009

Promulgated Under: 111.15

Statutory Authority: 4121.12, 4121.121

Rule Amplifies: 4123.29, 4123.34

Prior Effective Dates: 7/1/90, 7/1/91, 7/1/92, 7/1/93, 7/1/94, 7/1/95, 7/1/96, 7/1/97, 7/1/98, 7/1/99, 7/1/00, 7/1/01, 7/1/02, 7/1/03, 7/1/04, 7/1/05, 7/1/06, 7/1/07, 7/1/08

The administrator of workers’ compensation, with the advice and consent of the bureau of workers’ compensation board of directors, has authority to approve contributions made to the state insurance fund by employers pursuant to sections 4121.121, 4123.29, and 4123.34 of the Revised Code. The administrator hereby sets the credibility table part A, “credibility and maximum value of a loss,” to be effective July 1, 2009, applicable to the payroll reporting period July 1, 2009, through June 30, 2010, for private employers as indicated in the attached appendix A.

APPENDIX A

PART A

Credibility and Maximum Value of a Loss

See Appendix at http://www.registerofohio.state.oh.us/pdfs/4123/0/17/4123-17-05$1_FF_A_APP2_20090511_1658.pdf

Effective: 07/01/2009

Promulgated Under: 111.15

Statutory Authority: 4121.12, 4121.121

Rule Amplifies: 4123.29, 4123.34

Prior Effective Dates: 7/1/90, 7/1/91, 7/1/92, 7/1/93, 7/1/94, 7/1/95, 7/1/96, 7/1/97, 7/1/98, 7/1/99, 7/1/00, 7/1/01, 7/1/02, 7/1/03, 7/1/04, 7/1/05, 7/1/06, 7/1/07, 7/1/08

The administrator of workers’ compensation, with the advice and consent of the bureau of workers’ compensation board of directors, has authority to approve contributions made to the state insurance fund by employers pursuant to sections 4121.121, 4123.29, and 4123.34 of the Revised Code. The administrator hereby sets the NCCI manual classification base rates, and NCCI manual classification expected loss rates per one hundred dollar unit of payroll to be effective July 1 2009, applicable to the payroll reporting period July 1, 2009, through June 30, 2010, for private employers as indicated in the attached appendix A.

Appendix A

BUREAU OF WORKERS’ COMPENSATION

NCCI BASE RATES AND EXPECTED LOSS RATES

EFFECTIVE JULY 1, 2009

See Appendix A at http://www.registerofohio.state.oh.us/pdfs/4123/0/17/4123-17-06_FF_A_APP2_20090511_1445.pdf

Effective: 07/01/2009

Promulgated Under: 111.15

Statutory Authority: 4121.12, 4121.121

Rule Amplifies: 4123.29, 4123.34

Prior Effective Dates: 7/1/90, 7/1/91, 7/1/91 (Emer.), 7/1/92, 7/1/93, 7/1/94, 7/1/95, 7/1/96, 7/1/97, 7/1/98, 7/1/99, 7/1/00, 7/1/01, 7/1/02, 7/1/03, 7/1/04, 7/1/05, 7/1/06, 7/1/07, 7/1/08

(A) Officers of corporations.

(1) The actual remuneration of an executive officer of a corporation, such as president, vice president, secretary, treasurer, and any other executive officer enumerated in and empowered by the corporate charter or any regularly adopted bylaws of the corporation and elected or appointed and empowered by the directors to perform duties for the corporation, shall be included in the payroll report of the corporation, subject to a weekly minimum and maximum as shall be periodically established by the administrator of the bureau of workers’ compensation as provided in rule 4123-17-30 of the Administrative Code. Such remuneration shall be assigned to the classification applicable to the duties performed.

(2) Paragraph (A)(1) of this rule shall not apply to family farm corporations as defined in division (E) of section 4123.01 of the Revised Code. The remuneration of the officers of such corporation shall not be reported as part of the payroll of such employer, unless such employer elects to include as an “employee,” within Chapter 4123. of the Revised Code, any of the officers of the family farm corporation, in which case the procedure outlined in paragraph (B) of this rule shall be applicable.

(B) Partnerships, sole proprietorships, limited partnerships, an individual incorporated as a corporation with no employees, and family farm corporations.

(1) If the employer is a partnership, sole proprietorship, limited partnership, an individual incorporated as a corporation with no employees, or family farm corporation, the remuneration of the sole proprietor, member of the partnership, member of a limited partnership, individual incorporated as a corporation with no employees, or officer of the family farm corporation shall not be reported as part of the payroll of such employer, unless the sole proprietor, the partnership, the limited partnership, the individual incorporated as a corporation with no employees, or the family farm corporation elects to include any such person as an employee as provided in division (A)(2) of section 4123.01 of the Revised Code. In the event of such election, the employer shall serve written notice to the bureau of workers’ compensation on the appropriate bureau form, which notice shall name the person or persons to be covered and whose remuneration shall be included in payroll reports for premium purposes. Upon the filing of such election, sole proprietors, members of a partnership, members of a limited partnership, the individual incorporated as a corporation with no employees, and officers of a family farm corporation who sustain injuries or contract occupational diseases in the course of and arising out of employment shall be entitled to receive compensation and benefits as provided in Chapter 4123. of the Revised Code; provided, however, that the coverage for such persons shall not be effective until such notice has been filed with the bureau of workers’ compensation.

(2) Upon the filing of such election as provided in paragraph (B)(1) of this rule, the actual remuneration of a sole proprietor, member of a partnership, member of a limited partnership, an individual incorporated as a corporation with no employees, or officer of a family corporation shall be reported and included in the payroll report of the employer subject to a weekly minimum and maximum as shall be periodically established by the administrator of the bureau of workers’ compensation as provided in rule 4123-17-30 of the Administrative Code. Such remuneration shall be assigned to the classification applicable to the duties performed.

(3) Upon receipt of the form requesting coverage for the sole proprietor, member of a partnership, members of a limited partnership, an individual incorporated as a corporation with no employees, or officer of a family farm corporation, the bureau shall refer the form to the risk processing section for processing. Coverage shall remain in effect, and the employer shall be responsible for the payment of premium thereon, until the bureau receives written notice from the sole proprietor, the partnership, the limited partnership, the individual incorporated as a corporation with no employees, or the family farm corporation requesting termination of coverage, or until terminated by the bureau pursuant to paragraph (B)(4) of this rule.

(4) In the case of a sole proprietorship, partnership, limited partnership, an individual incorporated as a corporation with no employees, or family farm corporation, failure to pay premiums timely shall terminate coverage. In the case of a sole proprietorship, partnership, limited partnership, an individual incorporated as a corporation with no employees, or family farm corporation which reports payroll for its employees only, the failure to report payroll and to pay premiums thereon for any person for whom coverage is elective shall terminate coverage for any such person only. In the event of termination of coverage for non-payment of premium, a sole proprietor, a partnership, a limited partnership, an individual incorporated as a corporation with no employees, or a family farm corporation may reinstate elective coverage only upon the filing of a subsequent application form. Reinstatement of coverage shall be effective only upon receipt of the executed form and payment of premium for such elective employees, and no retroactive coverage may be granted except as provided in rule 4123-14-03 of the Administrative Code.

(C) Duly ordained, commissioned, or licensed ministers and assistant or associate ministers.

(1) Division (A)(2)(a) of section 4123.01 of the Revised Code excludes from coverage duly ordained, commissioned, or licensed ministers or assistant or associate ministers of a church in the exercise of their ministry. The remuneration for such persons shall not be reported as part of the payroll of a church employer, unless the church elects to include as an employee such persons as provided in division (A)(2) of section 4123.01 of the Revised Code. In the event of such election, the employer shall serve written notice to the bureau of workers’ compensation. Notice shall name the person or persons to be covered and whose remuneration shall be included in payroll reports for premium purposes. After proper election and notice, such persons shall be considered employees and entitled to compensation and benefits as provided in Chapter 4123. of the Revised Code; provided however, that the coverage for such persons shall not be effective until such notice has been filed with the bureau.

(2) Upon receipt of written notice or the appropriate form requesting coverage for the minister or ministers, the bureau shall refer such written notice or form to the risk processing section for processing. Coverage shall remain in effect, and the employer shall be responsible for the payment of premium thereon, until the bureau receives written notice from the church employer requesting termination of coverage, or until terminated by the bureau pursuant to paragraph (C)(3) of this rule.

(3) In the case of a church employer, failure to pay premiums timely shall terminate coverage for such employer. In the case of a church employer which reports payroll for its employees only, the failure to report payroll and to pay premiums thereon for any minister for whom coverage is elective shall terminate coverage for any such minister only. In the event of termination of coverage for nonpayment of premium, a church employer may reinstate elective coverage only upon the filing of a subsequent application form. Reinstatement of coverage shall be effective only upon the receipt of the executed form and payment of premium for such elective employees, and no retroactive coverage may be granted except as provided in rule 4123-14-03 of the Administrative Code.

R.C. 119.032 review dates: 07/30/2008 and 07/01/2013

Promulgated Under: 119.03

Statutory Authority: 4121.12, 4121.121, 4121.13, 4121.30, 4123.05

Rule Amplifies: 4123.01, 4123.24, 4123.26, 4123.34

Prior Effective Dates: 7/1/62; 12/1/78; 10/1/79; 8/22/86 (Emer.); 11/10/86; 9/1/93; 1/1/05, 7/27/06

In accordance with division (A)(1) of section 4123.29 of the Revised Code, the purpose of this rule is for the bureau of workers’ compensation to conform the classifications of industries according to the categories the national council on compensation insurance (NCCI) establishes that are applicable to employers in Ohio. This rule is based upon “Rule 1, Classification Assignment,” effective January 1, 2002, of the classification rules of the NCCI and “Rule 2G, Interchange of Labor.” The rule is used with the permission of the NCCI and is modified to conform to the requirements of the Ohio administrative code and the bureau of workers’ compensation. Where the NCCI scopes of basic manual classifications contains additional rules and information relating to the reporting of payroll or classification of industries under the manual classifications, such scopes and rules shall apply under the rules of the bureau of workers’ compensation, unless otherwise specifically excepted.

(A) Classification system.

(1) The purpose of the classification system is to group employers with similar operations into classifications so that:

(a) The assigned classification reflects the exposures common to those employers.

(b) The rate charged reflects the exposure to loss common to those employers.

(2) Subject to certain exceptions, it is the business of the employer within a state that is classified, not separate employments, occupations or operations within the business.

(B) Explanation of classifications.

Classifications are divided into two types – basic classifications and standard exception classifications.

(1) Basic classifications.

Basic classifications describe the business of an employer. This term is applied to all classifications listed in this manual, except for the standard exception classifications.

Examples of classifications that describe the business of the employer include:

(a) Business: manufacture of a product = classification: furniture manufacturing.

(b) Business: a process = classification: engraving.

(c) Business: construction or erection = classification: carpentry.

(d) Business: a mercantile business = classification: hardware store.

(e) Business: a service = classification: beauty salon.

(2) Standard exception classifications.

Standard exception classifications describe occupations that are common to many businesses. These common occupations are not included in a basic classification unless specified in the classification working. The standard exception classifications are described below.

(a) Clerical office or drafting employees NOC (code 8810); clerical office or drafting telecommuter employees (code 8871).

The above classifications are assigned when all the following conditions are met: the basic classification(s) wording applicable to the business does not include clerical office, drafting or telecommuting employees; other rules do not prohibit the assignment of code 8810 or code 8871; and the employee meets the duties, site and other requirements listed below:

(i) Duties.

Duties must be limited to one or more of the following work activities:

(a) Creation or maintenance of employer records, correspondence, computer programs, files.

(b) Drafting.

(c) Telephone duties, including telephone sales.

(d) Data entry or word processing.

(e) Copy or fax machine operations, unless the insured is in the business of making copies or faxing for the public.

(f) General office work similar in nature to the above.

(ii) Site.

(a) Code 8810 – the duties above must take place in a work station that is separated from the operative hazards of:

(i) Factories.

(ii) Stores;

(iii) Shops;

(iv) Construction sites;

(v) Warehouses;

(vi) Yards;

(vii) Any other work areas such as:

(A) Work or service areas.

(B) Areas where inventory is located.

(C) Areas where products are displayed for sale.

(D) Areas to which the purchaser customarily brings the product from another area for payment.

(b) Work stations or service areas as described in paragraph (B)(2)(a)(ii)(a) of this rule above must be physically separated by:

(i) Floors.

(ii) Walls.

(iii) Partitions.

(iv) Counters.

(v) Other physical barriers that protect the clerical employee from the operating hazards of a business.

(c) Code 8871 – the duties above must take place in a clerical work area located within the home of the clerical employee. It must be separate and distinct from the location of the employer.

(iii) Other requirements.

(a) Employees who otherwise meet the requirements for code 8810 or code 8871 will not be disqualified from assignment to this classification if they perform certain incidental duties directly related to that employee’s duties in the office. These duties include:

(i) Depositing of funds in a bank.

(ii) Pickup or delivery of mail.

(iii) Purchase of office supplies.

(iv) Entering an area exposed to the operative hazards of the business for clerical purposes, such as delivering paychecks.

(b) Employees who otherwise meet the requirements for code 8810 or code 8871 will be disqualified from assignment to this classification if their duties involve:

(i) Outside sales or outside representatives.

(ii) Direct supervision of nonclerical employees not performed in an eligible site according to paragraph (B)(2)(a)(ii)(a) above.

(iii) Physical labor.

(iv) Any work exposed to the operative hazards of the business, such as a stock or tally clerk, that is necessary, incidental, or related to any operations of the business other than a clerical office.

(b) Drivers, chauffeurs and their helpers NOC – commercial (code 7380).

This classification is assigned to employees who perform work on or in connection with a vehicle. This code includes garage employees and employees using bicycles as part of their work duties. Duties include, but are not limited to, delivering goods owned by the employer.

Code 7380 does not apply when the basic classification wording includes drivers.

(c) Salespersons, collectors or messengers – outside (code 8742).

This classification is assigned to employees who perform these duties away from the employer’s premises.

This code excludes employees who:

(i) Deliver merchandise.

(ii) Use vehicles to deliver or pick up goods, even if they collect or sell. These employees must be assigned to the classification applicable to the business for drivers.

(iii) Use public transportation or walk to deliver goods, even if they collect or sell. These employees must be assigned to the governing classification applicable to the business.

Code 8742 does not apply when the basic classification wording includes outside salespersons, collectors or messengers.

(d) Automotive salespersons (code 8748).

This classification is assigned to employees who perform these duties on or away from the employer’s premises. These employees are subject to the same rules and treatment as salespersons, collectors, or messengers – outside.

(3) General inclusions.

Some operations appear to be separate businesses but are included within all basic classifications. These are called general inclusions. These operations are not separately classified. They include the following:

(a) Restaurants or cafeterias operated by the insured for employee use. Exception: if these operations are conducted in connection with construction, erection, lumbering or mining operations, they must be separately classified.

(b) Manufacture of containers by the insured, such as bags, barrels, bottles, boxes, cans, cartons or packing cases for sole use in the operations insured by the policy.

(c) Hospitals or medical facilities operated by the insured for its employees.

(d) Maintenance or repair of the insured’s buildings or equipment by the insured’s employees.

(e) Printing or lithographing by the insured on its own products.

Some employees may perform general inclusion duties for more than one basic classification. In such cases, refer to paragraph (F) of this rule for classification treatment.

Exceptions:

A general inclusion operation must be separately classified if:

(i) The operation is conducted as a separate and distinct business of the insured (refer to paragraph (D)(3) of this rule).

(ii) The operation is specifically excluded in the wording of the basic classification.

(iii) The principal business is described by a standard exception classification.

General inclusions exception:

A bank, classified to the standard exception code 8810 – clerical office employees NOC, operates a restaurant for its employees’ use. A restaurant operated for the insured’s employees is a general inclusion and usually not separately classified. However, because this business is classified to a standard exception classification, the restaurant operation must be separately classified to the appropriate restaurant classification.

(4) General exclusions.

Some operations in a business are so unusual for the type of business described by the applicable basic classification, that they are separately classified even though the operations are not conducted as a secondary business. These are called general exclusions. They are:

(a) Aircraft operations – all operations of the flying and ground crews.

(b) New construction or alterations.

(c) Stevedoring.

(d) Sawmill operations.

(e) Employer-operated day care service.

A bank, classified to the standard exception code 8810 – clerical office employees NOC, provides a child care program for its employees. An employer-operated day care service is considered a general exclusion. This means that, unless a classification applicable to a business includes employer-operated day care services, this service is separately classified. Therefore, the child care program of the bank must be separately classified to the appropriate child care center classification(s).

(5) Governing classification.

The governing classification at a specific job or location is the classification, other than a standard exception classification, that produces the greatest amount of payroll.

If a basic classification is not applicable, the governing classification is the standard exception classification that produces the greatest amount of payroll.

The governing classification is used to determine the classification treatment of:

(a) Miscellaneous employees.

(b) Local managers.

(c) Executive officers who regularly engage in duties that are ordinarily performed by a superintendent, foreperson or worker.

Example of a governing classification: a business has the following payroll amounts assigned to the following classifications: $220,000 for code 2003 (bakery); $120,000 for code 8017 (store; retail); and $240,000 for code 8810 (clerical).

The governing code for this business is code 2003 because it is the classification code, other than the standard exception code (code 8810), with the greatest amount of payroll.

(6) Principal business.

Principal business is described by the classification, other than a standard exception or general exclusion, with the greatest amount of payroll.

If the business is best described by a standard exception operation, and there is no basic classification other than the general inclusion or exclusion operations, then the standard exception operation that produces the greatest amount of payroll for the business is considered the principal business.

(C) Classification wording.

The following list provides an explanation of classification wording usage.

(1) Classification captions and notes.

The “caption” is the heading that precedes the classification itself and is part of the classification wording.

The “note” is the phrase that follows the classification and is part of the classification wording.

The classification wording, including captions and notes, controls, restricts or explains the classification usage.

Example of a classification entry:

Store: fruit or vegetable – retail. No handling of fresh meats; “store” is the caption in the example and “no handling of fresh meats” is the note.

(2) Words and phrases.

(a) All employees, all other employees, all operations, or all operations to completion.

If a classification includes any of these phrases, no other classification can be assigned unless noted in the classification wording. This applies even if some operations or employees are at a separate location.

Examples of classifications that include “all employees,” “all other employees,” all operations,” or “all operations to completion:”

(i) Code 9186 (carnival, circus or amusement device operator – traveling – all employees & drivers); all employees must be assigned to this classification.

(ii) Code 7382 (bus co.: all other employees & drivers); all employees, other than garage employees, must be assigned to code 7382, not 8385;

(iii) Code 5402 (greenhouse erection-all operations); all work for the erection of a greenhouse must be assigned to this classification.

(iv) Code 6005 (jetty or breakwater construction-all operations to completion & drivers); all work for the construction of a jetty from the beginning to the end of the project must be assigned to this classification.

Exceptions:

The following operations within the business must be classified separately even if the classification wording includes “all employees,” “all other employees,” “all operations,” or “all operations to completion:”

(a) Construction or erection permanent yard (code 8227).

(b) Contractor – executive supervisor or construction superintendent (code 5606).

(c) Classifications describing an operation that is a standard exception unless the basic classification includes the standard exception operation.

(d) Classifications describing an operation that is a general exclusion.

(e) Any separate and distinct business (refer to paragraph (D)(3)(c) of this rule).

(b) Clerical.

Clerical means clerical office employees and drafting employees as defined in paragraph (B)(2)(a) of this rule.

Clerical includes clerical telecommuters as defined in paragraph (B)(2)(a) of this rule.

(c) Drivers.

Drivers means drivers, chauffeurs, and their helpers as defined in paragraph (B)(2)(b) of this rule.

(d) “Includes” or “&”

If the classification wording uses the terms “includes” or “&,” the operation or employees cited after those terms must not be assigned to a separate classification. This applies even though the operation or employees may be described by another classification or are at a separate location.

Examples of classification that include the terms “includes” or “&” :

(i) Code 0005 (farm: nursery employees & drivers); all drivers must be assigned to this classification.

(ii) Code 4829 (chemical mfg. NOC – all operations & drivers – includes blending or mixing); all drivers and all blending and mixing operations must be assigned to this classification.

(iii) Code 8832 (physician & clerical); all clerical employees must be included in this classification.

Note: if an insured’s operations are assigned to more than one basic classification, an employee’s payroll may be allocated among codes appropriate for each operation. This procedure is provided under paragraph (F) of this rule, interchange of labor.

(e) Local manager.

Local manager is an employee, regardless of title, who is in direct charge of the operative procedures in the yard of a business. This employee is subject to the hazards of the business. Therefore, the payroll of the local manager must be assigned to the governing classification unless another basic classification assigned to the business specifically includes this employee.

(f) “No” or “Not”.

A classification that includes a restrictive phrase beginning with “no” or “not” must not apply to any risk that conducts any operation described in the restrictive phrase.

Examples of classifications that include the terms “no” or “not” :

(i) Code 2143 (fruit juice mfg.-no bottling of carbonated liquids); this code cannot be assigned to a business that manufactures fruit juice if it also bottles carbonated liquids.

(ii) Code 4611 (drug, medicine or pharmaceutical preparation-no mfg. of ingredients); this code cannot be assigned to a business preparing drugs, medicines, or pharmaceuticals if the business also manufactures the ingredients.

(iii) Code 8106 (steel merchant-not applicable to junk dealers); this code cannot be assigned to a steel merchant if that business also deals in junk.

Exception: for mercantile, mining or construction operations, this rule applies to each job or location.

(g) “NOC”.

“NOC” means “not otherwise classified.” If the classification wording uses the term “NOC”, that classification applies only if no other classification more specifically describes the insured’s business.

Examples of classification that include the term “NOC” :

(i) Code 2688 (leather goods mfg. NOC).

(ii) Code 3022 (pipe or tube mfg. NOC & drivers).

(iii) Code 8017 (store: retail NOC).

None of the above codes will be assigned to a business if there is another code that more specifically and accurately applies to that business.

(h) “Or” or “And”.

The terms “or” or “and” mean and/or.

Examples of classifications that include the term “or” or “and” :

(i) Code 2586 (cleaning or dyeing); a business that does cleaning and/or dyeing is classified to this code.

(ii) Code 4720 (soap or synthetic detergent mfg.); a business that manufactures soap and/or synthetic detergents is classified to this code.

(iii) Code 7612 (telephone or cable TV line installation-contractors, overhead & drivers); a business that installs overhead telephone and/or cable TV lines is classified to this code.

(i) Salespersons.

Salespersons means salespersons, collectors, and messengers as defined in paragraph (B)(2)(c) of this rule.

(j) Stories in height.

Certain classification wording refers to “stories in height.” A story is defined as fifteen feet in height. It is measured from the lowest point above ground level to the highest point above ground level. Some of these classifications are:

(i) Code 5037 (painting: metal structures – over two stories).

(ii) Code 5059 (iron or steel-erection-frame structures not over two stories).

(iii) Code 5651 (carpentry-dwellings-three stories or less).

(k) To be separately rated.

Certain classification wording contains the phrase “to be separately rated.” Operations or employees referenced in those classifications must be separately classified.

Examples of classifications that include the term “to be separately rated”;

(i) Code 2111 (cannery NOC can mfg. to be separately rated as code 3220); in a business that cans foods, the manufacturing of the cans must separately classified to code 3220.

(ii) Code 4131 (mirror mfg.-mfg. of glass, frames, backs, or handles to be separately rated); in a business that makes mirrors, the work of producing glass, or fabricating frames, backs, or handles must be separately classified.

(iii) Code 8107 (machinery dealer NOC-store or yard & drivers, operations away from premises, other than demonstration or repair, to be separately rated); in a business that is a machinery dealer, work other than demonstrating or repairing the equipment that is not done at the insured’s location must be separately classified.

Rules regarding the assignment of more than one basic classification apply. Refer to paragraph (D)(3) of this rule.

(D) Classification procedures.

The purpose of the classification procedure is to assign the one basic classification that best describes the business of the employer within a state. Subject to certain exceptions described in this rule, each classification includes all the various types of labor found in a business.

It is the business that is classified, not the individual employments, occupations or operations within the business.

Certain exceptions apply and are noted below.

(1) Separate legal entities.

Classification rules apply separately to each legal entity operating in a state even if multiple entities are insured under a single policy

(2) Businesses not described by a classification.

If no basic classification clearly describes the business, the classification that most closely describes the business must be assigned. All the rules pertaining to the assigned basic classification apply to this operation.

(3) Assignment of more than one basic classification.

More than one basic classification may be assigned to an insured who meets conditions set forth in paragraphs (D)(3)(a) to (D)(3)(c) of this rule. Operation means activities, enterprises, processes, secondary businesses or undertakings.

(a) The insured’s principal business is described by a basic classification that requires certain operations or employees to be separately rated.

(b) The insured conducts one or more of the following operations:

(i) Construction or erection.

(ii) Farming.

(iii) Employee leasing, labor contracting, temporary labor services.

(iv) Mercantile business.

(c) The insured conducts more than one operation in a state.

(i) For purposes of this rule, an insured is conducting more than one operation in a state if portions of the insured’s operations in that state are not encompassed by the classification applicable to the insured’s principal business. To qualify for a separate classification, the insured’s additional operation must:

(a) Be able to exist as a separate business if the insured’s principal business in the state ceased to exist.

(b) Be located in a separate building, or on a separate floor in the same building, or on the same floor physically separated from the principal business by structural partitions. Employees engaged in the principal business must be protected from the operating hazards of the separate additional operations.

(c) Maintain proper payroll records. Refer to paragraph (F)(2) of this rule on maintenance of proper payroll records.

Example of two operations that could qualify as two separate businesses: an insured operates bowling lanes and a movie theater. These distinct operations can qualify as two separate businesses for classification purposes because:

(i) The operations of bowling lanes and movie theaters are not ordinarily conducted as one business, and therefore, are not included within each other’s scope.

(ii) Either the bowling lane (if the movie theater ceases to exist) or the movie theater (if the bowling lane cease to exist) can be expected to continue its operations.

Examples of operations that must be separately classified because they are specifically excluded in the wording of a classification considered to be the insured’s principal business:

(A) Code 0251 (irrigation works operation & drivers); code 0251 and the farm classification cannot be assigned to the same risk unless the operations described by these classifications are conducted as separate and distinct businesses. Irrigation system construction must be separately rated as code 6229.

(B) Code 5059 (iron or steel: erection-frame structures not over two stories in height); code 5040-iron or steel: erection-frame structures cannot be assigned to the same job or location that code 5059 applies to.

(C) Code 8265 (iron or steel scrap dealer & drivers); wrecking or salvaging must be separately rated. This code cannot be assigned to a risk engaged in an operation described by another classification unless the operations subject to Code 8265 are conducted as a separate and distinct business.

(ii) If the separate additional operation is not encompassed in the classification applicable to the insured’s principal business and meets all the conditions listed above in paragraph (D)(3)(c)(1) of this rule, the insured is considered to be engaged in an additional operation. If this is the case, a separate basic classification may be assigned to each operation that qualified as a separate additional operation.

(iii) If the additional operation does not meet all conditions listed above in paragraph (D)(3)(c)(1) of this rule and is not encompassed in the classification applicable to the insured’s principal business and has a rate:

(a) Lower than the insured’s principal business, assign this operation to the same classification as the insured’s principal business.

(b) Higher than or equal to the insured’s principal business, assign this operation to the classification that describes the additional operation.

(iv) Policies with more than one classification may include employees working under several classifications. Payroll assignment for these employees is subject to the interchange of labor rule. Refer to paragraph (F) of this rule.

(d) Construction or erection operations.

These operations are identified by a “circle” immediately following the code number.

Each distinct type of construction or erection operation must be assigned to the class that specifically describes the operation only if separate payroll records are maintained for each operation.

If separate payroll records are not maintained for any construction or erection operation, the highest rated classification that applies to the job or location where the operation is performed must be assigned.

If a construction or erection operation is included in the scope of another classification, a separate code must not be assigned.

(i) Insured subcontractors.

An insured subcontractor who performs a single type of work on a construction project or job just be classified based on the classification that describes the particular work involved.

Example of how to classify the work performed by an insured subcontractor:

The insured subcontractor who performs only excavation work in connection with the construction of a sewer is classified under code 6217 (excavation) rather than under code 6306 (sewer construction).

Exception: all operations in conjunction with concrete construction including making and erecting forms, placing reinforcing steel and stripping forms, when done by subcontractors, must be assigned to the appropriate concrete construction classification.

(ii) Uninsured subcontractors.

Uninsured subcontractors covered under the principal or general contractor’s policy are classified on the basis of the classification that would apply if the work were performed by the principal’s own employees.

Example of how to classify the work performed by an uninsured subcontractor:

The uninsured subcontractor who performs only excavation work, but is covered under the policy of the principal contractor who is performing the construction of a sewer, is classified under code 6306 (sewer construction).

(e) Farm operations.

These operations are identified by a “square” immediately following the code number.

A farm is defined as any parcel(s) of land used for the purpose of agriculture, horticulture, viticulture, dairying, or stock or poultry raising as a business or commercial venture.

If separate payroll records are maintained, a division of payroll is allowed for each separate and distinct type of commercial farm operation.

If payroll records of the farm classification are not clear, and separate payroll records are not maintained, the entire payroll of the farm must be segregated on the basis of proportionate acreages.

Each farm classification includes:

(i) All employees.

(ii) Drivers.

(iii) All normal repair and maintenance of buildings or equipment performed by the employees of the insured.

(iv) Operations usual and incidental to a farm, such as:

(a) Maintenance of cows, hogs or chickens for family use.

(b) A family orchard or truck garden.

(c) Hay or grain crops raised for the purpose of maintaining work animals on the farm.

(d) Outside domestic workers at the farm location.

Each farm classification excludes inside domestic workers at the farm location.

(f) Employee leasing, labor contractors and temporary labor services.

(i) Workers assigned to clients must be classified the same as direct employees of the client performing the same or similar duties.

(ii) If the client has no direct employees performing the same or similar duties, leased employees are classified as if they were direct employees of the client entity.

Example of how to classify workers assigned to clients of employee leasing companies, labor contractors, and temporary labor services:

The client is a retail store classified to code 8017:

(a) Code 8017 is applicable to the worker assigned as a cashier, just as it is applicable to the client’s employee who works as a cashier.

(b) Code 7380 is applicable to the worker assigned as a delivery truck driver, just as it is applicable to the client’s employee who drives a delivery truck.

(g) Mercantile businesses.

These operations are identified by a “diamond” immediately following the code number.

A mercantile business is any store or dealer engaged in the sale of goods or merchandise, or in the sale of services.

For mercantile businesses, the classification is assigned separately for each location.

Store operations are classified based on the principal type of merchandise sold and whether the operations are wholesale or retail. For purposes of the rule, principal means more than fifty per cent of gross receipts, excluding receipts derived from the sale of lottery tickets.

The following definitions and instructions must be used to determine the appropriate store classification.

(i) Type of merchandise sold.

If a store sells a variety of goods, each of which may be subject to a different classification, the store must be assigned to the classification that best describes the merchandise that generates more than fifty per cent of the gross receipts.

(ii) Wholesale vs. retail.

Retail applies to the sale of merchandise to the general public for personal or household consumption or use and not for resale.

Wholesale applies to the sale of merchandise for resale to others; or sale to manufacturers, builders, contractors, or others for use in their business or as raw materials.

Exception: if a store’s sales are clearly retail in nature, the appropriate retail store classification may be assigned regardless of the definition of retail above.

Examples of store sales that are clearly retail in nature:

(a) A store selling artwork in a shopping mall whose majority of sales are for artwork purchased by businesses.

(b) A store selling art supplies in a shopping mall whose majority of sales are to artists who use the materials in their business.

(iii) Combination of retail and wholesale.

A store that sells merchandise on a combined wholesale and retail basis must be assigned to the appropriate store classification depending on whether the majority of gross receipts come from wholesale or retail sales.

(4) Standard exceptions.

Standard exceptions must be separately classified unless specifically included in a classification assigned to the business.

Classifications for standard exceptions apply even if the basic classification includes phrases such as “all employees” or “all operations.”

Examples of classifications that include “all employees” or “all operations” but do not specifically refer to any standard exception employees:

(a) Code 6260 (tunneling-pneumatic-all operations); this classification does not specifically include any standard exception employees. Those employees are separately classified to codes 8810, 8871, 8742, and 7380.

(b) Code 8829 (convalescent or nursing home-all employees); this classification does not specifically include any standard exception employees. Those employees are separately classified to codes 8810, 8871, 8742, and 7380.

Examples of classifications that specifically include standard exception employees:

(i) Code 4361 (photographer-all employees & clerical, salespersons, drivers); this classification specifically includes clerical employees, salespersons, and drivers. For this type of business, those employees are not separately classified to codes 8810, 8871, 8742, and 7380.

(ii) Code 9061 (club NOC & clerical); this classification specifically includes clerical employees. For this type of business, those employees of this type of business are not eligible for classification to code 8810 or 8871.

(5) Businesses described by a standard exception classification.

If the principal business is described by a standard exception classification, the operations of all employees not included in the definition of standard exception classification must be assigned to the separate basic classification that most closely describes their operation.

Example of principal business that is described by a standard exception code: the insured is a public museum:

(a) Professional and clerical employees are assigned to code 8810.

(b) Maintenance employees are assigned to code 9101.

(c) Gift shop employees are assigned to code 8017.

(6) Classifications limited to separate businesses.

The assignment of certain classifications is limited by their notes to separate and distinct businesses because the notes may describe an operation that frequently is an integral part of a business described by another classification.

Example of assignment of a classification limited by a note:

(a) Code 4511 (analytical chemist, includes laboratory and outside employees); cannot be assigned to a risk engaged in operations described by another classification unless the operations subject to code 4511 are conducted as a separate and distinct business.

(7) Repair operations.

Risks with shop operations that involve the repair of a product for which there is no repair classification are assigned to the classification that applies to the manufacture of the product, unless this repair work is specifically referred to by another classification, footnote, or definition in the manual.

Example of repair operations that are classified to the manufacturing code:

(a) A pump repair business is assigned to code 3612 (pump mfg.). There is no separate code for pump repair.

(b) A motor repair business is assigned to code 3643 (electric power or transmission equipment mfg.). There is no separate code for motor repair.

(8) Recycling operations.

(a) The collection, sorting and handling of recyclable materials for resale to others must be assigned to the appropriate store or dealer classification, or to the classification that most closely describes the business.

(b) Risks with operations that involve the reuse of materials for the production of a new product must be assigned to the classification that applies to the manufacture of the product unless such work is specifically referred to another classification, footnote, or definition in the manual.

(E) Payroll assignment: miscellaneous employees.

(1) Miscellaneous employees who perform duties that are commonly conducted for separate operations that are subject to more than one basic classification must be assigned to the governing classification.

(2) Miscellaneous employees include general superintendents (other than construction superintendents), maintenance or power plant employees, shipping or receiving clerks, and yard workers (other than construction).

Refer to paragraph (D)(5) of this rule if the governing classification is a standard exception.

Example of classification for miscellaneous employees:

The insured has two separate operations, a machine shop (code 3632) on one floor of the building and a plastics manufacturing business (code 4452) on another floor. If it is determined that code 3632 is the governing classification, all elevator operators, porters, cleaners, superintendents, and shipping clerks serving both operations are assigned to code 3632.

(F) Payroll assignment: interchange of labor.

Some employees may perform duties directly related to more than one properly assigned classification according to paragraph (D)(3) of this rule. Their payroll may be divided among the properly assigned classifications provided that:

(1) The classifications can be properly assigned to the employer according to the rules of the classification system, and

(2) The employer maintains proper payroll records, which show the actual payroll by classification for that individual employee.

(a) Records must reflect actual time spent working within each job classification and an average hourly wage comparable to the wage rates for such employees within the employer’s industry.

(b) Estimated or percentage allocation of payroll is not permitted.

Note: if payroll records do not show the actual payroll applicable to each classification, the entire payroll of the individual employee must be assigned to the highest rated classification that represents any part of his or her work.

(3) Payroll for holiday, vacation, sick pay, overtime and all other forms of payroll that are not directly attributable to a specific classification code must be allocated to the classification code with the greatest amount of payroll applicable to the individual employee.

If none of the classification codes applicable to the employee has the greatest amount of payroll, the payroll for holiday, vacation sick pay, overtime and all other forms of payroll that are not directly attributable to a specific classification code must be allocated to the highest rated classification code applicable to the employee.

(4) Some employees qualify for division of payroll between two or more basic classification codes and also engage in operations that are classified by codes 8810, 8742, 8748 or 8871. The payroll for these standard exception operations must be allocated to the basic classification code with the largest amount of payroll applicable to that employee.

Exceptions:

Code 8810 (clerical office employees), code 8871 (clerical telecommuter employees), code 8742 (salespersons, collectors, or messengers-outside) and code 8748 (automobile salespersons) are not available for division of payroll under this rule. However, when an interchange of labor exists between code 8810 and code 8871:

(a) Code 8871 will be assigned when the employee spends more than fifty per cent of the time worked telecommuting as described by paragraph (B)(2)(a)(ii)(c) of this rule.

(b) Code 8810 will be assigned when the employee spends fifty per cent or less of the time worked telecommuting as described by paragraph (B)(2)(a)(ii)(c) of this rule.

The distribution of payroll for the employee may result in no single basic classification code that represents the largest amount of that employee’s payroll. In such cases, the payroll included in the standard exception codes (8810, 8742, 8748 and 8871) will be assigned to the highest rated classification code that represents any part of the employee’s work.

This rule does not apply to miscellaneous employees. Refer to paragraph E of this rule for these employees.

Examples of instances of interchange of labor where an employee’s payroll may be divided between two or more classifications:

(i) In a business that manufactures clocks, all employees must be assigned to either code 3385 (clock mfg.), code 8810 (clerical), code 8742 (salespersons-outside), or code 7380 (drivers). In this example, division of payroll is only allowed for employees whose work is divided between activities described by codes 3385 and 7380. Codes 8810 and 8742 are not eligible for division of payroll.

(ii) In a business that sells furniture, all employees must be assigned to either code 8044 (store: furniture & drivers), code 8810 (clerical), or code 8742 (salespersons-outside). No division of payroll is allowed in this example, since drivers are already included in the basic classifications. Codes 8810 and 8742 are not eligible for division of payroll.

(iii) In a business that manufactures paper and also further processes this paper into wallpaper, all employees must be assigned to either code 4239 (paper mfg.), code 4279 (wallpaper mfg.), code 8810 (clerical), code 8742 (salespersons-outside), or code 7380 (drivers). A division of payroll is allowed for employees whose work is divided among activities described by codes 4239, 4279, and 7380. Codes 8810 and 8742 are not eligible for division of payroll.

HISTORY: Eff 7-27-96; 7-1-97; 7-1-98; 7-1-00; 7-1-02; 7-1-03

Rule promulgated under: RC 111.15

Rule authorized by: RC 4121.12, 4121.121

Rule amplifies: RC 4123.29

Clerical office payroll shall include only the payroll of those employees whose duties are confined to keeping the books and records of the risk, and conducting correspondence, and drafting, or who are engaged wholly in office work where such books and records are kept, having no other duties of any nature in or about the risk’s premises.

HISTORY: Replaces rule 4121-7-09; Eff 7-1-62; 12-14-76; 7-24-89; 7-1-93

Rule promulgated under: RC 111.15

Rule authorized by: RC 4121.12, 4121.13, 4121.30

Rule amplifies: RC 4123.29, 4123.34

The administrator of workers’ compensation, with the advice and consent of the bureau of workers’ compensation board of directors, has authority to approve contributions made to the state insurance fund by employers pursuant to sections 4121.121, 4123.29, 4123.32, and 4123.34 of the Revised Code. Pursuant to sections 4123.29 and 4123.34 of the Revised Code, the administrator is required to keep premiums at the lowest level consistent with the maintenance of a solvent state insurance fund and of a reasonable surplus. Pursuant to section 4123.32.1 of the Revised Code, in the event there is developed as of any given rate revision date a surplus of earned premium over all losses which, in the judgment of the bureau of workers’ compensation board of directors, is larger than is necessary adequately to safeguard the solvency of the fund, the bureau of workers’ compensation board of directors may return such excess surplus to the subscriber to the fund in either the form of cash refunds or a reduction of premiums, regardless of when the premium obligation has accrued. The bureau of workers’ compensation, board of directors shall have the discretion and authority to determine whether there is an excess surplus of premium; whether to return the excess surplus to employers; the nature of the cash refunds or reduction of premiums; the employers who are subscribers to the state insurance fund who are eligible for the cash refunds or reduction of premiums; the payroll period or periods for which a reduction of premium has accrued and the premium payment for which the reduction of premium applies; the applicable date of the cash refunds or reduction of premiums; and any other issues involving cash refunds or reduction of premiums due to an excess surplus of earned premium.

Effective: 10/16/2008

R.C. 119.032 review dates: 07/30/2008 and 10/01/2013

Promulgated Under: 119.03

Statutory Authority: 4121.12, 4121.121

Rule Amplifies: 4123.29, 4123.32, 4123.34

Prior Effective Dates: 10/21/99 (Emer.); 3/30/00 (Emer.); 5/1/00; 4/28/03

Should any employee having but one hand, arm, eye, foot or leg thereafter lose any one of the foregoing members in an industrial accident or as the result of an occupational disease the same shall be merit-rated, not as a permanent total disability, but as a permanent partial disability, based upon the loss of the last member only. The remaining cost shall not be charged against the accident experience of the employer.

HISTORY: Replaces rule 4121-7-11; Eff 7-1-62; 7-1-93

Rule promulgated under: RC 111.15

Rule authorized by: RC 4121.12, 4121.13, 4121.30

Rule amplifies: RC 4123.29, 4123.34

(A) A “catastrophe” is defined as an occurrence in which two or more employees of one employer are killed or receive injuries resulting in permanent and total disability.

(B) “Catastrophe cost” is defined as the total medical, compensation, and other costs, including reserves for future compensation costs, as a direct result of a catastrophe.

(C) Catastrophe cost in excess of two hundred and fifty thousand dollars shall not be included in the experience of a classification or of an employer.

(D) Catastrophe cost in excess of the catastrophe value from part A of the merit-rated credibility table in effect for the retrospective policy year shall not be included in the annual evaluation or final settlement of that retrospective policy year.

(E) Notwithstanding the provisions of this rule, the administrator may consider any special circumstances which may affect the determination of a catastrophe loss.

HISTORY: Replaces rule 4121-7-12; Eff 8-19-77; 7-1-78; 7-1-79; 7-1-80; 7-1-81; 7-1-82; 7-1-84; 7-1-89; 7-1-90; 7-1-91

Rule promulgated under: RC 111.15

Rule authorized by: RC 4121.121, 4121.13, 4121.30

Rule amplifies: RC 4123.29, 4123.34

(A) The bureau shall ascertain the amount of premium due from an individual employers is ascertained employer by applying the basic rate for the occupation or employment in which the employer is engaged to the estimated expenditure of wages for the ensuing six months and also for an additional adjustment period of two months; that is, the advance estimate should be made for a period of eight months. Employers are required to file with the bureau of workers’ compensation an application setting forth the name and address of the employer, a description of the work done or industry conducted by the employer, the estimated average number of employees in each kind of work, the estimated total payroll for the ensuing six months, and an estimated total payroll for an additional adjustment period of two months, and such other information as may be requested by the bureau. Upon receipt of the application, the bureau will classify the applicant-employer’s status as to the type of industry or nature of the enterprise with respect to the degree of hazard involved and the bureau shall advise the applicant as to the employer’s classification, rate, and amount of first premium security deposit, calculated on a basis of an estimated expenditure or wages for eight months in advance, and at the same time the bureau will furnish the applicant with an invoice on which to remit payment of such premium security deposit. The bureau shall retain this premium security deposit as an adequate eight-month premium deposit subject to a periodic review by the bureau. The bureau shall return any unearned portion of this deposit to the employer upon cancellation of the coverage, if there is no successor, subject to audit.

(1) On the occasion of instituting coverage under this rule, the employer shall submit an application for coverage that completely provides all the information required for the bureau to establish coverage for the employer. The employer shall, at a minimum, provide the following information:

(a) Legal name of the employer;

(b) Address of the employer;

(c) Federal identification number or social security number;

(d) Business entity type (corporation, L.L.C., sole proprietorship, partnership, etc.);

(e) Information related to whether the applicant for coverage has purchased an existing business or has another associated policy;

(f) Name of the owner or corporate officer, and, where applicable for elective coverage, the name of the sole proprietor, partners, or minister;

(g) Information related to the description of the employer’s operations;

(h) Signature of the person completing the application for coverage.

(2) If the bureau receives an application for coverage that does not contain all of the information required by paragraph (A)(1) of this rule, the bureau will attempt to contact the employer to obtain the required information. If the applicant does not provide the required information, the bureau shall deny the employer’s application for coverage based upon the employer’s failure to provide all the information required by paragraph (A)(1) of this rule.

(3) An employer’s coverage shall begin at the time the bureau receives the application for coverage that completely provides all the information required for the bureau to establish coverage for the employer and the minimum security deposit required by rule 4123-17-16 if the Administrative Code. The employer’s coverage is subject to the bureau’s verification of the application for coverage. If the bureau is required to contact the employer to obtain any of the information required by paragraph (A)(1) of this rule and the bureau obtains the required information, the employer’s coverage shall remain effective from the time of the receipt of the application. If the applicant does not provide the required information, the bureau shall deny the employer’s application for coverage from the time of the application. When an applicant fails to provide the information required by paragraph (A)(1) of this rule and has employed one or more persons, the employer may be considered a non-complying employer under rule 4123-14-01 of the Administrative Code, and the bureau may recover premium and penalties from the employer under rule 4123-14-02 of the Administrative Code.

(B) New coverage shall be granted upon receipt of a written binder when deemed to be in the best interest of the risk and the bureau. Such binder shall be granted by the administrator or his designee. The binder shall be effective for the period of thirty days from the date of issuance and cannot be renewed. The premium security deposit must be billed by the bureau and paid by the risk before the thirty days expire. Payroll reports and premium charges shall coincide with the effective date of said binder.

(C) If the bureau determines, after reviewing the information submitted with the application provided for in paragraph (A) of this rule, that the employer is essentially the same employer regardless of entity type for which risk coverage previously had been provided, the bureau may transfer the prior risk coverage to the employer and the employer shall assume any outstanding obligations under the prior risk coverage. The bureau may reactivate a previously cancelled risk coverage in order to complete this transfer.

Effective: 12/20/2007

R.C. 119.032 review dates: 10/05/2007 and 12/20/2012

Promulgated Under: 119.03

Statutory Authority: 4121.12, 4121.121, 4121.13, 4121.30

Rule Amplifies: 4123.29, 4123.32, 4123.34

Prior Effective Dates: 7/1/62, 10/1/79, 9/1/93, 7/27/06

(A) In July and January of each year, the bureau will furnish private state fund employers with proper forms showing premium rates on which to report the actual wage expenditure and/or payroll in the conduct of the employer’s operations for the preceding six months’ period or portion thereof. However, if the employer elected to obtain other-states’ coverage under section 4123.292 of the Revised Code, the employer shall include on the payroll report only the remuneration for work the employees performed in Ohio and other work not covered by the other-states’ policy. If the employer employs employees who are covered under the federal Longshore and Harbor Workers’ Compensation Act, 98 Stat. 1639, 33 U.S.C. 901 et seq., the employer shall include on the payroll report only the remuneration for work the employees performed in Ohio for which the employees are eligible to receive compensation and benefits under Chapters 4121. and 4123. of the Revised Code. The employer shall complete such report with the premium calculated, and the report and remittance of the premium shall be submitted to the bureau no later than August thirty-first or the last day of February for that report’s preceding six-month period. For an employer that elected to obtain other-states’ coverage, the remuneration for work performed in states other than Ohio and covered by the other-states’ policy shall be reported to the bureau on a separate form in accordance with paragraph (E) of this rule. For an employer that employs employees who are covered under the federal Longshore and Harbor Workers’ Compensation Act, the remuneration for work performed for services for which the employees are eligible to receive compensation and benefits under the federal Longshore and Harbor Workers’ Compensation Act shall be reported to the bureau on the payroll report in accordance with paragraph (F) of this rule.

(1) Except where the administrator has announced prior to the due date of the premium payment that an employer may pay the premium in installments, the amount of the premium due is to be paid in accordance with paragraph (A) of this rule or at the expiration of the coverage for early coverage terminations.

(2) The administrator may determine for any payroll period that employers shall be permitted to pay the premium in two installments and the method of those premium installment payments. An employer electing to participate in this option shall pay one-half of the premium due by the regular due date in accordance with paragraph (A) of this rule and the balance of the premium by the invoiced date following the original due date. An employer participating in this payment option shall be considered a complying employer during the installment payments if the employer pays one-half of the premium by the regular due date, and the balance shall not be subject to penalties or interest under rule 4123-19-07 of the Administrative Code.

(B) For all counties and public employer taxing districts, by January first of each year, the bureau will furnish the county auditor of each county and the chief fiscal officer of each public employer taxing district in each county with proper forms showing premium rates on which to report the actual wage expenditure or payroll expended in the conduct of the employer’s operations for the preceding twelve calendar months. Such report shall be completed and the premium calculated on the report, and each such employer shall return the report and remit the amount of premium due to the bureau as follows:

(1) On or before May fifteenth of each year, no less than forty-five per cent of the premium due.

(2) On or before September first of each year, no less than the total premium due.

(C) The terms “payroll” and “wage expenditures” as used in the rules of this chapter of the Administrative Code shall include the entire remuneration allowed by an employer to employees in the employer’s service for the applicable period. “Remuneration” shall have the same meaning as defined in division (H) of section 4141.01 of the Revised Code as provided by the statutes of the Ohio bureau of employment services, in order that the payroll reporting requirements of the bureau of workers’ compensation shall be coordinated with the remuneration reporting requirements of the Ohio bureau of employment services, except as otherwise modified by the rules of this chapter. The definition of remuneration shall apply to all amenable employers who are required or elect to obtain Ohio workers’ compensation coverage and who pay premiums based upon payroll under Chapter 4123. of the Revised Code, and shall apply to all persons of such employers considered to be employees under the statutes or rules of the bureau of workers’ compensation, regardless of whether the employer is required to report payroll or remuneration to the Ohio bureau of employment services under Chapter 4141. of the Revised Code or whether the employer reports payroll or remuneration to the Ohio bureau of employment services for such persons considered to be employees by the bureau of workers’ compensation.

(D) In determining the reportable payroll or remuneration after July 1, 1995, for employees who customarily receive tips or gratuities, the employer shall report all actual wages paid and shall include all tips to the extent they are used to supplement the federal minimum wage requirements reportable as remuneration as defined in paragraph (C) of this rule.

(E) If an employer elects under section 4123.292 of the Revised Code to obtain other-states’ coverage from an other-states’ insurer, the employer shall, in writing, notify the bureau of the election and the identity of the insurer providing the coverage. The employer shall also provide the bureau with a copy of the other-states’ policy. On the payroll report the employer submits to the bureau in accordance with paragraph (A) of this rule, the employer shall not include remuneration for work performed outside of Ohio and covered by the other-state’s policy. On a separate form to be submitted to the bureau with the payroll report described in paragraph (A) of this rule, the employer shall report the amount of remuneration paid to its employees for work performed outside of Ohio and covered by the other-states’ policy. The bureau shall make forms available to employers for fulfilling the notification and reporting requirements of this paragraph.

(F) If an employer employs an employee covered under the federal Longshore and Harbor Workers’ Compensation Act and Chapter 4121. and Chapter 4123. of the Revised Code, the employer shall, in writing, notify the bureau of the identity of the insurer providing the federal Longshore and Harbor Workers’ Compensation Act coverage. On the payroll report the employer submits to the bureau in accordance with paragraph (A) of this rule, the employer shall include remuneration for work performed covered under the federal Longshore and Harbor Workers’ Compensation Act, regardless of whether the employer has obtained such coverage from the bureau or from private insurance. This report is for informational purposes only, and the bureau will not assign a premium rate to such payroll.

Effective: 03/23/2009

R.C. 119.032 review dates: 07/01/2013

Promulgated Under: 119.03

Statutory Authority: 4121.12, 4121.121, 4121.30

Rule Amplifies: 4123.24, 4123.26, 4123.29, 4123.32, 4123.34

Prior Effective Dates: 7/1/62; 11/26/79; 12/14/92; 7/1/93; 12/23/93 (Emer.); 3/19/94; 1/9/95; 7/24/95; 6/30/03 (Emer.); 8/8/03

(A) No employer shall knowingly misrepresent to the bureau of workers’ compensation the amount of classification of payroll upon which the premium under this chapter is based. No self-insuring employer shall knowingly misrepresent to the bureau the amount of paid compensation paid by such employer.

(B) As used in the rule, “knowingly” means that the employer had actual knowledge of the misrepresentation and was aware that the misrepresentation would cause a certain result. An employer will not be deemed to have knowingly misrepresented its payroll, its classification of payroll, or its paid compensation where the employer’s determination of how to report was:

(1) Based on the employer’s reasonable interpretation of a law, rule, or manual classification.

(2) Based on prior reporting instructions or written advice received from the bureau.

(C) Whenever the bureau of workers’ compensation finds that an employer violated division (A) of section 4123.25 of the Revised Code by knowingly misrepresenting its payroll or classification of payroll to the bureau, the administrator or the administrator’s designee may impose a penalty upon the employer as follows:

(1) For the first offense, five-hundred dollars or twenty-five percent of the amount of the difference between the premium the employer paid and the amount the employer should have paid, whichever is higher.

(2) For a second offense, up to ten times the amount of the difference between the premium the employer paid and the amount the employer should have paid.

(D) Whenever the self-insuring employers evaluation board finds that a self-insuring employer violated division (B) of section 4123.25 of the Revised Code by knowingly misrepresenting its paid compensation to the bureau, the self-insuring employers evaluation board may impose a penalty upon the employer as provided under section 4123.25 of the Revised Code.

(E) Except for a self-insuring employer, an employer may appeal a penalty imposed under this rule to the adjudicating committee under section 4123.291 of the Revised Code.

R.C. 119.032 review dates: 07/30/2008 and 07/01/2013

Promulgated Under: 119.03

Statutory Authority: 4121.12, 4121.121

Rule Amplifies: 4123.25

Prior Effective Dates: 10/14/02

(A) Pursuant to division (A)(3) of section 4123.29 of the Revised Code and paragraph (A)(2) of rule 4123-17-14 of the Administrative Code, the administrator is authorized to develop and make available to employers who are paying premiums to the state insurance fund alternative premium plans, which may include, as the administrator may determine for any payroll period, that employers shall be permitted to pay the premium in two installments.

(B) Where the administrator determines for any payroll period that employers shall be permitted to pay the premium in two installments, the only method of reporting payroll and making the initial premium installment payment for this program shall be through the bureau’s website, ohiobwc.com, using the payroll reports 50/50 payment plan service offering. All payroll for the reporting period and payment information for the initial installment shall be entered in the service offering in the same online session.

(C) An employer electing to participate in this premium payment option shall report its payroll and pay one-half of the premium due by the regular due date in accordance with paragraph (A) of rule 4123-17-14 of the Administrative Code. The balance of the premium shall be paid through the bureau’s website, ohiobwc.com, using the accounts receivable balance service offering. The balance shall be paid by the first day of June for the July first to December thirty-first reporting period, or by the first day of November for the January first to June thirtieth reporting period.

(D) An employer participating in this payment option shall be considered a complying employer during the installment payments if the employer reports payroll and pays one-half of the premium by the method prescribed in paragraph (B) of this rule by the regular due date, and the balance shall not be subject to penalties or interest under rule 4123-19-07 of the Administrative Code. If, by the regular due date, an employer does not report payroll and pay one-half of the premium by the method prescribed in paragraph (B) of this rule or does not otherwise report payroll and pay the full premium due, the employer’s coverage will be lapsed and the employer shall be subject to penalties and interest. If an employer participating in this payment option does not pay the balance of the employer’s premium by the prescribed method and by the date such balance is due, the employer’s coverage will be lapsed effective the date such balance is due.

(E) Any employer that fails to utilize the bureau’s website for this premium payment program as required in paragraphs (B) and (C) of this rule shall not be permitted to participate in the installment premium option provided in this rule.

Effective: 01/05/2009

Promulgated Under: 111.15

Statutory Authority: 4121.12, 4121.121, 4121.30

Rule Amplifies: 4123.29, 4123.34

Prior Effective Dates: 7/1/06

(A) This rule is promulgated pursuant to Chapter 4125 of the Ohio Revised Code.

(1) “Professional employer organization” or “PEO” means a sole proprietor, partnership, association, limited liability company, or corporation that enters into an agreement with one or more client employers for the purpose of coemploying all or part of the client employer’s workforce at the client employer’s work site. “Professional employer organization” or “PEO” does not include a temporary service agency.

(2) “Client employer” means a sole proprietor, partnership, association, limited liability company, or corporation that enters into a PEO agreement and is assigned shared employees by the PEO. “Client employer” does not mean an employer who is a noncomplying employer as defined in rule 4123-14-01 of the Administrative Code.

(3) “Coemploy” means the sharing of the responsibilities and liabilities of being an employer.

(4) “Shared employee” means an individual intended to be assigned to a client employer on a permanent basis, not as a temporary supplement to the client employer’s workforce, who is coemployed by a professional employer organization and a client employer pursuant to a professional employer organization agreement.

(5) “Temporary service agency” means an employer which is in the business of employing individuals for the purpose of utilizing the services of the individuals for a temporary period of time.

(6) “PEO agreement” means a written contract to coemploy employees between a professional employer organization and a client employer with a duration of not less than twelve months. The agreement is intended to be, or is, ongoing rather than temporary in nature.

(B) A PEO must perform the following functions:

(1) Provide written notice to each shared employee it assigns to a client employer of the relationship between and the responsibilities of the PEO and the client employer;

(2) Assume responsibility for payment of wages, related taxes and workers’ compensation premiums for shared employees as established within the PEO agreement. The responsibility of making the payment is not contingent on receipt of payment from client;

(3) Be responsible for maintaining both adequate and required employment-related records for employees, and for reporting such information as may be required by appropriate governmental agencies;

(4) Comply with applicable state laws regarding workers’ compensation insurance coverage.

(5) Maintain complete records, separately listing the payroll and claims of its client employers for each payroll reporting period. The payroll shall be kept in a manner that clearly identifies the appropriate manual classifications assigned to each client employer to which the payroll should be reported and the amount of premiums paid. Claims shall be separately identified according to the client employer.

(6) Maintain workers’ compensation coverage, pay all workers’ compensation premiums and manage all workers’ compensation claims, filings, and related procedures associated with a shared employee in compliance with Chapters 4121. and 4123. of the Revised Code, except that when shared employees include family farm officers, ordained ministers, sole proprietors, partners, individuals incorporated as a corporation, or corporate officers of the client employer, payroll reports shall include the entire amount of payroll associated with those persons;

(7) When the payroll of family farm officers, ordained ministers, sole proprietors, partners, individuals incorporated as a corporation or corporate officers of a client employer is reported under the PEO’s policy, it will not be subject to the payroll reporting limitations pursuant to rules 4123-17-07 and 4123-17-30 of the Administrative Code if the PEO reports wages for the client employer under the PEO policy.

(8) Within fourteen days after receiving notice from the bureau of workers’ compensation that a refund or rebate will be applied to workers’ compensation premiums, provide a copy of that notice to any client employer to whom that notice is relevant.

(C) Where a client employer enters into a PEO agreement:

(1) Each client employer must establish and maintain an individual account with the bureau.

(2) The PEO shall be considered the succeeding employer, solely for purpose of workers’ compensation experience, and shall be subject to rule 4123-17-02 of the Administrative Code, basic or manual rate, whereby all or part of the experience of the client employer is transferred to the PEO policy for rate making purposes.

(3) If the PEO agreement between a PEO and a client employer is terminated, or if the PEO declares bankruptcy or ceases operation in Ohio, the PEO must notify the bureau and each client associated with that PEO within fourteen days from the effective date of termination and identify on the UA-3, AC-18 and AC-19 forms the portion of the experience of the PEO related to the client employer shall be transferred to the client employer.

(D) A PEO shall notify the bureau within thirty days when entering into or changing the type of PEO agreement using the UA-3 PEO notification form. The PEO shall complete the form in its entirety and indicate if the claims and payroll will be reported under the PEO’s policy or the client employer’s policy and also listing the manual classifications for the client employer if payroll is to be reported under the PEO policy. If the bureau is not notified within the thirty days, the bureau will recognize the PEO agreement on the date the bureau receives the UA-3 form and the client employer shall be responsible for reporting payroll and claims under the client employer’s individual policy until the recognized effective date of the agreement.

(E) A PEO which enters into a PEO agreement with a noncomplying employer or a PEO which fails to comply with this rule shall not be considered the employer for workers’ compensation purposes. In these instances the payroll of the shared employees shall be reported by the client employer under its workers’ compensation risk number for workers’ compensation premium and claims purposes, unless prohibited by Federal law. Claims that are filed by the client employer’s shared employees shall be charged to the experience of the client employer.

(F) The bureau will not recognize a PEO agreement between a PEO and an out of state client employer where the employees of the out of state client employer does not meet the jurisdictional requirements to receive Ohio workers’ compensation benefits as provided in section 4123.54 of the Revised Code.

(G) The PEO shall register with the bureau not later than thirty days after the effective date of Chapter 4125. of the Revised Code or not later than thirty days after the formation of a PEO, whichever date occurs later. A PEO operating in this state shall register annually with the administrator of the bureau of workers’ compensation on forms provided by the administrator.

(1) The PEO shall submit an initial registration fee in the amount of one hundred dollars and a renewal fee of twenty five dollars for each PEO policy to the bureau on or prior to December 31st of each year. An increase of the fee for any year shall not exceed thirty percent.

(2) The PEO shall submit to the bureau all information as required in section 4125.05 of the Revised Code when registering with the bureau:

(a) A list of each of the professional employer organization’s client employers current as of the date of registration for purposes of initial registration or current as of the date of annual registration renewal, or within fourteen days of adding or releasing a client, that includes the client employer’s name, address, federal tax identification number, and bureau of workers’ compensation risk number;

(b) The name or names under which the professional employer organization conducts business;

(c) The address of the professional employer organization’s principal place of business and the address of each office it maintains in this state;

(d) The professional employer organization’s taxpayer or employer identification number;

(e) A list of each state in which the professional employer organization has operated in the preceding five years, and the name, corresponding with each state, under which the professional employer organization operated in each state, including any alternative names, names of predecessors, and if known, successor business entities.

(H) Except to the extent necessary for the administrator to administer the statutory duties of the administrator and for employees of the state to perform their official duties, all records, reports, client lists, and other information obtained from a PEO under paragraph (G) of this rule are confidential and shall be considered trade secrets and shall not be published or open to public inspection. “Trade secret” has the same meaning as in section 1333.61 of the Revised Code.

(I) When an employer contacts the bureau of workers’ compensation to determine whether a particular professional employer organization is registered, if the administrator has denied or revoked that professional employer organization’s registration or rescinded its status as a coemployer, and if all administrative appeals are not yet exhausted when the employer inquires, the appropriate bureau personnel shall inform the inquiring employer of the denial, revocation, or rescission and the fact that the professional employer organization has the right to appeal the administrator’s decision.

(J) Except as permitted in paragraph (K) of this rule, a PEO shall provide security in the form of a bond or letter of credit assignable to the bureau not to exceed an amount equal to the workers’ compensation premiums and assessments incurred for the two most recent payroll reporting periods pursuant to paragraph (A) of rule 4123-17-14 of the Administrative Code, prior to any discounts or dividends.

(1) The amount of security required for each PEO policy shall be evaluated annually.

(2) The security shall be provided to the bureau annually on or prior to the 31st day of December.

(3) The administrator shall determine the amount of security for a PEO policy that has not paid premiums and assessments in the two most recent payroll periods.

(4) A PEO may appeal the amount of the security required pursuant to this section in accordance with section 4123.291 of the Revised Code.

(K) As an alternative to providing security in the form of a bond or letter of credit, the administrator shall permit a PEO to make advance payments of premiums and assessments to the bureau or to submit proof of being certified by either a nationally recognized organization approved by the administrator that certifies PEOs or by a government entity approved by the administrator.

(1) A PEO electing to make advance payments of premiums and assessments shall make such payments by utilizing the bureau’s online payment system. The PEO electing to make advance payments of premiums and assessments shall report the estimated payroll and pay the premiums for the month by the fifth day of that month.

(2) A PEO electing to make advance payments of premiums and assessments who fails to report payroll and pay premiums timely pursuant to paragraph (K)(1) of this rule shall provide to the bureau security in the form of a bond or letter of credit and may not be permitted to utilize the advance payment option for a minimum of the remainder of the policy year. Subsequent failure to report payroll and pay premiums timely utilizing the advance payment option may result in forfeiture of this option and require a posting of bond or letter of credit.

(3) A PEO the administrator has recognized as being certified by a nationally recognized organization or government entity must notify the bureau within fourteen days of losing that certification.

(L) The Administrator may deny registration or revoke the registration of a PEO and rescind its status as a coemployer upon finding that the PEO has done any of the following:

(1) Obtained or attempted to obtain registration through misrepresentation, misstatement of a material fact, or fraud;

(2) Misappropriated any funds of the client employer;

(3) Used fraudulent or coercive practices to obtain or retain business or demonstrated financial irresponsibility;

(4) Failed to appear, without reasonable cause or excuse, in response to a subpoena lawfully issued by the administrator;

(5) Failed to comply with the requirements in accordance with this rule.

(M) The administrator’s decision to deny or revoke a PEO’s registration or to rescind its status as a coemployer is stayed pending the exhaustion of all administrative appeals by the PEO.

(N) Upon revocation of the registration of a PEO, each client employer associated with that PEO shall file payroll reports and pay workers’ compensation premiums directly to the administrator on its own behalf at a rate determined by the administrator based solely on the claims experience of the client employer.

R.C. 119.032 review dates: 07/30/2008 and 07/01/2013

Promulgated Under: 119.03

Statutory Authority: 4121.12, 4121.121, 4121.30, 4123.05

Rule Amplifies: 4123.01, 4123.29, 4123.32, 4123.34

Prior Effective Dates: 7/1/97; 11/22/04

(A) Each employer, on the occasion of instituting coverage under Chapter 4123. of the Revised Code, shall submit a premium security deposit.

(B) A premium security deposit shall be in an amount equal to thirty per cent of the employer’s semiannual premium obligation based on the employer’s estimated expenditure for wages for a six-month period, plus thirty per cent of the employer’s premium obligation for an additional two-month adjustment period, but in no event shall the premium security deposit collected from an employer be less than ten dollars or more than one thousand dollars.

(C) The bureau of workers’ compensation shall review the security deposit of every employer who has submitted a deposit of less than one thousand dollars. If, in the opinion of the bureau, the amount of any such employer’s deposit is less than the amount due under the law, the bureau may require the employer to submit such additional amount as it shall deem necessary, up to the maximum of one thousand dollars.

(D) The premium security deposit collected from an employer shall entitle the employer to the benefits of Chapter 4123. of the Revised Code for the remainder of the six-month payroll reporting period during which such deposit is collected, and for an additional adjustment period of two months from the close of such six-month period. Thereafter, if the employer pays the premium due at the close of any six-month period, coverage shall be extended for an additional eight-month period, beginning from the end of the six-month period for which the employer pays the premium due.

R.C. 119.032 review dates: 07/30/2008 and 07/01/2013

Promulgated Under: 119.03

Statutory Authority: 4121.12, 4121.121, 4121.13, 4121.30

Rule Amplifies: 4123.32, 4123.34, 4123.36

Prior Effective Dates: 11/26/79, 9/1/93

(A) Every employer amenable to the workers’ compensation law shall keep, preserve and maintain complete records showing in detail all expenditures for payroll reportable to Ohio and the division of such expenditures in the various divisions and classifications of the employer’s business. If an employer elects under section 4123.292 of the Revised Code to obtain other-states’ coverage, the employer shall also keep records of all payroll reported to the other-states’ insurer for work performed outside of Ohio. Both types of payroll records shall be preserved for at least five years after the respective time of the transaction upon which such records are based.

(B) All books, records, papers, and documents reflecting upon the amount and the classifications of the payroll expenditures of an employer shall be kept available for inspection at any time by the bureau of workers’ compensation or any of its assistants, agents, representatives or employees. If any private fund, county, or public employer taxing district employer fails to keep, preserve and maintain such records and other information reflecting upon payroll expenditures, or fails to make such records and information available for inspection, or fails to furnish the bureau or any of its assistants, agents, representatives or employees, full and complete information in reference to expenditures for payroll when such information is requested, the bureau may determine upon such information as is available to it the amount of premium due from the employer and its findings shall constitute prima facie evidence of the amount of premium due from the employer.

(C) The bureau shall have the right at all times by its members, deputies, referees, traveling auditors, inspectors or assistants to inspect, examine or audit any or all books, records, papers, documents and payroll of private fund, county, or public employer taxing district employers for the purpose of verifying the correctness of reports made by employers of wage expenditures as required by law and rule 4123-17-14 of the Administrative Code. The bureau shall also have the right to make adjustments as to classifications, allocation of wage expenditures to classifications, amount of wage expenditures, premium rates or amount of premium. No adjustments, however, shall be made in an employer’s account which result in reducing any amount of premium below the amount of contributions made by the employer to the fund for the periods involved, except in reference to adjustments for the semi-annual or adjustment periods ending within twenty-four months immediately prior to the beginning of the current payroll reporting period. Except as provided in rule 4123-17-28 of the Administrative Code, no adjustments shall be made in an employer’s account which result in increasing any amount of premium above the amount of contributions made by the employer to the fund for the periods involved, except in reference to adjustments for the semi-annual or adjustment periods ending within twenty-four months immediately prior to the beginning of the current payroll reporting period. The twenty-four month period shall be determined by the date when such errors affecting the reports and the premium are brought to the attention of the bureau by an employer through written application for adjustment or from the date that the bureau provides written notice to the employer of the bureau’s intent to inspect, examine, or audit the employer’s records.

(D) Experience will not be recalculated unless there is an adjustment of an employer’s account due to a reclassification of operations. In such event the experience will be recalculated for the same period as the adjustment of the employer’s account.

(E) Where the bureau has assigned two or more classifications for an employer’s operations, the employer shall keep an appropriate record showing a correct and verifiable segregation of all payroll into such classifications. If it is found that the employer has failed to keep such record, the part of the payroll which cannot be reasonably determined by the bureau as belonging to any other classification shall be placed by the bureau under the assigned classification having the highest rate, and the employer will be assessed premium accordingly. To such payroll as is expended after the employer has been notified of these requirements and which is not segregated as herein provided, the highest rate of the employer’s assigned classifications shall be applied.

Effective: 01/05/2009

Promulgated Under: 111.15

Statutory Authority: 4121.12, 4121.121, 4121.30

Rule Amplifies: 4123.24, 4123.26, 4123.29, 4123.34, 4123.41

Prior Effective Dates: 7/1/62, 12/14/76, 12/11/92, 1/1/02, 10/1/05, 7/1/06

(A) Any private fund employer that is in compliance with section 4123.35 of the Revised Code, except those that are self-insuring, may be eligible for a discount on premium rates. The premium discount rate shall be determined by the bureau of workers’ compensation and shall apply only to the prospective premium rate of the qualified employer.

(1) In order to qualify for a premium discount rate, the eligible employer must meet the following criteria:

(a) The employer must not have incurred a compensable injury for one calendar year or more; and

(b) The employer shall maintain an employee safety committee or similar organization or make periodic inspections of the work place. If a discount is granted and a claim for a compensable injury or disease subsequently is filed for the calendar year n which the discount is based, the employer’s premium rate shall be increased by the amount of the discounted premium rate.

(2) For the purpose of this rule, “compensable injury” includes all claims whether for injury, occupational disease, or death, in which payment has been made for either compensation or medical benefits pursuant to sections 4123.56 to 4123.59 or section 4123.66 of the Revised Code.

(3) The bureau of workers’ compensation, with the cooperation of the division of safety and hygiene, may investigate employers for compliance with the criteria of this rule. To assist in this matter, the division of safety and hygiene shall maintain a list of employers that have established employee safety committees or similar organizations or make periodic safety inspections of the work place.

(B) Any county or public employer taxing district employer may be eligible for a discount on premium rates.

(1) In order to qualify for a premium discount, the county or public employer taxing district employer must pay its total proper contribution for premiums due to the bureau on or before May fifteenth of each year.

(2) The discount rate will be based upon the three month treasury bill rate as of the auction immediately after December first of the previous year, applied at an annualized rate to the portion of premium paid in advance.

(3) The administrator may provide the discount through a refund or an offset against future contributions due.

R.C. 119.032 review dates: 07/30/2008 and 07/01/2013

Promulgated Under: 119.03

Statutory Authority: 4121.11, 4121.12, 4121.121, 4121.13, 4121.30, 4123.05

Rule Amplifies: 4123.34, 4123.41

Prior Effective Dates: 8/22/86 (Emer.), 10/17/86 (Emer.), 1/10/87, 12/14/92, 11/19/93

(A) The administrator of workers’ compensation, with the advice and consent of the bureau of workers’ compensation board of directors, has authority to approve contributions made to the state insurance fund by employers pursuant to sections 4121.121, 4123.29, and 4123.34 of the Revised Code. Pursuant to section 4123.29 of the Revised Code, the administrator, with the advice and consent of the bureau of workers’ compensation board of directors, may grant a discount as the administrator determines to an employer that makes its semiannual premium payment at least one month prior to the last day on which the payment may be made without penalty.

(B) Employer eligibility for early payment discount.

(1) The early payment discount shall be available to any private state fund employer with active coverage. An employer reporting zero payroll is not eligible for the discount.

(2) The employer may participate in any other alternative rating program offered by the bureau.

(3) The early payment discount is available only for an employer that reports its payroll and pays its premiums over the internet through electronic submission on the bureau’s website.

(C) Operation of the early payment discount.

(1) An employer participating in the early payment discount program may submit to the bureau the employer’s payroll, actual or estimated, with payment, at any time during the current reporting period. The actual discount will depend upon the time of payment as provided in paragraph (D) of this rule.

(2) For the early payment discount, the bureau will accept the employer’s payment without the employer’s payroll, but will not accept the employer’s payroll without the employer’s premium payment.

(3) The employer shall report the complete payroll for the payroll reporting period by the normal due date for the premium payment. The employer’s coverage will lapse if the employer does not file and pay the full amount due as required by the completed payroll report for the reporting period.

(a) The bureau will not refund an overpayment of early premium payments made by the employer until the employer filed the completed payroll report for the reporting period.

(b) Standard penalties will apply to any net balance due from the employer, i.e., total premium due less discounts, dividends, and early payments made.

(D) Premium discount for the early payment discount.

(1) The bureau will determine the discount rate for each calendar year based on the prior year’s actuarial audit’s discount rate. The amount of the discount for early payment will be incremental and will decline based upon the date the employer makes the payment to the bureau.

(2) An employer is eligible for the appropriate early payment discount if the employer reports the payroll and pays the complete premium for the payroll reporting period by the first month of the two month grace period for payment; that is, by the end of January for payments due by the end of February, or by the end of July for payments due by the end of August.

(3) The early payment discount shall apply to the total blended premium paid by the employer after all other discounts, dividends, etc.

(4) For an employer participating in retrospective rating, the early payment discount shall be applied only to the minimum premium as defined in rule 4123-17-44 of the Administrative Code.

Effective: 07/21/2008

Promulgated Under: 111.15

Statutory Authority: 4121.12, 4121.121

Rule Amplifies: 4123.29, 4123.34

Prior Effective Dates: 4/10/01

The administrator of workers’ compensation, with the advice and consent of the bureau of workers’ compensation board of directors, has authority to establish contributions made to the marine industry fund by employers pursuant to sections 4121.121 and 4131.14 of the Revised Code. The administrator hereby sets the premium rates per one hundred dollar unit of payroll to be effective July 1, 2009 as indicated in appendix A to this rule.

Appendix A

Rates are for each $100 unit of payroll

NCCI Manual    Code Manual Rate

6802          $13.54

6847           $25.97

7310           $12.56

7325           $34.03

7330           $13.54

8707           $34.03

8708           $8.65

NOTE: Manual descriptions for the classifications are in the NCCI Classification section of this publication.

Ohio’s underwriting coverage of these manuals is subject to approval by the Federal Government.

Effective: 07/01/2009

Promulgated Under: 111.15

Statutory Authority: 4121.12, 4121.121

Rule Amplifies: 4123.34, 4131.14

Prior Effective Dates: 7/1/90, 7/1/97, 7/1/05, 7/1/07, 7/1/08

The administrator of workers’ compensation, with the advice and consent of the workers’ compensation oversight commission, has authority to establish contributions made to the coal-workers pneumoconiosis fund by employers pursuant to sections 4121.121 and 4131.04 of the Revised Code. The administrator hereby sets the premium rates per one hundred dollar unit of payroll to be effective July 1, 2001, as indicated in attached appendix A.

Appendix A

Manual Rate

1112 $3.70

1115 $1.07

1116 $0.83

Note: the above premium rates shall only apply to employers who newly subscribe to the coal-workers pneumoconiosis fund on or after May 15, 1999. The bureau shall institute a moratorium on premium collections from all employers who were subscribers to the coal-workers pneumoconiosis fund prior to May 15, 1999, and who remain subscribers to the fund.

HISTORY: Eff 7-1-90; 7-1-91; 7-1-92; 7-1-97; 7-1-98; 7-1-01

Rule promulgated under: RC 111.15

Rule authorized by: RC 4121.121

Rule amplifies: RC 4123.34, 4131.04

Where traveling salesmen or other employees, who travel in the course of their employment, are required to pay their traveling expenses out of their remuneration, the employer, in submitting payroll reports of the earnings of such employees, may deduct from the remuneration an amount representing actual traveling expenses, not exceeding, however, an amount equal to one-third of the remuneration, provided said employer maintains complete detailed records disclosing said expenditures.

HISTORY: Replaces rule 4121-7-22; Eff 7-1-62; 7-1-93

Rule promulgated under: RC 111.15

Rule authorized by: RC 4121.12, 4121.13, 4121.30

Rule amplifies: RC 4123.29, 4123.34

(A) The entire remuneration of employees, whose contracts of hire have been consummated within the borders of Ohio, whose employment involves activities both within and without the borders of Ohio, and where the supervising office of the employer is located in Ohio, shall be included in the payroll report. However, if the employer elects to obtain other-states’ coverage under section 4123.292 of the Revised Code, the employer shall include in the payroll report only the remuneration for work the employees perform in Ohio and other work not covered by the other-states’ policy.

(B) The remuneration of employees of other than Ohio employers, who have entered into a contract of employment outside of Ohio to perform transitory services in interstate commerce only, both within and outside of the boundaries of Ohio, shall not be included in the payroll report.

(C) The bureau of workers’ compensation respects the extraterritorial right of the workers’ compensation insurance coverage of an out-of-state employer for its regular employees who are residents of a state other than Ohio while performing work in the state of Ohio for a temporary period not to exceed ninety days. However, if the laws of the state of coverage do not provide this same exemption to Ohio employers and their employees working temporarily in that state, the out of state employer must obtain Ohio coverage and report to the bureau the remuneration of its employees for work performed in Ohio.

(D) Employees hired to work specifically in Ohio must be reported for workers’ compensation insurance under the Ohio fund, regardless of where the contracts of hire were entered.

(E) Where there is possibility of conflict with respect to the application of the workers’ compensation law because the contract of employment is entered into and all or some portion of the work is or is to be performed in different states, the employer and his employees may mutually agree to be bound by the workers’ compensation laws of the state of Ohio by executing form C-110, or mutually agree to be bound by the workers’ compensation law of some other state by executing form C-112, such forms to be obtained from and filed with the bureau of workers’ compensation within ten days after execution.

Effective: 01/05/2009

Promulgated Under: 111.15

Statutory Authority: 4121.12, 4121.121, 4121.13, 4121.30

Rule Amplifies: 4123.29, 4123.34

Prior Effective Dates: 7/1/62; 7/1/93

The moneys given by employers to employees while engaged in active military or naval service of the United States of America shall be excluded from the payroll reports which said employers are required to submit to the bureau of workers’ compensation for premium purposes unless said employees are also required to render services to said employers while thus engaged in active military or naval service.

HISTORY: (former 4121-7-25); Eff 7-1-62; 7-1-93

Rule promulgated under: RC 111.15

Rule authorized by: RC 4121.12, 4121.13, 4121.30

Rule amplifies: RC 4123.29, 4123.34

The administrator of workers’ compensation, with the advice and consent of the bureau of workers’ compensation board of directors, has authority to calculate contributions to the administrative cost fund by employers pursuant to sections 4121.121, 4123.341, and 4123.342 of the Revised Code. The administrator hereby establishes that in cases where an employer reports no payroll or calculates total premium due of less than the minimum administrative charge for a payroll reporting period the employer shall pay a minimum annual administrative charge at a rate of fifty dollars each six months or one hundred dollars annually.

Effective: 07/21/2008

Promulgated Under: 111.15

Statutory Authority: 4121.12, 4121.121

Rule Amplifies: 4123.341, 4123.342

Prior Effective Dates: 7/1/62, 2/14/76, 1/1/92, 7/1/96, 7/1/97, 7/1/06

A protest of an employer’s experience can be submitted in writing, or by written electronic means, such as by fax or e-mail. Only the employer or a representative with a permanent authorization from that employer can file a protest. A protest shall be considered on its merits only if the protest is timely received by the bureau of workers’ compensation. A protest is timely filed if the date of receipt by the bureau is within two years of the initial effective date of the basic rate(s) on which the protested experience is predicated.

Effective: 10/16/2008

R.C. 119.032 review dates: 07/30/2008 and 10/01/2013

Promulgated Under: 119.03

Statutory Authority: 4121.12, 4121.121, 4121.30

Rule Amplifies: 4123.29, 4123.32, 4123.34

Prior Effective Dates: 11/26/79, 12/14/92

(A) Whenever the bureau of workers’ compensation detects an inaccuracy in the recording or processing of data, records, payroll, claims, or other pertinent items affecting the risk’s status, merit-rated modification or premium, such discrepancy shall be corrected. This correction shall be accomplished regardless of whether this entails increasing or decreasing the risk’s merit-rated modification or premium rate. The risk or its representative will be advised of any correction and the effect thereof made under the authority of this rule.

(B) Any correction made pursuant to the provisions of paragraph (A) of this rule shall be applied to the current rating year, the immediately preceding rating year, and to all subsequent rating years as of the date on which the error was discovered by the bureau or reported to the bureau, whichever date is earlier, except in matters involving handicap reimbursement and service-connected disabilities and cases covered by rules 4123-17-02, 4123-17-17, and 4123-19-03 of the Administrative Code. In cases where two or more employers may be affected by such correction, the same period of adjustment will be applied to all affected employers.

(C) Notwithstanding paragraphs (A) and (B) of this rule or paragraphs (C) and (D) of rule 4123-17-17 of the Administrative Code, the bureau may adjust the employer’s account or experience for a period in excess of twenty-four months immediately prior to the beginning of the current payroll reporting period for the following circumstances:

(1) If the bureau determines that the employer misrepresented payroll or failed to submit payroll for any period, the bureau may adjust the employer’s account or experience resulting in an increase in any amount of premium above the amount of contributions made by the employer to the fund for the entire period the employer misrepresented payroll or the entire period the employer failed to submit payroll, regardless of when the misrepresentation of payroll or failure to submit payroll occurred.

(2) If the bureau excluded any claim costs from the employer’s account or experience because the costs were subject to an appeal to court under section 4123.512 of the Revised Code and by a final adjudication it is determined that the claim costs shall be charged to the claim, the bureau may adjust the employer’s account or experience resulting in an increase in any amount of premium above the amount of contributions made by the employer to the fund for the entire period affected by the addition of the claim costs to the employer’s account or experience.

R.C. 119.032 review dates: 07/30/2008 and 07/01/2013

Promulgated Under: 119.03

Statutory Authority: 4121.12, 4121.121, 4121.30

Rule Amplifies: 4123.29, 4123.32, 4123.34, 4123.38, 4123.39

Prior Effective Dates: 11/26/79, 12/14/92, 11/19/93, 10/1/05

(A) State fund employers.

(1) In order to make disabled workers’ relief fund (“DWRF”) payments to claimants having dates of injury or disability prior to January 1, 1987, assessments shall be levied in the following manner for so long as payments to such claimants are required:

(a) Private state fund employers: eight cents per one-hundred-dollar unit of payroll, effective July 1, 2008;

(b) Public employer taxing districts: six cents per one-hundred-dollar unit of payroll, effective January 1, 2007;

(c) Public employer state agency: five cents per one-hundred-dollar unit of payroll, effective July 1, 2007.

These assessments shall be billed at the same time state insurance fund premiums are billed and payments shall be credited to the disabled workers’ relief fund.

(2) In order to make DWRF payments to claimants having dates of injury on or after January 1, 1987, assessments shall be levied in the following manner for so long as payments to such claimants are required:

(a) Private state fund employers: one-tenth of one per cent of premium, computed at basic rate, effective July 1, 1993;

(b) Public employer taxing districts: one-tenth of one per cent of premium, computed at basic rate, effective January 1, 1993;

(c) Public employer state agency: one-tenth of one per cent of premium, computed at basic rate, effective July 1, 1993;

These assessments shall be billed at the same time state insurance fund premiums are billed and payments shall be credited to the disabled workers’ relief fund.

(B) Self-insuring employers.

(1) Each self-insuring employer shall reimburse the bureau for DWRF payments made in claims in which it is the employer of record, without regard to the date the employer was granted the privilege to pay compensation directly, for all DWRF payments made on or after August 22, 1986. Upon default and a finding of noncompliance by the administrator of workers’ compensation, reimbursement shall be made from the self-insuring employers’ guaranty fund.

(2) Self-insuring employers shall be billed on a semi-annual basis for the DWRF payments made pursuant to this rule.

Effective: 07/01/2008

Promulgated Under: 111.15

Statutory Authority: 4121.11, 4121.12, 4121.121, 4121.13, 4121.30, 4123.05

Rule Amplifies: 4123.411, 4123.413, 4123.414

Prior Effective Dates: 7/1/80, 7/1/81, 8/22/86 (Emer.), 11/10/86, 1/1/91, 7/1/93, 7/1/94, 7/1/04, 7/1/05, 7/1/07

The administrator of workers’ compensation, with the advice and consent of the workers’ compensation oversight commission, has authority to establish the total payroll reportable by employers pursuant to sections 4121.12 and 4123.29 of the Revised Code. The administrator hereby sets the total payroll limitations for executive officers of corporations, sole proprietors, members of partnerships, an individual incorporated as a corporation, and officers of family farm corporations with no employees, as provided in this rule.

(A) For executive officers of corporations, the payroll reportable shall be the actual payroll received by the executive officers of the corporation, but not less than an average weekly wage equal to fifty per cent of the statewide average weekly wage as defined in division (C) of section 4123.62 of the Revised Code, but shall not exceed an average weekly wage equal to one hundred fifty per cent of the statewide average weekly wage as defined in division (C) of section 4123.62 of the Revised Code. The minimum reportable payroll for executive officers of corporations shall apply only to active executive officers of corporations. As used in this rule, “active executive officer” means an officer engaged in the decision making and day to day operations of the corporation.

(B) For sole proprietors, members of partnerships, an individual incorporated as a corporation with no employees, and officers of family farm corporations who elect to include themselves as employees under the workers’ compensation act and comply with rule 4123-17-07 of the Administrative Code, the payroll reportable shall be the actual payroll received by the sole proprietor, member of partnership, an individual incorporated as a corporation, and officer of a family farm corporation, but not less than an average weekly wage equal to fifty per cent of the statewide average weekly wage as defined in division (C) of section 4123.62 of the Revised Code, nor more than an average weekly wage equal to one hundred fifty per cent of the statewide average weekly wage as defined in division (C) of section 4123.62 of the Revised Code.

(C) This rule shall be effective for all payroll reportable on or after July 1, 2006.

Effective: 07/01/2006

Promulgated Under: 111.15

Statutory Authority: 4121.12, 4121.13, 4121.30, 4123.05

Rule Amplifies: 4123.01, 4123.24, 4123.26, 4123.34

Prior Effective Dates: 7/1/93; 7/1/94; 1/1/05

(A) Pursuant to section 4121.48 of the Revised Code, the administrator of workers’ compensation shall use the long-term care loan fund program to reimburse nursing home or hospital employers for the interest they pay on loans received for the purpose of purchasing, improving, installing, or erecting sit-to-stand floor lifts, ceiling lifts, other lifts, and fast electric beds, and to pay for the education and training of personnel to implement a facility policy of no manual lifting of residents or patients by employees. The employer shall submit invoices and such other documentation as required by the administrator to verify that the loan was used solely for these purposes.

(B) The administrator of workers’ compensation shall reimburse the nursing home or hospital for the interest paid on loans made to the nursing home or hospital by a lending institution.

(1) The bureau will not reimburse an employer for the interest paid on a loan made to the employer for the purpose of renting equipment.

(2) The maximum amount of reimbursement a nursing home or hospital may receive may not exceed the amount of interest that would be owed on a loan of one hundred thousand dollars at the rate of prime plus 2.5 per cent.

(3) The interest rate must be fixed for the loan period.

(4) The loan period cannot exceed five years.

(5) The bureau will make reimbursement to the employer every six months.

(6) Employers who operate more than one nursing home or hospital facility may participate in the program in respect to only one facility at a time.

(7) The lending institution must be an FDIC insured institution.

(C) Eligibility, applications, and restrictions.

(1) In order to be eligible for loans from the long-term care loan fund an employer shall meet the following criteria:

(a) The employer must be a nursing home as defined in section 3721.01 of the Revised Code or a hospital as defined in section 3701.01 of the Revised Code.

(b) The employer must be in compliance with section 4123.35 of the Revised Code.

(c) The employer must be current on any and all undisputed premiums, administrative costs, assessments, fines or moneys otherwise due to any fund administered by the Ohio bureau of workers’ compensation.

(d) The employer cannot have cumulative lapses in workers’ compensation coverage in excess of fifteen days within the eighteen months preceding the application.

(2) The employer shall apply to participate in the long-term care loan program on the forms provided by the bureau on which the employer shall:

(a) Specify the equipment that is to be purchased, improved, installed, or erected and the cost;

(b) Provide a price quote from the vendor;

(c) Provide the signature of the person duly authorized to sign for the nursing or hospital home administrator;

(d) Answer all questions on the application;

(e) Obtain the signature of the bureau consultant;

(f) Submit the completed application to the bureau.

(3) The employer shall commence the purchase, improvement, installation, or erection of equipment within thirty days of receiving the loan and shall complete the same within ninety days of its receipt, unless expressly approved by the bureau. The bureau shall verify that the loan proceeds are being used for the purpose approved in the application and shall have the right to inspect the employer’s workplace for this purpose. The bureau may use the technical assistance of the division of safety and hygiene for such an assessment.

(a) The employer shall provide the bureau documentation of the loan including the interest rate and a loan amortization table from the lending institution upon receipt of the loan.

(4) The administrator will notify applicants who have been approved to participate in the program within two weeks of receipt of the application.

(a) The bureau will process applications in the order of receipt. If the assets available from the fund are insufficient to satisfy the amount of reimbursement requested by the applicants, the administrator shall take into account the following factors to determine whether an employer will be allowed to participate in the program:

(i) Employers who have not previously applied to the program shall have priority over employers who have previously participated in the program.

(ii) No applications shall be approved which will cause the fund to operate at a deficit.

(5) If an employer’s coverage lapses during the period the employer is participating in the program, the bureau will not make any reimbursements to the employer until its coverage has been reinstated. If an employer’s coverage lapses for more than fifty-nine days during the period the employer is participating in the program, the bureau may terminate making reimbursements under the program.

(6) If the employer defaults on the loan, the employer shall notify the bureau of the default. The bureau may terminate making reimbursements under the program upon receiving notification of the default.

(D) Reconsideration of determination of eligibility.

(1) An employer may request reconsideration from a decision finding the employer did not meet the requirements provided in paragraph (C)(1) of this rule. The request must be in writing and filed with the superintendent of the division of safety and hygiene within thirty days of the notification of the decision.

(2) The employer may submit a request for reconsideration of the superintendent’s decision to the adjudicating committee pursuant to section 4123.291 of the Revised Code.

R.C. 119.032 review dates: 07/30/2008 and 07/01/2013

Promulgated Under: 119.03

Statutory Authority: 4121.12, 4121.121, 4121.30, 4121.48

Rule Amplifies: 4121.48

Prior Effective Dates: 12/19/05, 8/15/07, 12/3/07

The administrator of workers’ compensation, with the advice and consent of the bureau of workers’ compensation board of directors, has authority to determine and levy against self-insuring employers amounts to be paid to support the safety and hygiene fund, the administrative cost fund, the portion of the surplus fund that is mandatory, the portion of the surplus fund that is used for rehabilitation reimbursement subject to the self-insuring employer’s election under section 4121.66 of the Revised Code, the portion of surplus fund that is used for handicap reimbursement subject to the self-insuring employer’s election under section 4123.343 of the Revised Code, and the portion of the surplus fund used for claims reimbursement for self-insuring employers under division (H) of section 4123.512 of the Revised Code, pursuant to sections 4121.12, 4121.37, 4121.66, 4123.34, 4123.342, and 4123.35 of the Revised Code in conjunction with rule 4123-19-01 of the Administrative Code. The administrator hereby sets the self-insuring employer assessments to be effective July 1, 2009, for the period July 1, 2009, to June 30, 2010, payable in two equal remittances by February 29, 2010, and August 31, 2010, as follows:

(A) The assessments shall be on the basis of the paid compensation attributable to the individual self-insuring employer as a fraction of the total amount of paid compensation for the previous calendar year attributable to all amenable self-insuring employers.

(B) Paid compensation means all amounts paid by a self-insuring employer for living maintenance benefits, all amounts for compensation paid pursuant to sections 4121.63, 4121.67, 4123.56, 4123.57, 4123.58, 4123.59, 4123.60 and 4123.64 of the Revised Code, all amounts paid as wages in lieu of such compensation, all amounts paid in lieu of such compensation under a nonoccupational accident and sickness program fully funded by the self-insuring employer, and all amounts paid by a self-insuring employer for a violation of a specific safety standard pursuant to section 35 of article II, Ohio Constitution and section 4121.47 of the Revised Code. Any reimbursement received from the surplus fund pursuant to section 4123.512 of the Revised Code by a self-insuring employer for any such payments or compensation paid shall be applied to reduce the amount of paid compensation reported in the year in which the reimbursement is made. Any amount recovered by the self-insuring employer under section 4123.931 of the Revised Code and any amount that is determined not to have been payable to a claimant in any final administrative or judicial proceeding shall be deducted, in the year collected, from the amount of paid compensation reported.

(C) The assessments shall be computed for all self-insuring employers operating in Ohio by multiplying the following rates by the individual self-insuring employer’s paid compensation for calendar year 2008:

(1) Safety and hygiene fund: .0050.

(2) Administrative cost fund, BWC: .0889.

(3) Administrative cost fund, IC: .0798.

(4) Administrative cost fund, WCC: .00001.

(5) Surplus fund (mandatory): .0935.

(D) The assessment to fund the portion of the surplus fund that is used for rehabilitation reimbursement for all self-insuring employers who have not made an election to opt out of the rehabilitation reimbursement program under the provisions of section 4121.66 of the Revised Code shall be computed by multiplying the following rate by the individual self-insuring employer’s paid compensation for calendar year 2008: Surplus fund (rehabilitation): .1300.

(E) The assessment to fund the portion of the surplus fund that is used for handicap reimbursement for all self-insuring employers operating in Ohio who have not made an election to opt out of the handicap reimbursement program under the provisions of division (G) of section 4123.343 of the Revised Code shall be computed by multiplying the following rate by the individual self-insuring employer’s paid compensation for calendar year 2008:

Surplus fund (handicap): .2480.

(F) The assessment to fund the portion of the surplus fund that is used for claims reimbursement for all self-insuring employers operating in Ohio who have not made an election to opt out of the right to reimbursement under the provisions of division (H) of section 4123.512 of the Revised Code shall be computed by multiplying the following rate by the individual self-insuring employer’s paid compensation for calendar year 2008:

Surplus fund (disallowed claims reimbursement): .0278.

(G) An employer who no longer is a self-insuring employer in Ohio or who no longer is operating in this state shall continue to pay assessments for administrative costs and for the portion of the surplus fund that is mandatory. The assessments shall be computed by such employer by multiplying the following rates by the individual employer’s paid compensation for calendar year 2008:

(1) Administrative cost fund, BWC: .0889.

(2) Administrative cost fund, IC: .0798.

(3) Administrative cost fund, WCC: .00001

(4) Surplus fund (mandatory): .0935.

(H) If the paid compensation for a self-insuring employer for calendar year 2008 is less than eleven thousand two hundred and twenty seven dollars and twelve cents, the minimum assessments shall be paid as follows:

(1) Safety and hygiene fund: $56.14.

(2) Administrative cost fund, BWC: $998.09.

(3) Administrative cost fund, IC: $895.92.

(4) Administrative cost fund, WCC: $0.11.

(5) Surplus fund (mandatory): $1,049.74.

If the paid compensation for calendar year 2008 for a self-insuring employer which has not made an election to opt out of the rehabilitation reimbursement program effective on or before July 1, 2009 is less than fifteen thousand three hundred eighty-four dollars and sixty-two cents, the minimum assessment for the surplus fund (rehabilitation) shall be two thousand dollars.

If the paid compensation for calendar year 2008 for a self-insuring employer which has opted to participate in the handicap reimbursement program is less than fifty thousand dollars, the minimum assessment for the surplus fund (handicap) shall be twelve thousand four hundred dollars.

Assessments are applicable only for the funds to which payments must be made based upon the status and the options exercised relative to the handicap reimbursement program and the rehabilitation reimbursement program.

An employer who no longer is a self-insuring employer in Ohio or no longer is operating in this state and who has less than eleven thousand two hundred twenty-seven dollars and twelve cents in paid compensation for calendar year 2008 shall have a reduced minimum assessment. The minimum assessment shall be ninety per cent of the above minimum assessments in this paragraph in the year after becoming inactive, eighty per cent in the following year, seventy per cent in the following year, and so forth, being reduced ten per cent each year, until the assessment is phased out over ten years.

(I) If an individual self-insuring employer has become self-insured in the last five years (on or after July 1, 2004) paid compensation shall be as defined in paragraph (B) of this rule and shall additionally include compensation paid in calendar year 2008 by the state insurance fund for claim costs directly attributable to the employer prior to becoming self-insured.

(J) The initial assessment to a self-insuring employer in its first calendar year of operation as a self-insuring employer shall be prorated to cover the time period that self-insurance was in effect, but shall not be less than the minimum assessment for a self-insuring employer as provided in paragraph (H) of this rule.

(K) Pursuant to rule 4123-19-15 of the Administrative Code, the following assessment, to be billed and payable in two equal remittances by February 28, 2010, and August 31, 2010, shall be computed for all self-insuring employers by multiplying the following rate by the individual self-insuring employer’s paid compensation for calendar year 2008:

(1) Self-insuring employer guaranty fund: 0527.

(L) If an employer fails to pay the assessment when due, the administrator may add a late fee penalty of not more than five hundred dollars to the assessment plus an additional penalty amount as follows:

(1) For an assessment from sixty-one to ninety days past due, the prime interest rate plus two per cent, multiplied by the assessment due;

(2) For assessment from ninety-one to one hundred twenty days past due, the prime interest rate plus two per cent, multiplied by the assessment due;

(3) For an assessment from one hundred twenty-one to one hundred fifty days past due, the prime interest rate plus four per cent, multiplied by the assessment due;

(4) For an assessment from one hundred fifty-one to one hundred eighty days past due, the prime interest rate plus six per cent, multiplied by the assessment due;

(5) For an assessment from one hundred eighty-one to two hundred ten days past due, the prime interest rate plus eight per cent, multiplied by the assessment due;

(6) For each additional thirty-day period or portion thereof that an assessment remains past due after it has remained past due for more than two hundred ten days, the prime interest rate plus eight per cent, multiplied by the assessment due.

For purposes of this division, “prime interest rate” means the average bank prime rate, and the administrator shall determine the prime interest rate in the same manner as a county auditor determines the average bank prime rate under section 929.02 of the Revised Code.

Effective: 07/01/2009

Promulgated Under: 111.15

Statutory Authority: 4121.12, 4121.121

Rule Amplifies: 4121.37, 4121.66, 4123.34, 4123.342, 4123.343, 4123.35

Prior Effective Dates: 1/1/90, 7/1/90, 7/1/91, 7/1/92, 7/1/93, 7/1/94, 7/1/94, 1/1/95, 7/1/95, 7/1/96, 7/1/97, 7/1/98, 7/1/99, 7/1/00, 7/1/01, 7/1/02, 7/1/03, 10/6/03, 7/1/04, 7/1/05, 7/1/06, 7/1/07, 7/1/08

The administrator of workers’ compensation, with the advice and consent of the bureau of workers’ compensation board of directors, has authority to calculate contributions made to the state insurance fund by employers pursuant to section 4121.121 of the Revised Code. The administrator hereby sets the credibility table parts A, B, and C to be effective January 1, 2009 applicable to the payroll reporting period January 1, 2009 through December 31, 2009 for public employer taxing districts as indicated in the attached appendixes A and B.

APPENDIX A

TABLE 1

PART A

INDUSTRY GROUP       MANUAL CLASSIFICATIONS

01 9430

02 9431

03 9432

04 9433

05 9434, 9435, 9436, 9437

06 9438

07 9439

08 9440, 9441

20 9442

22 9443

Revised 1-1-2009 applicable to 2009 calendar year payroll

APPENDIX B

TABLE 1

PART B

INDUSTRY GROUP

(LLR)

See Table at http://www.registerofohio.state.oh.us/pdfs/4123/0/17/4123-17-33_FF_A_APP4_20081217_1547.pdf

Effective: 01/01/2009

Promulgated Under: 111.15

Statutory Authority: 4121.12, 4121.121

Rule Amplifies: 4123.39, 4123.40

Prior Effective Dates: 1/1/90, 1/1/91, 1/1/92, 1/1/93, 1/1/94, 1/1/95, 1/1/96 (Emer), 3/15/96, 1/1/97, 1/1/98, 1/1/99, 1/1/00, 1/1/01, 1/1/02, 1/1/03, 1/1/04, 1/1/05, 1/1/06, 1/1/07, 1/1/08

The administrator of workers’ compensation, with the advice and consent of the bureau of workers’ compensation board of directors, has authority to calculate contributions made to the state insurance fund by employers pursuant to section 4121.121 of the Revised Code. The administrator hereby sets the credibility table part A, “credibility and maximum value of a loss,” to be effective January 1, 2010, applicable to the payroll reporting period January 1, 2010, through December 31, 2010, for public employer taxing districts as indicated in appendix A to this rule.

Appendix

TABLE I

PART A

Credibility and Maximum Value of a Loss

See Appendix at http://www.registerofohio.state.oh.us/pdfs/4123/0/17/4123-17-33$1_FF_A_APP2_20090619_1055.pdf

Replaces: Part of 4123-17-33

Effective: 01/01/2010

Promulgated Under: 111.15

Statutory Authority: 4121.12, 4121.121

Rule Amplifies: 4123.39, 4123.40

Prior Effective Dates: 1/1/90, 1/1/91, 1/1/92, 1/1/93, 1/1/94, 1/1/95, 1/1/96 (Emer), 3/15/96, 1/1/97, 1/1/98, 1/1/99, 1/1/00, 1/1/01, 1/1/02, 1/1/03, 1/1/04, 1/1/05, 1/1/06, 1/1/07, 1/1/08, 1/1/09

The administrator of workers’ compensation, with the advice and consent of the bureau of workers’ compensation board of directors, has authority to approve contributions made to the state insurance fund by employers pursuant to section 4121.121 of the Revised Code. The administrator hereby sets base rates and expected loss rates to be effective January 1, 2009 applicable to the payroll reporting period January 1, 2009 through December 31, 2009 for public employer taxing districts as indicated in the attached appendix A.

Appendix A

See Table at http://www.registerofohio.state.oh.us/pdfs/4123/0/17/4123-17-34_FF_A_APP1_20081217_1547.pdf

Effective: 01/01/2009

Promulgated Under: 111.15

Statutory Authority: 4121.12, 4121.121

Rule Amplifies: 4123.39, 4123.40

Prior Effective Dates: 1/1/90, 1/1/91, 1/1/92, 1/1/93, 1/1/94, 1/1/95, 1/1/96 (Emer), 3/15/96, 1/1/97, 1/1/98, 1/1/99, 1/1/00, 1/1/01, 1/1/02, 1/1/03, 1/1/04, 1/1/05, 1/1/06, 1/1/07, 1/1/08

The administrator of workers’ compensation, with the advice and consent of the bureau of workers’ compensation board of directors, has authority to approve contributions made to the state insurance fund by employers pursuant to sections 4121.121, 4123.39, and 4123.40 of the Revised Code. The administrator hereby sets rates per one hundred dollar unit of payroll to be effective July 1, 2009, applicable to the payroll reporting period July 1, 2009, through June 30, 2010, for public employer state agencies, including state universities and university hospitals, as indicated in appendix A to this rule.

For the purpose of the payment of fees to the managed care organizations that manage the claims of state agencies, including state universities and university hospitals, the administrator herby sets an additional contribution to the state insurance fund applicable to the payroll reporting period July 1, 2009, through June 30, 2010, for public employer state agencies, including state universities and university hospitals, at nine and ninety-one hundredths per cent of the premium as indicated in appendix A to this rule. After the end of calendar year 2009, the bureau will compare the actual and collected fees to account for any overage or shortage in the fee collected. The bureau will apply any overages or shortages to the fee for the next policy year period. The resulting MCO fee will be a rate by agency as indicated in appendix A to this rule.

For policy years following the effective date of this rule, a public employer state (PES) agency that is not currently participating in a settlement payment program may enter into the following lump sum settlement (LSS) payment option.

(A) A PES agency that is not currently participating in a settlement payment program may participate in the lump sum settlement (LSS) direct reimbursement rating and payment program. A PES agency participating in this program will have the LSS payments excluded from the bureau’s rate calculation process.

(1) Requirements.

(a) A PES agency shall make a three-year minimum commitment to the LSS direct reimbursement payment and rating program.

(b) The earliest beginning date of the LSS program is July 1, 2004.

(c) A PES agency shall notify the bureau of its desire to participate in the LSS direct reimbursement and payment program before the first day of January immediately preceding the policy year in which the agency wishes to participate in the program. The notification shall be made on the form provided by the bureau and signed by the PES agency’s designee.

(d) A PES agency currently participating in a settlement program is not eligible to participate in the LSS direct reimbursement payment and rating program.

(2) Lump sum settlement (LSS) rate calculation rules.

(a) All LSS payments will be treated the same whether the result of a court-ordered settlement, an agency-negotiated settlement or any other type of settlement.

(b) Once a PES agency begins participating in the LSS direct reimbursement and rating program, all LSS payments will be excluded from the five year losses used to calculate the “pure premium rate” for future policy year rate calculations. The pure premium rate is defined as the rate that is the actual five year losses divided by the five year reported payroll used to project the rate needed to be collected for the next policy year. The calculation of the “overage and shortage rate” will include the LSS payments paid by the bureau and not reimbursed by the PES agency. The calculation will exclude the LSS payments paid by the bureau and reimbursed by the PES agency. The overage and shortage rate is defined as the rate at which the agency must pay any past shortage in rates or the reduction in rate of any past overage in premium paid.

(c) When an agency terminates a LSS direct reimbursement and rating program, the pure premium rate and the overage and shortage rate will include all LSS payments that were made by the bureau and not reimbursed by the PES agency.

(3) Lump sum settlement (LSS) reimbursement payments.

(a) A lump sum settlement will be billed in the next quarter following the date the LSS warrant was cashed. The October billing will include any lump sum settlement where the warrant was cashed in July, August or September; the January billing where the warrant was cashed in October, November or December; the April billing where the warrant was cashed in January, February or March; and the July billing where the warrant was cashed in April, May or June.

(b) The bureau will bill a structured settlement to the PES agency as the warrant is cashed.

(c) The PES agency shall pay the LSS quarterly bill within thirty days of the billing date.

(d) If the PES agency fails to pay a LSS quarterly bill within thirty days, the bureau will remove the PES agency from the LSS direct reimbursement rating and payment program and the bureau will include the outstanding LSS payments in the rate calculation.

(e) A PES agency may settle permanent total disability and death claims in which the present value was used in rate calculations for five years. The settlement amount will be included in the quarterly billings. In addition, there will be no substitution of the permanent total disability or death benefits paid to date for the present value.

(f) A PES agency shall file any dispute in writing, specifying the agency’s objections to the billing, with the bureau’s direct billing department. The filing of a dispute does not relieve or suspend the agency’s obligation to pay the obligation. Questions concerning the rate calculations should be directed to the bureau’s actuarial department.

(4) Change in status.

(a) When a PES agency combines with another PES agency, the choice that the agency that is determined to be the succeeding agency made in respect to participating in this program controls.

(b) A PES agency that is participating in a program and transfers a portion of its operations to another agency shall continue to participate in the program. The choice made in respect to participating in this program by the agency to which the operations were transferred will not be affected.

(c) Where a PES agency participating in a LSS direct reimbursement rating and payment program becomes self-insured, the bureau will calculate a buyout and any obligations owed by the PES agency under the program will be included in the buyout.

(5) Terminating a program.

(a) A PES agency may request, in writing, to terminate a program after the three year minimum commitment period has been completed. The agency’s participation in the program will automatically be renewed for another three years unless the written request is submitted.

(b) A PES agency shall submit a request to terminate a program before the first day of January of the year the three year commitment ends. For example, if the PES agency starts participating in the LSS program or its participation is renewed for the policy year beginning July 1, 2004, the request must be submitted before January 1, 2007.

(c) Once a PES agency terminates a LSS program, the agency is no longer eligible to participate in a program.

APPENDIX A

STATE AGENCY

RATES EFFECTIVE JULY 1, 2009

3100 General Revenue (Sch.)

Commissions, Boards and Departments not otherwise classified 0.21 0.0197

3101 Judiciary – Supreme Court, Judicial Conference 0.21 0.0185

3102 Ohio Senate (Sch.) 0.21 0.0197

3103 Ohio House of Representatives (Sch.) 0.21 0.0197

3105 Legislative Service Commission (Sch.) 0.21 0.0197

3106 Office of the Governor (Sch.) 0.21 0.0197

3109 Secretary of State 0.15 0.0216

3110 Attorney General 0.05 0.0197

3111 Department of Agriculture 0.79 0.0949

3112 Department of Commerce 0.63 0.0555

3113 Department of Education 0.32 0.0319

3114 Department of Health 0.57 0.0302

3115 Industrial Commission of Ohio 0.43 0.0636

3117 Public Utilities Commission of Ohio 0.16 0.0160

3120 Department of Taxation 0.32 0.0254

3121 Bureau of Workers’ Compensation 0.37 0.0560

3122 Auditor of State 0.61 0.0324

3123 Civil Defense (Volunteer) (Sch.) 0.21 0.0197

3124 Treasurer of Ohio 0.23 0.0233

3125 Department of Administrative Services 0.70 0.0581

3127 Ohio Board of Regents (Sch.) 0.21 0.0197

3130 State Library Board 0.22 0.0347

3136 Ohio Veterans Home Agency 2.58 0.2514

3137 Department of Youth Services 4.71 0.4869

3139 Ohio Arts Council (Sch.) 0.21 0.0197

3150 Department of Mental Health 2.43 0.2566

3152 Ohio Expositions Commission 3.46 0.3074

3154 Department of Natural Resources 1.42 0.1412

3156 Adjutant General 0.97 0.1031

3160 Ohio National Guard 0.05 0.0050

3166 Department of Development 0.10 0.0166

3167 Department of Insurance 0.09 0.0000

3169 Racing Commission of Ohio (Sch.) 0.21 0.0197

3170 Ohio Civil Rights Commission 0.12 0.0164

3171 Board of Barber Examiners (Sch.) 0.21 0.0197

3172 State Board of Cosmetology (Sch.) 0.21 0.0197

3173 State Dental Board (Sch.) 0.21 0.0197

3174 State Board of Embalmers & Funeral Directors (Sch.) 0.21 0.0197

3175 State Medical Board (Sch.) 0.21 0.0197

3176 State Board of Nursing Education and Nurse Registration (Sch.) 0.21 0.0197

3177 State Board of Optometry (Sch.) 0.21 0.0197

3178 State Board of Pharmacy (Sch.) 0.21 0.0197

3179 State Veterinary Medical Board (Sch.) 0.21 0.0197

3180 State Board of Accountancy (Sch.) 0.21 0.0197

3181 State Board of Architects (Sch.) 0.21 0.0197

3183 State Board of Engineers & Surveyors (Sch.) 0.21 0.0197

3186 Ohio Water Development Authority (Sch.) 0.21 0.0197

3187 Rehabilitation Services Commission 0.56 0.0356

3188 Department of Rehabilitation and Correction 2.06 0.1894

3190 Environmental Protection Agency 0.12 0.0173

3191 Office of Budget and Management 0.12 0.0052

3192 Department of Aging 0.05 0.0163

3193 Court of Claims (Sch.) 0.21 0.0197

3194 Ohio Legal Rights Service (Sch.) 0.21 0.0197

3200 Department of Transportation 1.94 0.1950

3202 The Petroleum Underground Storage Tank Release Compensation Board (Sch.) 0.21 0.0197

3203 Office of Inspector General (Sch.) 0.21 0.0197

3204 Capital Square Review and Advisory Board (Sch.) 0.21 0.0197

3206 Ohio Medical Transportation Board (Sch.) 0.21 0.0197

3207 Ohio Cultural Facilities Commission (Sch.) 0.21 0.0197

3208 Joint Legislative Ethics Commission (Sch.) 0.21 0.0197

3209 Lake Erie Commission (Sch.) 0.21 0.0197

3210 Ohio Elections Commission (Sch.) 0.21 0.0197

3400 Department of Public Safety 0.75 0.0865

3501 Ohio Public Defender Commission (Sch.) 0.21 0.0197

3504 Office of the Consumers’ Counsel (Sch.) 0.21 0.0197

3512 Commission on Hispanic/Latino Affairs (Sch.) 0.21 0.0197

3516 Board of Speech Pathology and Audiology (Sch.) 0.21 0.0197

3518 Board of Dispensing Opticians (Sch.) 0.21 0.0197

3519 Department of Mental Retardation and Developmental Disabilities 6.13 0.6757

3520 Board of Chiropractic Examiners (Sch.) 0.21 0.0197

3521 State Employee Relations Board (Sch.) 0.21 0.0197

3523 Ohio Ethics Commission (Sch.) 0.21 0.0197

3524 Ohio Air Quality Development Authority (Sch.) 0.21 0.0197

3525 Liquor Control Commission (Sch.) 0.21 0.0197

3527 Psychology Board (Sch.) 0.21 0.0197

3528 Occupational & Physical Therapy Board (Sch.) 0.21 0.0197

3529 Counselors and Social Workers Board (Sch.) 0.21 0.0197

3530 Sanitarian Registration Board (Sch.) 0.21 0.0197

3531 Athletic Commission (Sch.) 0.21 0.0197

3532 Commission on Minority Health (Sch.) 0.21 0.0197

3533 Board of Dietetics (Sch.) 0.21 0.0197

3535 Department of Alcohol and Drug Addiction 0.29 0.0203

3536 Commission on Dispute Resolution & Conflict Management (Sch.) 0.21 0.0197

3537 Ohio Respiratory Care Board (Sch.) 0.21 0.0197

3538 Public Works Commission (Sch.) 0.21 0.0197

3539 Ohio Tuition Trust Authority (Sch.) 0.21 0.0197

5600 Ohio Building Authority 0.05 0.0330

5900 Lottery Commission 0.05 0.0162

5903 Joint Commission on Agency Rule Review (Sch.) 0.21 0.0197

5904 Ohio School Facilities Commission (Sch.) 0.21 0.0197

5906 Board of Motor Vehicle Collision Repair (Sch.) 0.21 0.0197

5910 Department of Job & Family Services 0.28 0.0275

5911 State Board of Career Colleges and Schools (Sch.) 0.21 0.0197

5912 Board of Tax Appeals (Sch.) 0.21 0.0197

5913 Personnel Board of Review (Sch.) 0.21 0.0197

5914 Southern Ohio Agricultural & Community Development Foundation (Sch.) 0.21 0.0197

5924 Orthotics, Prosthetics and Pedorthics Board (Sch.) 0.21 0.0197

5928 Chemical Dependency Professionals Board (Sch.) 0.21 0.0197

5930 Manufactured Homes Commission (Sch.) 0.21 0.0197

5931 Ohio Housing Finance Agency (Sch.) 0.21 0.0197

5932 Etech Ohio Commission (Sch.) 0.21 0.0197

5933 Environmental Review Appeals Commission (Sch.) 0.21 0.0197

5935 Workers’ Compensation Council (Sch.) 0.21 0.0197

STATE UNIVERSITIES

3128 Cleveland State University 0.25 0.0241

3141 Bowling Green State University 0.36 0.0414

3142 Kent State University 0.25 0.0389

3143 Miami University 0.51 0.0576

3144 Ohio University 0.58 0.0639

3145 Ohio State University, Ohio Agricultural Center 0.30 0.0359

3146 Central State University 0.99 0.0675

3148 University of Toledo Health Science Campus 0.05 0.0230

3149 University of Toledo 0.41 0.0411

3151 OSU Cooperative Extension 0.09 0.0198

3157 Youngstown State University 0.20 0.0265

3158 Wright State University 0.12 0.0182

3159 University of Akron 0.16 0.0277

3505 University of Cincinnati 0.19 0.0249

3526 Shawnee State University 0.21 0.0263

5905 Northeastern Ohio Universities College of Medicine 0.20 0.0239

STATE UNIVERSITY HOSPITALS

MANUAL AGENCY RATE

MCO Rate

3131 Ohio State University Hospital 0.77 0.0823

3161 University Medical Center 0.29 0.0377

3201 OSU Cancer Research Hospital 0.60 0.0580

5907 The Ohio State University Hospitals East 1.62 0.1699

Effective: 07/01/2009

Promulgated Under: 111.15

Statutory Authority: 4121.12, 4121.121

Rule Amplifies: 4121.12, 4123.29, 4123.40

Prior Effective Dates: 7/1/90, 7/1/91, 7/1/92, 7/1/93, 7/1/94, 7/1/95, 7/1/96, 7/1/97, 7/1/98, 7/1/99, 7/1/00, 7/1/01, 7/1/02, 7/1/03, 7/10/04, 7/1/05, 7/1/06, 7/1/07, 1/1/08, 7/1/08

(A) The administrator of workers’ compensation, with the advice and consent of the bureau of workers’ compensation board of directors, has authority to calculate contributions to the administrative cost fund by employers pursuant to sections 4121.121, 4123.341, and 4123.342 of the Revised Code. The administrator hereby sets administrative cost rates as indicated in paragraph (D) of this rule for the bureau of workers’ compensation and the bureau of workers’ compensation board of directors. Based upon the information provided to the administrator by the industrial commission pursuant to section 4123.342 of the Revised Code, the administrator, with the approval of the chairperson of the industrial commission, hereby sets administrative cost rates as indicated in paragraph (E) of this rule for the industrial commission.

(B) The administrative cost rate for each employer’s assessment, except for self-insuring employers, is calculated as follows:

(1) If the employer qualifies for experience rating, either as an individual or through participation in group rating, the assessment is calculated based on a percentage of the employer’s experience rated premium.

(2) If the employer is not experience rated, the assessment is calculated based on a percentage of the employer’s base rate premium.

(3) If the employer is retrospectively rated, the assessment is calculated based on a percentage of the employer’s experience rated premium or base rated premium (but not the minimum premium percentage from the retrospective rating plan) that the employer would have paid if the employer were not participating in retrospective rating.

(4) For state agencies, including state universities and state university hospitals, the assessment is calculated based on a percentage of the employer’s premium.

(C) Whenever administrative cost rates established under this rule and rule 4123-17-32 of the Administrative Code prove inadequate or excessive, the same may be adjusted at any time during the biennial period.

(D) Administrative cost rates for the bureau of workers’ compensation and bureau of workers’ compensation board of directors.

(1) Private employers: 14.01 per cent of premium effective July 1, 2009.

(2) Public employer taxing districts: 8.25 per cent of premium effective January 1, 2009.

(3) Public employer state agencies: 12.85 per cent of premium effective July 1, 2009.

(E) Administrative cost rates for the industrial commission.

(1) Private employers: 2.10 per cent of premium effective July 1, 2009.

(2) Public employer taxing districts: 1.81 per cent of premium effective January 1, 2009.

(3) Public employer state agencies: 3.31 per cent of premium effective July 1, 2009.

(F) Administrative cost rates for the workers’ compensation council.

(1) Private employers: 0.0446 per cent of premium effective July 1, 2009.

(2) Public employer taxing districts: 0.0021 per cent of premium effective January 1, 2009.

(3) Public employer state agencies: 0.0004 per cent of premium effective July 1, 2009.

Effective: 07/01/2009

Promulgated Under: 111.15

Statutory Authority: 4121.12, 4121.121

Rule Amplifies: 4123.341, 4123.342

Prior Effective Dates: 7/1/90, 7/1/91, 7/1/91, 7/1/93, 7/1/94, 1/1/95, 7/1/95, 7/1/96, 7/1/97, 7/1/98, 7/1/99, 7/1/00, 7/1/01, 7/1/02, 7/1/03, 7/1/04, 7/1/06, 7/1/07, 7/1/08

The administrator of workers’ compensation, with the advice and consent of the bureau of workers’ compensation board of directors, has authority to approve contributions to the state insurance fund by employers pursuant to sections 4121.121 and 4121.37 of the Revised Code. The administrator hereby establishes the amount of premium to be set aside to fund the division of safety and hygiene to be one per cent of paid premium for public employer taxing districts and public employer state agencies, and one per cent of paid premium for private employers.

Effective: 07/21/2008

Promulgated Under: 111.15

Statutory Authority: 4121.12, 4121.121, 4121.37, 4123.34

Rule Amplifies: 4121.37, 4123.34

Prior Effective Dates: 7/1/90, 7/1/93, 7/1/98, 7/1/99

The workers’ compensation board, exercising its authority to approve contributions to the state insurance fund by employers pursuant to sections 4121.12 and 4121.34 of the Revised Code, hereby establishes the amount of premium to be set aside for the premium payment security fund at one-half of one per cent of paid premium.

HISTORY: Eff 7-1-90; 7-1-92

Rule promulgated under: RC 111.15

Rule authorized by: RC 4121.12(J)(2)

Rule amplifies: RC 4121.12, 4123.34

The administrator of workers’ compensation, with the advice and consent of the bureau of workers’ compensation board of directors, has authority to establish factors for the purpose of implementing the procedure for self-insurance buy-outs. The administrator hereby adopts factors to establish the liability of a private employer or a public taxing district employer requesting to transfer from state insurance fund coverage to self-insurance with the buy-out calculated upon the pure premium paid by the employer on payroll for a seven calendar year period, as provided in paragraph (L) of rule 4123-19-03 of the Administrative Code. The factors indicated in attached appendix A shall apply to appropriate applications filed on or after July 1, 1998.

Appendix A

Calendar Year – Buyout Percentage: Private Employers – Buyout Percentage: Public Employer Taxing Districts

For all seven years of buy-out calculation – 0.0% – 0.0%

Effective: 07/21/2008

Promulgated Under: 111.15

Statutory Authority: 4121.12, 4121.121

Rule Amplifies: 4121.12, 4123.14, 4123.35

Prior Effective Dates: 7/1/90; 7/1/91; 7/1/92; 11/23/92; 2/22/93; 7/1/93; 7/1/94; 7/1/95; 7/1/96; 7/1/97; 7/1/98

As used in rules 4123-17-41 to 4123-17-54 of the Administrative Code:

(A) “Minimum premium” means the fixed cost chargeable to an employer, independent of the claims costs of the employer during the year of experience.

(B) “Maximum premium” means the employer’s experience-rated premium multiplied by the maximum premium percentage selected by the employer.

(C) “Per claim limit” means the maximum chargeable costs for each claim incurred during the retrospective-rated period, as selected by the employer.

(D) “Retrospective policy year” or “policy year” means the fiscal year beginning July first for private employers and the calendar year beginning January first for public employer taxing districts.

(E) “Evaluation period” means the ten-year period beginning with the first day of the policy year. Annual evaluations will occur throughout the evaluation period. At the end of the evaluation period, final settlement will be made.

(F) “Final settlement” means the final determination of premium for a policy year including any remaining reserves for claims occurring in the policy year. This determination will occur at the end of the evaluation period and will terminate the plan for that policy year.

(G) “Annual evaluation” means a statement of claim costs and premium. This information will be shown on the “Retrospective Rating Policy Year Statement.”

(H) “Incurred losses” are compensation payments, medical payments, and reserves. Reserves will be assigned at the end of the evaluation period.

(I) “Retrospective premium” means the compilation of minimum premium, all medical costs, indemnity, and any remaining reserves at the end of the ten year liability.

Effective: 10/05/2005

Promulgated Under: 111.15

Statutory Authority: 4121.12, 4121.121

Rule Amplifies: 4123.29, 4123.34

Prior Effective Dates: 7/1/88, 10/2/90, 7/1/94, 7/1/97

(A) An employer may be eligible for either the Tier I or Tier II retrospective rating plan depending upon satisfying the eligibility requirements for either the Tier I or Tier II retrospective rating plan as described in this rule.

(B) For both the Tier I and Tier II retrospective rating plans, the employer must satisfy the following requirements:

(1) The employer must be current on any and all undisputed premiums, administrative costs, assessments, fines or moneys otherwise due to any fund administered by the Ohio bureau of workers’ compensation, including amounts due for retrospective rating.

(2) The employer cannot have any unpaid audit findings or other unpaid billings as of the application deadline.

(3) The employer cannot have cumulative lapses in workers’ compensation coverage in excess of fifteen days within the last five rating years.

(4) The employer must be in an active status on the first day of the policy year. The administrator may waive this requirement for new business entities moving into Ohio.

(5) The employer’s estimated experience-rated premium for the retrospective rating year must be greater than or equal to the minimum experience-rated premium threshold listed on the “Restrospective Rating Minimum Premium Percentages Table.” If estimated premium is less than the minimum experience-rated premium threshold listed on the “Restrospective Rating Minimum Premium Percentages Table,” the bureau will reject the application. In the event the estimated experience-rated premium is equal to or greater than the minimum premium threshold but the actual premium is less than the minimum experience-rated premium threshold, the retrospective rating plan remains in effect for that risk and the minimum premium is based on the minimum experience-rated premium threshold multiplied by the appropriate minimum premium percentage for the hazard group and the claim limit/maximum premium percentage selected.

(C) In addition to the requirements of paragraph (B) of this rule, for the Tier I retrospective rating plan, the employer must submit audited financial statements using the generally accepted accounting principles (GAAP) to satisfy the following requirements:

(1) The employer must satisfy financial standards demonstrating strength and stability. In reviewing the financial requirements of the employer, the bureau shall consider, but is not limited to, the following criteria, as applicable:

(a) The employer’s trend of operating profit for a minimum of three years.

(b) The employer’s trend of net income for a minimum of five years.

(c) The employer’s consistent return on equity, of ten per cent or better.

(d) Significant asset size of the employer in the state of Ohio.

(e) A total liabilities/equity ratio of no greater than four to one.

(f) The employer’s debt structure, including current versus long term debt, recent drastic changes in debt, etc.

(g) The employer’s retained earnings trend.

(h) Whether the employer has significant fluctuations in specific balance sheet numbers from one year to the next.

(I) The employer’s bond rating.

(2) The employer shall demonstrate that if it sustains a catastrophic or severe workers’ compensation loss, it has the ability to maintain its financial viability and to cover all costs of the retrospective rating plan through closure.

(3) The employer shall maintain a safety program approved by the bureau’s division of safety and hygiene.

(4) The employer cannot have entered into a part-pay agreement for payment of assessments due the state insurance fund for the past three rating years preceding the beginning date of the retrospective policy year.

(D) In addition to the requirements of paragraph (B) of this rule, for the Tier II retrospective rating plan, the employer must submit audited financial statements using the generally accepted accounting principles (GAAP) to satisfy the following requirements:

(1) For an employer that does not demonstrate the ability to satisfy the financial criteria of paragraph (C)(1) of this rule, the employer must demonstrate the ability to sustain losses that are at the maximum claim limit for the retrospective rating plan and still maintain its financial viability.

(2) Within one year of entering a retrospective rating plan, the employer must implement the bureau’s ten step business plan as defined in rule 4123-17-70 of the Administrative Code. The employer must agree to meet quarterly with a bureau representative to discuss the retrospective rating program and to discuss risk management strategies that other employers are successfully using to control their workers’ compensation costs.

(E) An employer participating in a retrospective rating plan prior to July 1, 1997, shall operate under the requirements of the Tier II retrospective rating plan, but the bureau shall calculate the employer’s premiums in accordance with the tables for a Tier I retrospective rating plan.

HISTORY: Eff 7-1-88; 10-2-90; 7-1-97; 10-10-01

Rule promulgated under: RC 111.15

Rule authorized by: RC 4121.12, 4121.121

Rule amplifies: RC 4123.29, 4123.34

(A) The application for any retrospective rating plan is optional with the employer, subject to acceptance by the Ohio bureau of workers’ compensation.

(B) All operations of a risk electing retrospective rating are subject to retrospective rating.

(C) Application must be filed on a bureau form provided for the application for the retrospective rating plan. The application must be completed in its entirety, including but not limited to the selection of a per-claim limit and maximum premium per cent. The absence of pertinent information will result in the application being rejected.

(D) The written application must be filed with the Ohio bureau of workers’ compensation ninety days preceding the beginning date of the policy year. An application for a retrospective rating plan is applicable to only one policy year. Continuation of a plan for subsequent years is subject to filing of an application on a yearly basis and the meeting of eligibility requirements each year.

(E) The application may be filed in any office (central or service) of the Ohio bureau of workers’ compensation.

(F) All changes to the original application must be filed on a new bureau form provided for the application for the retrospective rating plan and must be filed prior to the filing deadline. Any rescissions made must be completed in writing, signed by an officer of the company, and be filed prior to the filing deadline. This filing deadline is the same as the deadline for filing an application for a retrospective rating plan. Any changes received by the bureau of workers’ compensation after the filing deadline will not be honored. The latest application form or rescission received by the bureau prior to the filing deadline will be used in determining the premium obligation.

HISTORY: Eff 7-1-88; 10-2-90; 7-1-97

Rule promulgated under: RC 111.15

Rule authorized by: RC 4121.12, 4121.121

Rule amplifies: RC 4123.29, 4123.34

(A) The minimum annual premium due the fund shall not be less than the minimum experience-rated premium threshold times the appropriate minimum premium percentage for the hazard group and the claim limit/maximum premium percentage selected for the specified policy year under review.

(B) If estimated experience-rated premium is greater than or equal to the minimum experience-rated premium threshold listed on the “Retrospective Rating Minimum Premium Percentages Table” but actual experience-rated premium is less than the minimum experience-rated premium threshold listed, the employer remains retrospective-rated. The minimum premium due would be the minimum experience-rated premium threshold times the appropriate minimum premium percentage for the hazard group and the claim limit/maximum premium percentage selected.

(C) The minimum annual premium is due and payable even if the employer has no claims costs during the evaluation period for the specified policy year under review.

(D) The minimum premium will not be prorated. The minimum annual premium is due and payable if the employer has elected to be retrospective-rated, the employer has been approved for retrospective rating by the Ohio bureau of workers’ compensation, and the filing deadline has expired.

HISTORY: Replaces rule 4121-7-44; Eff 7-1-88; 10-2-90

Rule promulgated under: RC 111.15

Rule authorized by: RC 4121.121, 4121.13, 4121.30

Rule amplifies: RC 4123.29, 4123.34

(A) The hazard group for an employer shall be determined as follows. The employer’s experience-rated premium for the policy year shall be allocated to the ten industry groups used in experience rating as provided in appendix B, (table 1, part B), of rule 4123-17-05 of the Administrative Code. The industry group producing the most premium shall be used to determine the hazard group, unless that industry group is group ten; in the latter case, the industry group producing the second highest premium shall be used, unless its premium is less than ten per cent. Industry group ten is the determining industry group only if it has the largest premium and no other industry group has ten per cent of premium. If the determining industry group is two, four, five, or ten, the hazard group shall be A. If the determining industry group is six, seven, or nine, the hazard group shall be B. If the determining industry group is one or three, the hazard group shall be C. If the determining industry group is eight, the hazard group shall be D. For all public employer taxing districts, the hazard group shall be that group specifically developed for such employers and as shall be periodically established by the administrator with the advice and consent of the bureau of workers’ compensation board of directors.

(B) The Ohio bureau of workers’ compensation shall notify the employer of the estimated minimum premium percentage based on the limits selected by the employer and the payroll of the employer. The premium rates on the payroll reports received by the employer for the policy year will be calculated using the minimum premium per cent.

Effective: 07/21/2008

Promulgated Under: 111.15

Statutory Authority: 4121.12, 4121.121

Rule Amplifies: 4123.29, 4123.34

Prior Effective Dates: 7/1/88, 10/2/90, 7/1/97

(A) Upon completion of a policy year and annually throughout the evaluation period, the employer’s aggregate retrospective-rated premium for the policy year will be determined based on the incurred losses and on the audited payrolls of the employer. The Ohio bureau of workers’ compensation shall annually send the employer a “Retrospective Rating Policy Year Statement” within approximately four months following the end of the policy year.

(B) Incurred losses will be based on compensation payments and medical payments. The cost of permanent total disability claims and death claims will be charged to the employer as the payments are made, and the reserve will be billed in the final settlement.

(C) If the retrospective premium due is less than the retrospective premium paid as of the prior evaluation date, the difference, subject to the minimum premium, less assessments due any fund administered by the Ohio bureau of workers’ compensation will be refunded to the employer.

(D) If the retrospective premium due is greater than the retrospective premium paid as of the prior evaluation date, the difference must be paid to the state insurance fund within thirty days after the date of the mailing of the notice that premium is due or the employer will be subject to penalties as provided in rule 4123-17-48 of the Administrative Code.

(E) Values used in an annual evaluation will not be revised for any reason other than clerical error. The Ohio bureau of workers’ compensation must be notified of any such errors, in writing, within sixty days after the mailing of the retrospective rating policy year statement.

(F) Premiums are subject to minimum and maximum premium limitations as selected by the employer.

Effective: 10/05/2005

Promulgated Under: 111.15

Statutory Authority: 4121.121, 4121.13, 4121.30

Rule Amplifies: 4123.29, 4123.34

Prior Effective Dates: 7/1/88, 10/2/90, 7/1/94

(A) At the end of the tenth-year determination of retrospective premium, the plan for that retrospective policy year shall terminate.

(B) As part of the final determination of retrospective premium, the Ohio bureau of workers’ compensation will evaluate the employer’s claims and establish reserves. Reserves will be developed for claims, other than allowed permanent total disability claims and allowed death claims, using the balance sheet reserve table in effect as of the ending date of the evaluation period.

(C) The Ohio bureau of workers’ compensation will notify the employer of the reserve balances which will be reflected on the “Retrospective Rating Policy Year Statement.”

(D) The final settlement calculated, subject to the minimum and maximum premium of the plan selected, shall be paid to the Ohio bureau of workers’ compensation within thirty days after the date of the mailing of the notice that premium is due.

(E) The final determination of a retrospective premium will not be revised for any reason other than clerical error.

HISTORY: Replaces rule 4121-7-47; Eff 7-1-88; 10-2-90

Rule promulgated under: RC 111.15

Rule authorized by: RC 4121.121, 4121.13, 4121.30

Rule amplifies: RC 4123.29, 4123.34

(A) Any retrospective-rated employer failing to file a report of payroll expenditures or failing to pay premium when due, as prescribed in rules 4123-17-46 and 4123-19-07 of the Administrative Code, will be penalized in accordance with paragraph (C) of rule 4123-19-07 of the Administrative Code if the employer is a private employer or paragraph (F) of rule 4123-19-07 of the Administrative Code if the employer is a county or public employer taxing district. All premium due as a result of the selection of retrospective rating, including the minimum premium and premium as a result of annual evaluations, shall be included as premium as used in this rule.

(B) Any employer that is not current on any and all undisputed premiums, administrative costs, assessments, fines or monies otherwise due to any fund administered by the Ohio bureau of workers’ compensation including amounts due for retrospective rating, will not be eligible for retrospective rating in future policy years as long as monies have not been remitted.

HISTORY: Eff 7-1-88; 7-1-90; 7-1-94

Rule promulgated under: RC 111.15

Rule authorized by: RC 4121.121, 4121.13, 4121.30

Rule amplifies: RC 4123.29, 4123.34

(A) Handicap relief will be applied to reducible claims costs as limited by the per-claim limit selected by the employer.

(B) Rule 4121-3-28 of the Administrative Code will also apply to retrospective rated employers.

HISTORY: Replaces rule 4121-7-49; Eff 7-1-88; 10-2-90

Rule promulgated under: RC 111.15

Rule authorized by: RC 4121.121, 4121.13, 4121.30

Rule amplifies: RC 4123.29, 4123.34

(A) A “catastrophe” is defined as an occurrence in which two or more employees of one employer are killed or receive injuries resulting in permanent and total disability.

(B) “Catastrophe cost” is defined as the total medical payments, compensation payments, and reserves for future costs, as a direct result of a catastrophe.

(C) Catastrophe cost in excess of the catastrophe value from part A of the “experience-rated credibility table” shall not be included in the experience of a classification or of an employer.

(D) Catastrophe cost in excess of the catastrophe value from part A of the experience-rated credibility table in effect for the retrospective policy year shall not be included in the annual evaluation or final settlement of that retrospective policy year.

(E) Notwithstanding the provisions of this rule, the administrator may consider any special circumstances which may affect the determination of a catastrophe loss.

Effective: 10/05/2005

Promulgated Under: 111.15

Statutory Authority: 4121.121, 4121.13, 4121.30

Rule Amplifies: 4123.29, 4123.34

Prior Effective Dates: 7/1/88, 7/1/89, 10/2/90

(A) A risk may not retroactively include claims experience in a plan, exclude claims experience from a plan nor voluntarily terminate a plan during the evaluation period.

(B) Successor: retrospective-rated Predecessor: experience-rated, base-rated, non-complying or self-insured

Where one legal entity that has established coverage and is a retrospective-rated employer wholly succeeds one or more legal entities having established coverage and the predecessor entities are either experience-rated, base-rated, non-complying or self-insured at the date of succession, the costs incurred and payroll reported by the predecessor from the date of succession to the end of the policy year, shall be included in the successor’s retrospective rating plan. The successor remains liable for any and all charges associated with the predecessor. If the predecessor had at any time participated in a retrospective policy plan, the successor remains liable for any and all charges associated with the retrospective policy plans. The adjustment for combinations in the experience rating system will follow the same rules that are in effect as of the date of succession.

(C) Successor: self-insured Predecessor: retrospective-rated

Where one legal entity that has established coverage and is a self-insured employer wholly succeeds one or more entities that are retrospective-rated, the retrospective-rated predecessor’s plan(s) shall terminate as of the ending date of the evaluation period. Payroll reported and claims incurred on or after the date of succession will be the responsibility of the successor. The successor shall remain responsible for all liabilities of the predecessor, including but not limited to costs associated with any retrospective policy years still in the evaluation period. The minimum premium for the current policy year will be based upon the predecessor’s annualized payroll.

(D) Successor: experience-rated or base-rated Predecessor: retrospective-rated

Where one legal entity that has established coverage and is an experience-rated or based-rated employer wholly succeeds one or more entities that are retrospective-rated, the retrospective-rated predecessor’s plan(s) shall terminate as of the ending date of the evaluation period. Payroll reported and claims incurred on or after the date of succession will be the responsibility of the successor under its experience rated plan. The successor shall remain responsible for all liabilities of the predecessor, including but not limited to costs associated with any retrospective policy years still in the evaluation period. The minimum premium for the current policy year will be based upon the predecessor’s annualized payroll.

(E) Successor: retrospective-rated Predecessor: retrospective-rated

If the successor and the predecessor are retrospective-rated employers for the current policy year, the successor shall be retrospective-rated based on the combined experience of the predecessor and the successor. The successor remains liable for any and all retrospective-rated premiums or other charges associated with the predecessor. The adjustment for combinations in the experience rating system will follow the same rules that are in effect as of the date of succession.

(F) Successor: entity not having coverage Predecessor: retrospective-rated

When an entity not having coverage wholly succeeds a retrospective-rated entity, the experience of the predecessor shall be transferred to the successor-employer effective as of the actual date of succession. The successor remains liable for any and all open retrospective-rated premium or other charges associated with the predecessor. The successor entity will become retrospective-rated as of the date of succession until the end of the policy year, with the same plan parameters chosen by the predecessor risk. The adjustment for combinations in the experience rating system will follow the same rules that are in effect as of the date of succession.

(G) Successor: cancels coverage Predecessor: no predecessor

If a current or previously retrospective-rated employer cancels coverage and does not transfer or combine operations with another entity, all open retrospective policy years will be terminated as of the date of cancellation. If the employer was retrospective-rated during the two most recent rating years, the final premium for each of those years will be the maximum premium for the plan selected by the employer. The maximum premium for the current year will be based upon the employer’s annualized payroll. If the employer was retrospective-rated in other years of the evaluation period, the final premium for each of those years will be calculated as stated in rule 4123-17-47 of the Administrative Code.

(H) Successor: files a petition for bankruptcy Predecessor: no predecessor

If a current or previously retrospective-rated employer with open policy year(s) files a petition for bankruptcy under chapter 7 or chapter 11 of the Federal Bankruptcy Law, that employer shall notify the bureau of workers’ compensation law section by certified mail within five working days from the date of the bankruptcy filing. The bureau will petition the bankruptcy court to take appropriate action to protect the health of the state insurance fund and other related funds.

(I) Successor and/or predecessor: open retrospective-rated policy years in the evaluation period.

If the successor and predecessor employers are not currently retrospective-rated but either or both have open retrospective-rated policy years in the evaluation period, the successor shall be liable for any and all retrospective-rated premiums or other charges associated with the predecessor. The adjustment for combinations in the experience rating system will follow the same rules that are currently being used.

(J) Partial transfer

If an entity partially succeeds another entity and the predecessor entity has any retrospective policy years in the evaluation period, the predecessor entity remains liable for all premium associated with claims incurred prior to the date of the partial transfer. If the financial capability of the predecessor entity is not sufficient to cover the costs of the retrospective rating plan, the successor shall be liable for all unpaid costs of the predecessor’s retrospective rating plan through closure. If the successor is retrospective-rated in the current policy year and the effective date of the partial transfer is other than the beginning of the rating year, the successor will continue to be rated in the same manner as prior to the transfer. The successor will be liable for any payroll and/or claims incurred from that part of the predecessor entity which was transferred, beginning on the date of the transfer. If the successor has retrospective policy years in the evaluation period, the successor remains liable for all charges associated with retrospective rating plan(s), whether or not the successor is retrospective rated as of the effective date of the partial transfer. The adjustment for partial transfers in the experience rating system will follow the same rules that are in effect as of the date of succession.

(K) Transfer or sale of assets only

In the case of the transfer or sale of assets without transfer of liability or stock, the transferor who is now retrospective-rated or has been retrospective-rated with policy year(s) still in the evaluation period shall notify the Ohio bureau of workers’ compensation actuarial section by certified mail within five working days of the date of transfer. The bureau shall schedule and hold a hearing within sixty days of such notification, or in the event of no notification, within sixty days of receiving information which indicates such a transfer may have occurred. At this hearing the bureau shall determine and set responsibility for funding the as yet unpaid costs associated with the retrospective policy year(s) still in the evaluation period.

Effective: 10/05/2005

Promulgated Under: 111.15

Statutory Authority: 4121.12, 4121.121

Rule Amplifies: 4123.29, 4123.34

Prior Effective Dates: 7/1/88, 10/2/90, 7/1/97

(A) An employer participating in retrospective rating will pay the following:

(1) Minimum premium. The minimum premium depends on the hazard group, the per claim limit selected by the employer, the maximum premium limit selected by the employer, and the employer’s base-rated premium or experience-rated premium. The employer’s base-rated premium or experience-rated premium is assumed to be at least the minimum experience-rated/base-rated premium threshold listed on the “retrospective rating minimum premium percentages table”. The minimum premium includes employer contributions to cover safety and hygiene costs, surplus costs, premium payment security costs, and the cost of losses exceeding the per claim and the maximum premium limitations.

(2) Premium based on paid losses. The employer will pay for any compensation payments, including death and permanent total disability, and medical payments made in covered claims. Billings to the employer will be sent annually for ten years to collect for paid losses.

(3) Premium based on reserves. The employer will pay the value of reserves on claims evaluated as of the end of the tenth year.

(B) Surplus charges in claims will not be charged to the employer.

(C) Individual claims costs will be limited to the per claim limit selected by the employer. The usual experience rating limitations will not apply.

(D) The employer’s maximum premium will be limited to a percentage of its base-rated or experience-rated premium as selected by the employer. That is, premiums based on losses and reserves charged to the employer cannot exceed the maximum premium minus the minimum premium.

(E) When an employer leaves a retrospective rating program and returns to the state fund program, the employer shall be subject to all of the provisions of rule 4123-17-03 of the Administrative Code, classification rates.

Effective: 10/05/2005

Promulgated Under: 111.15

Statutory Authority: 4121.12, 4121.121

Rule Amplifies: 4123.29, 4123.34

Prior Effective Dates: 7/1/91, 1/1/93, 7/1/97

The administrator of workers’ compensation, with the advice and consent of the bureau of workers’ compensation board of directors, has authority to approve contributions made to the state insurance fund by employers pursuant to sections 4121.121, 4121.13, 4121.30, 4123.29, and 4123.34 of the Revised Code. The administrator hereby sets the private employer retrospective rating plan minimum premium percentages to be effective for the July 1, 2006, policy year, as indicated in the appendixes A, (Tier I, tables A, B, C, and D) and B (Tier II, tables A, B, C, and D) to this rule.

APPENDIX A

See Appendix at http://www.registerofohio.state.oh.us/pdfs/4123/0/17/4123-17-53_FF_A_APP1_20080708_1650.pdf

Effective: 07/21/2008

Promulgated Under: 111.15

Statutory Authority: 4121.12, 4121.121

Rule Amplifies: 4123.29, 4123.34

Prior Effective Dates: 7/1/91, 7/1/93, 7/1/94, 7/1/97, 7/1/06

The administrator of workers’ compensation, with the advice and consent of the bureau of workers’ compensation board of directors, has authority to approve contributions made to the state insurance fund by employers pursuant to sections 4121.121, 4123.29, and 4123.34 of the Revised Code. The administrator hereby sets the public employer taxing districts retrospective rating plan minimum premium percentages to be effective for the January 1, 2007 policy year, as indicated in the attached appendixes A (Tier I) and B (Tier II).

Appendix A Tier I

Ohio Bureau of Workers’ Compensation

Retrospective Rating

Minimum Premium Percentages

Public Employer

$200,000 $300,000 $400,000 No

Premium Range 150% 200% 150% 200% 150% 200% 150% 200%

25,000 – 29,999 0.87 0.71 0.87 0.71 0.87 0.71 0.87 0.71

30,000 – 34,999 0.84 0.68 0.84 0.68 0.84 0.68 0.84 0.68

35,000 – 39,999 0.81 0.65 0.81 0.65 0.81 0.65 0.81 0.65

40,000 – 44,999 0.79 0.63 0.79 0.63 0.79 0.63 0.79 0.63

45,000 – 49,999 0.77 0.61 0.77 0.61 0.77 0.61 0.77 0.61

50,000 – 54,999 0.75 0.59 0.75 0.59 0.75 0.59 0.75 0.59

55,000 – 59,999 0.73 0.57 0.73 0.57 0.73 0.57 0.73 0.57

60,000 – 64,999 0.72 0.56 0.72 0.56 0.72 0.56 0.72 0.56

65,000 – 69,999 0.70 0.54 0.70 0.54 0.70 0.54 0.70 0.54

70,000 – 74,999 0.69 0.53 0.69 0.53 0.69 0.53 0.69 0.53

75,000 – 79,999 0.68 0.52 0.68 0.52 0.68 0.52 0.68 0.52

80,000 – 84,999 0.66 0.51 0.66 0.51 0.66 0.51 0.66 0.51

85,000 – 89,999 0.65 0.50 0.65 0.50 0.65 0.50 0.65 0.50

90,000 – 94,999 0.64 0.49 0.64 0.49 0.64 0.49 0.64 0.49

95,000 – 99,999 0.64 0.49 0.64 0.49 0.64 0.49 0.64 0.49

100,000 – 112,499 0.62 0.47 0.62 0.47 0.62 0.47 0.62 0.47

112,500 – 124,999 0.60 0.46 0.60 0.46 0.60 0.46 0.60 0.46

125,000 – 137,499 0.59 0.45 0.59 0.45 0.59 0.45 0.59 0.45

137,500 – 149,999 0.57 0.43 0.57 0.43 0.57 0.43 0.57 0.43

150,000 – 162,499 0.56 0.43 0.56 0.43 0.56 0.43 0.56 0.43

162,500 – 174,999 0.54 0.42 0.54 0.41 0.54 0.41 0.54 0.41

175,000 – 187,499 0.53 0.41 0.53 0.40 0.53 0.40 0.53 0.40

187,500 – 199,999 0.53 0.41 0.53 0.40 0.53 0.40 0.53 0.40

200,000 – 224,999 0.51 0.40 0.51 0.39 0.51 0.39 0.51 0.39

225,000 – 249,999 0.50 0.39 0.50 0.38 0.50 0.38 0.50 0.38

250,000 – 299,999 0.48 0.38 0.48 0.37 0.48 0.37 0.48 0.37

300,000 – 349,999 0.46 0.38 0.46 0.36 0.46 0.35 0.46 0.35

350,000 – 399,999 0.44 0.37 0.44 0.35 0.44 0.34 0.44 0.34

400,000 – 499,999 0.43 0.37 0.42 0.34 0.42 0.34 0.42 0.33

500,000 – 999,999 0.40 0.36 0.38 0.33 0.38 0.32 0.37 0.31

1,000,000 – 1,999,999 0.37 0.36 0.35 0.33 0.34 0.31 0.33 0.27

2,000,000 – 2,999,999 0.36 0.36 0.34 0.33 0.32 0.31 0.31 0.25

3,000,000 – 3,999,999 0.36 0.36 0.33 0.33 0.32 0.31 0.30 0.23

4,000,000 – 4,999,999 0.36 0.36 0.33 0.33 0.32 0.31 0.29 0.23

5,000,000 – 5,999,999 0.36 0.36 0.33 0.33 0.31 0.31 0.29 0.22

6,000,000 – 6,999,999 0.36 0.36 0.33 0.33 0.31 0.31 0.29 0.22

7,000,000 – 7,999,999 0.36 0.36 0.33 0.33 0.31 0.31 0.28 0.22

8,000,000 – 8,999,999 0.36 0.36 0.33 0.33 0.31 0.31 0.28 0.22

9,000,000 – 9,999,999 0.36 0.36 0.33 0.33 0.31 0.31 0.28 0.22

10,000,000 – 10,999,999 0.36 0.36 0.33 0.33 0.31 0.31 0.28 0.22

11,000,000 – 11,999,999 0.36 0.36 0.33 0.33 0.31 0.31 0.28 0.22

12,000,000 – 12,999,999 0.36 0.36 0.33 0.33 0.31 0.31 0.28 0.22

Appendix B Tier II

Retrospective Rating

Minimum Premium Percentages

Public Employer

$100,000 Claim Limit $125,000 Claim Limit

Premium Range 150% 150%

25,000 – 29,999 0.87 0.87

30,000 – 34,999 0.84 0.84

35,000 – 39,999 0.81 0.81

40,000 – 44,999 0.79 0.79

45,000 – 49,999 0.77 0.77

50,000 – 54,999 0.75 0.75

55,000 – 59,999 0.73 0.73

60,000 – 64,999 0.72 0.72

65,000 – 69,999 0.70 0.70

70,000 – 74,999 0.69 0.69

75,000 – 79,999 0.68 0.68

80,000 – 84,999 0.66 0.66

85,000 – 89,999 0.65 0.65

90,000 – 94,999 0.64 0.64

95,000 – 99,999 0.64 0.64

100,000 – 112,499 0.62 0.62

112,500 – 124,999 0.60 0.60

125,000 – 137,499 0.59 0.59

137,500 – 149,999 0.57 0.57

150,000 – 162,499 0.57 0.56

162,500 – 174,999 0.55 0.55

175,000 – 187,499 0.55 0.54

187,500 – 199,999 0.54 0.53

200,000 – 224,999 0.53 0.52

225,000 – 249,999 0.52 0.51

250,000 – 299,999 0.51 0.49

300,000 – 349,999 0.50 0.48

350,000 – 399,999 0.49 0.47

400,000 – 499,999 0.48 0.46

500,000 – 999,999 0.46 0.43

1,000,000 – 1,999,999 0.45 0.42

2,000,000 – 2,999,999 0.44 0.41

3,000,000 – 3,999,999 0.44 0.41

4,000,000 – 4,999,999 0.44 0.41

5,000,000 – 5,999,999 0.44 0.41

6,000,000 – 6,999,999 0.44 0.41

7,000,000 – 7,999,999 0.44 0.41

8,000,000 – 8,999,999 0.44 0.41

9,000,000 – 9,999,999 0.44 0.41

10,000,000 – 10,999,999 0.44 0.41

11,000,000 – 11,999,999 0.44 0.41

12,000,000 – 12,999,999 0.44 0.41

Effective: 07/21/2008

Promulgated Under: 111.15

Statutory Authority: 4121.12, 4121.121

Rule Amplifies: 4123.29, 4123.34

Prior Effective Dates: 1/1/92, 1/1/93, 1/1/94, 1/1/98, 1/1/07

(A) Grant monies for development of a transitional work program.

Pursuant to section 4123.29 of the Revised Code and rule 4123-18-06 of the Administrative Code, the administrator may grant monies to employers who wish to implement a transitional work program as set forth in this rule and rule 4123-18-06 of the Administrative Code. An employer is eligible for a transitional work program development grant only one time per policy number, except that an employer with more than 500 employees is eligible for up to three grants per policy number. The administrator may waive the requirement that the employer have 500 employees for the employer to be eligible for more than one grant per policy number. Only private state fund employers and public employer taxing district employers are eligible for these grants. Grant amounts will be based on the complexity of services needed as indicated in a proposal for transitional work services. Factors which may determine appropriate grant amounts may include the employer’s number of:

(1) Employees;

(2) Job classifications;

(3) Job analyses needed; and

(4) Collective bargaining units.

(B) The bureau shall evaluate the employer’s eligibility to receive a transitional work program development grant as outlined in this rule.

(1) Employers may request a proposal from the list of transitional work developers from the bureau and then solicit proposals from these developers.

(2) The bureau shall not reimburse the employer or the transitional work developers for costs associated with preparing and submitting a proposal to an employer.

(3) The employer shall select one proposal to submit to the bureau for determining transitional work program development grant eligibility. The bureau shall not reimburse the employer for costs not deemed eligible.

(4) The bureau shall provide the employer with grant monies for eighty per cent of the costs associated with developing the transitional work program by only bureau-certified transitional work developers. The employer shall directly reimburse the transitional work developers for the developers’ services.

(C) The bureau may monitor the employer’s and the transitional work developer’s content and implementation of transitional work services.

HISTORY: Eff 1-1-01; 4-22-02

Rule promulgated under: RC 111.15

Rule authorized by: RC 4121.121, 4121.12

Rule amplifies: RC 4123.29, 4123.34

(A) Pursuant to section 4121.37 of the Revised Code, the administrator may establish a program of safety grants for safety intervention, equipment, assistance, and research for eligible employers who participate in the safety grant program under this rule. The safety grant program may include grants to an employer to provide funds for education, training, research, and prevention of injuries and illnesses to purchase equipment to reduce the number and severity of workplace injuries and illnesses.

(B) The bureau shall determine whether the employer is eligible for the safety grant program under this rule. The bureau may limit participation in the safety grant program based upon the availability of bureau resources for the program and upon the merits of the employer’s proposal. The safety grant program is available only to a private state fund employer, a public employer taxing district, a marine industry fund employer, or a coal-workers’ pneumoconiosis fund employer that satisfies the following criteria:

(1) The employer shall have and shall maintain continuous active state fund coverage to participate in the safety grant program.

(2) For grants to an employer to provide funds for the research and prevention of workplace injuries, illnesses, and fatalities, the employer shall submit to the bureau an application to the bureau with its proposal for participation in the safety grant program. The employer shall demonstrate a need for safety intervention.

(C) The bureau will assess whether the employer is eligible to participate in the safety grant program under this rule.

(1) If the employer requests to participate in the safety intervention equipment portion of the safety grant program, the owner, chief executive officer, chief financial officer or persons having fiduciary responsibilities with the employer shall meet with a bureau safety and hygiene consultant if required to review the safety grant program application.

(2) The bureau shall assess the employer’s safety and loss control proposal and shall review the safety grant program application, including the baseline assessment of the worksite provided in the application. If the bureau accepts the employer into the safety grant program, the employer shall submit quarterly and yearly reporting to the bureau for a period of two years following the purchase and implementation of the safety equipment. The employer will develop an implementation strategy plan for the safety grant program.

(3) The bureau and employer shall enter into a written agreement detailing the rights, obligations, and expectations of the parties for performance of the safety grant program.

(4) The employer may not apply for a safety grant for previously purchased equipment.

(5) The employer shall purchase all safety intervention equipment within three months from the date that the bureau disburses the grant funds to the employer. The purchase cannot take place before the disbursement of the grant funds.

(6) The employer shall provide to the bureau a list of claims that have been filed in the last two years.

(7) The employer shall agree to not eliminate jobs or reduce employment due to the safety grant purchase.

(D) The bureau may meet with the owner, chief executive officer, chief financial officer, or persons having fiduciary responsibilities with the employer to evaluate the employer’s progress in the safety grant program. The employer shall provide the bureau access to records or personnel to conduct research into the effectiveness of the safety grant program.

(E) An employer who complies with the requirements of the safety grant program under this rule shall be eligible to receive a grant from the bureau as provided in the written agreement.

(1) The bureau may establish by written agreement with the employer the maximum amount of the safety grant program grant.

(2) The bureau may establish by written agreement with the employer a requirement for matching funds from the employer in a ratio to be determined by the bureau.

(3) The bureau shall monitor the employer’s use of the safety grant program grant and may recover the entire grant if the bureau determines that the employer has not used the grant for the purposes of the safety grant program or has otherwise violated the written agreement on the safety grant program.

(F) Reconsideration of determination of eligibility.

(1) An employer may request reconsideration from a decision finding the employer did not meet the requirements provided in paragraphs (B) (1) and (2) of this rule. The request must be in writing and filed with the superintendent of the division of safety and hygiene within thirty days of the notification of the decision.

(2) The employer may submit a request for reconsideration of the superintendent’s decision to the adjudicating committee.

(3) The adjudicating committee shall consider the request and make a recommendation on the employer’s eligibility to the administrator.

(4) The decision of the administrator shall be final.

(G) Upon the approval and purchase of the safety intervention equipment, the employer shall provide to the bureau documentation on the use of the funds, including submission of original paid itemized invoices, proof of payment, proof of the employer’s contribution, and cancelled checks that demonstrate the employer spent all safety grant funds toward the approved purchase of ergonomic, safety equipment, industrial hygiene equipment, or equipment to prevent coal-workers’ pneumoconiosis.

(H) The bureau shall evaluate the research data from the safety grant program on a periodic basis. The bureau may publish reports of the research to assist employers in preventing workplace injuries and illnesses.

(I) The bureau shall evaluate the research data from the safety grant program on a periodic basis. The bureau may publish reports of the research to assist employers in preventing workplace injuries and illnesses.

(J) Marine industry fund and coal-workers’ pneumoconiosis fund safety grants.

(1) A marine industry fund employer or a coal-workers’ pneumoconiosis fund employer applying for a safety grant is subject to paragraphs (A) through (I) of this rule.

(2) The bureau safety and hygiene division shall determine whether the marine industry fund employer or the coal-workers’ pneumoconiosis fund employer is eligible for the safety grant program under this rule. The safety grant program in this rule is available only to a marine industry fund or a coal-workers’ pneumoconiosis fund employer that satisfy the following criteria:

(a) A marine industry fund employer shall have and shall maintain continuous active state fund coverage under rule 4123-17-19 of the Administrative Code

(b) A coal-workers’ pneumoconiosis fund employer shall have and shall maintain continuous active state fund coverage under rule 4123-17-20 of the Administrative Code.

(c) The marine industry fund employer or the coal-workers’ pneumoconiosis fund employer shall have active coverage under their respective funds effective January 1, 2006.

(3) The bureau shall provide safety grants under this rule as follows:

(a) The marine industry fund employer or the coal-workers’ pneumoconiosis fund employer shall use the safety grant only to purchase equipment to substantially reduce or eliminate the potential for workplace injuries, illnesses, and fatalities.

(b) A coal-workers’ pneumoconiosis fund employer may use the safety grant to purchase equipment to prevent coal-workers’ pneumoconiosis.

(4) Additional employer responsibilities include:

(a) A marine industry fund employer or a coal-workers’ pneumoconiosis fund employer shall contact the local bureau customer service office to schedule a visit by a bureau safety consultant.

(b) A coal-workers’ pneumoconiosis fund employer shall also schedule a visit by a mine safety inspector from the Ohio department of natural resources.

Replaces: 4123-17-56

Effective: 07/01/2006

Promulgated Under: 111.15

Statutory Authority: 4121.12, 4121.121

Rule Amplifies: 4123.29, 4123.34

Prior Effective Dates: 9/21/98, 7/1/99

(A) As used in this rule:

(1) As defined in division (F)(3) of section 4123.34 of the Revised Code, “construction industry” includes any activity performed in connection with the erection, alteration, repair, replacement, renovation, installation, or demolition of any building, structure, highway, or bridge. The manual classifications satisfying this definition are listed in paragraph (E) of this rule.

(2) “Construction industry employer” is an employer that reports payroll of a construction industry employee for work performed in a construction industry manual classification as defined in paragraph (E) of this rule.

(3) “Construction industry employee” is any employee as defined in division (A) of section 4123.01 of the Revised Code who performs work and whose payroll is properly reported in a construction industry manual classification as defined in paragraph (E) of this rule.

(B) Pursuant to division (F) of section 4123.34 of the Revised Code, the administrator shall determine the premium rates for construction industry employees for payroll paid beginning January 1, 1995, in accordance with the limitations provided in this rule.

(C) A construction industry employer shall report the actual remuneration paid to its construction industry employees, except that for payroll paid beginning January 1, 1995, the reportable payroll shall not exceed on a weekly basis an amount as provided in division (F) of section 4123.34 of the Revised Code. This limitation applies only to the construction industry employees of the construction industry employer, and does not apply to employees of a construction industry employer whose payroll is not reported in a construction industry manual classification as defined in paragraph (E) of this rule.

(D) The construction industry employer shall maintain records to verify the weekly wages paid to construction industry employees. The payroll limitation for construction industry employees shall apply to weekly payroll, regardless of the hourly or daily remuneration. If upon audit the construction industry employer is unable to document payroll records of an employee on a weekly basis, the bureau shall establish the payroll by the actual remuneration for the payroll reporting period, subject to the maximum limitation as provided in division (F) of section 4123.34 of the Revised Code times the number of weeks in the payroll reporting period.

(E) The payroll limitation of this rule shall apply only to the following construction industry manual classifications of a construction industry employer: all of the manual classifications in industry group four, except for manual classification 9009, as provided in the credibility table used for experience rating, table one, part B, of rule 4123-17-05 of the Administrative Code. The bureau shall periodically review the manual classifications satisfying the definition of construction industry, and any reclassifications, changes, deletions, or additions to the bureau’s manual classifications or industry groups may result in additions or deletions of manual classifications from this rule.

(F) The payroll limitation of this rule shall apply to premium of the construction industry employer for construction industry employees reported under the manual classifications listed in paragraph (E) of this rule. The payroll limitation also applies to the administrative cost and disabled workers’ relief fund assessments, and for such purposes the construction industry employer shall report the remuneration of the construction industry employees as provided in paragraph (C) of this rule.

(G) For a construction industry employee who is also an officer of a corporation, a sole proprietor, partnership, or member of a family farm corporation, and whose payroll is subject to a payroll limitation by rules 4123-17-07 and 4123-17-30 of the Administrative Code, any additional payroll limitations of this rule also may apply.

(H) If upon audit or reclassification of payroll the bureau determines that the payroll of an employee has been improperly classified in a construction industry manual classification and the new or proper manual classification is not a construction industry classification as defined in paragraph (E) of this rule, the bureau shall establish the premium due based upon the full actual remuneration of the employee.

HISTORY: Eff 1-1-95

Rule promulgated under: RC 111.15

Rule authorized by: RC 4121.12, 4121.30

Rule amplifies: RC 4123.34

Pursuant to division (E) of section 4123.34 of the Revised Code, the administrator may grant a discount on premium rates to an eligible employer that meets the drug-free workplace (DFWP) program requirements under the provisions of this rule.

(A) As used in this rule:

(1) “Drug-free workplace program” or “DFWP program” means the bureau’s rate program which offers a premium discount to eligible employers for implementing a program addressing workplace use and abuse of alcohol and other drugs, including prescription, over-the-counter, and illegal drug abuse.

(2) “Prescription drug abuse” means the use of over-the-counter drugs or medications prescribed by a licensed medical practitioner by someone other than the person for whom they were prescribed or for purposes other than those for which they were prescribed or manufactured.

(3) “Accident” means an unplanned, unexpected, or unintended event which occurs on the employer’s property, during the conduct of the employer’s business, or during working hours, or which involves employer-supplied motor vehicles or motor vehicles used in conducting the employer’s business, or within the scope of employment, and which results in any of the following:

(a) A fatality of anyone involved in the accident;

(b) Bodily injury requiring off-site medical attention away from the employer’s place of employment;

(c) Vehicular damage in apparent excess of a dollar amount stipulated in the employer’s DFWP policy; or

(d) Non-vehicular damage in apparent excess of a dollar amount stipulated in the employer’s DFWP policy.

As used in this rule, “accident” does not have the same meaning as provided in division (C) of section 4123.01 of the Revised Code, and the definition of this rule is not intended to modify the definition of a compensable injury under the workers’ compensation law.

(4) “Reasonable suspicion” means evidence that an employee is using drugs or alcohol in violation of the company’s DFWP policy, drawn from specific, objective facts and reasonable inferences drawn from these facts in light of experience and training. Such facts and inferences may be based on, but are not limited to, any of the following:

(a) Observable phenomena, such as direct observation of drug or alcohol use, possession or distribution, or the physical symptoms of being under the influence of drugs or alcohol, such as but not limited to slurred speech, dilated pupils, odor of alcohol or marijuana, changes in affect, dynamic mood swings, etc.;

(b) A pattern of abnormal conduct, erratic or aberrant behavior, or deteriorating work performance (e.g., frequent absenteeism, excessive tardiness, recurrent accidents) which appears to be related to substance abuse and does not appear to be attributable to other factors;

(c) The identification of an employee as the focus of a criminal investigation into unauthorized drug possession, use, or trafficking;

(d) A report of alcohol or other drug use provided by a reliable and credible source;

(e) Repeated or flagrant violations of the company’s safety or work rules, which are determined by a supervisor to pose a substantial risk of physical injury or property damage and which appear to be related to substance abuse or substance use that may violate the employer’s DFWP policy, and do not appear attributable to other factors.

(5) “Random selection” means drug testing of an employee selected from a pool of employees made regardless of whether any suspicion of illegal drug use exists. This testing is made without advanced notice to the employee and is based on an equal probability of selection. Random selection testing is based upon an objective and non-discretionary computer program operated and maintained by an outside contractor to identify and test a specified percentage of the total workforce over the course of a year. All employees, including those previously selected for testing, have an equal chance of being selected each time the testing process occurs, such that some employees may be selected more than once for random selection testing while other employees may not be selected at all.

(6) “Safety-sensitive position or function” means any job position or work-related function or job task designated as such by the employer, which through the nature of the activity could be detrimental or dangerous to the physical well-being of the employee, co-workers, customers or the general public through a lapse in attention or judgment. The safety-sensitive position or function may include positions or functions where national security or the security of employees, co-workers, customers, or the general public may be seriously jeopardized or compromised through a lapse in attention or judgment.

(7) “Supervisor” means an employee who supervises others in the performance of their jobs, has the authority and responsibility to initiate reasonable suspicion testing when it is appropriate, and has the authority to recommend or perform hiring or firing procedures.

(8) “Ohio Department of Alcohol and Drug Addiction Services” or “ODADAS” means the state agency an employer may contact to provide technical assistance or referral to available community resources for employers interested in developing a DFWP program. ODADAS shall maintain a list of DFWP developmental consultant programs meeting specified criteria and offering training to assist employers in developing a DFWP program. Such training shall be experience equivalency for purposes of this rule.

(9) “Experience equivalency” means consultation and training services offered through a program which facilitates the development of an employer’s DFWP program and may qualify the employer to receive a higher discount based on the program level implemented in conjunction with this experience equivalency credit.

The criteria for a program to be an experience equivalency shall include:

(a) All primary consultants for the organization shall have a minimum of ten hours annual continuing education in drug-free workplace issues;

(b) The organization shall have provided drug-free workplace policy and operational procedures development consultation and training for a period of at least two years; and

(c) For purposes of this rule, the organization shall provide a certificate only to an employer that completes a minimum of fifteen hours of face-to-face consultation and training and a minimum of twenty additional hours developing the employer’s drug-free workplace policy and program operations.

(10) “Employee assistance plan” means an employer’s plan of action and designated appropriate resources to assist employees who:

(a) Seek help on their own for an alcohol or drug problem;

(b) Are referred by management for a possible problem with alcohol or drugs; or

(c) Have a positive alcohol or drug test.

(11) “Employee assistance program” or “EAP” means a cost-effective program to assist employees and their families in dealing with problems affecting their work performance. An EAP identifies and helps resolve problems by applying short-term counseling, referral, and follow-up services, as determined by the contractual arrangement with the employer. In addition, the EAP provides such services as management training and consultation; prevention and education programs; crisis intervention; benefits analysis; and organizational development. A qualified EAP is one recognized by industry standards which employs certified personnel and operates in compliance with core-technology specific to the EAP discipline. An “employee assistance program” is to be distinguished from an “employee assistance plan,” which is used generically by employers offering a composition of assistance services for employees but which do not adhere to the core technology of the EAP field, as defined by the employee assistance professional association (EAPA).

(12) “Drug and alcohol testing” means a range of tests that may be utilized to address employee use or abuse of alcohol and other drugs that affect workplace safety. These tests include pre-employment or new hire testing to screen from the workforce persons with existing substance use or abuse problems that may affect workplace safety; post-accident testing, for employees who may have caused or contributed to an accident due to use or abuse of alcohol or other drugs; reasonable suspicion testing, which utilizes observations from trained supervisors to identify employees whose behavior suggests use or abuse of alcohol or other drugs that may endanger the employee or other employees; and random drug testing to identify employees who use alcohol or other drugs in contravention of the employer’s DFWP policy, with such testing likely to deter substance abuse because employees will not know whether or when they might be tested. The five drugs that are included in the drug testing are amphetamines, cannabinoids (THC), cocaine (including crack), opiates, and phencyclidine (PCP).

(13) “Consortia” means an entity established to provide more cost-effective services to employers to help the employers meet the DFWP program requirements. Consortia may involve varied pools of employers and their employees, wherein employer education, supervisor training, and drug and alcohol testing may be offered at a reduced cost to the employers who choose to participate. Consortia for drug and alcohol testing purposes may involve contracts with laboratories certified by the department of health and human services and will operate in concert with established protocols and procedures that are consistent with federal guidelines for testing.

(14) “Vendor” means any person or organization that provides service to employers participating in the DFWP program for purposes of employers meeting DFWP program requirements.

(B) Application process.

The bureau shall provide application and renewal forms for use in the DFWP program and shall have final authority to approve a state fund employer to receive a discount based on its participation in this program. An employer’s participation in a DFWP program shall be on a program year basis, as shall renewal of participation in a DFWP program. Only state fund employers requesting consideration for the DFWP program discount should submit an application. The bureau shall evaluate each application to determine the employer’s eligibility to receive a discount under the DFWP program, the employer’s eligibility for a specific program level, and the applicable discount per cent.

(1) A private employer may apply either by June thirtieth for the program year beginning July first of that year to June thirtieth of the following year, or by December thirty-first for the program year beginning January first of the following year to December thirty-first of that year. The progress report and renewal deadlines are March thirty-first for a program year that begins on July first, and September thirtieth for a program year that begins on January first.

(2) A public employer taxing district may apply by December thirty-first prior to the program year beginning January first of the following year to December thirty-first of that year. The progress report and renewal deadlines are September thirtieth for a program year beginning January first.

(3) An employer may withdraw its application for enrollment in the DFWP program under this rule at any time prior to receiving the discount on its premium. When an employer becomes aware that it is unable to meet the program requirements associated with its approved DFWP program level by the required implementation date, the employer shall notify the bureau of its inability and shall withdraw from the program. The employer shall return any monetary benefits associated with any discount received, including interest, which shall be calculated as provided in division (E) of section 4123.41 of the Revised Code.

(C) Eligibility requirements.

The DFWP program under this rule is available in the form of technical assistance and support to all private and public employers. However, eligibility for the discount is limited to state fund employers, with the per cent of discount based on an employer’s participation in one or more alternate rating programs. A state fund employer seeking a discount shall apply on a bureau application form to implement a DFWP program and shall satisfy all of the eligibility requirements of this rule. The bureau shall review the application to determine whether the employer is eligible to receive a discount for participation in the DFWP program, determine whether the employer is eligible for the level of program applied for, and determine and approve the discount percentage for the level of program for which the employer is determined to be eligible. An employer that is found to be ineligible for participation in the DFWP program may reapply in a subsequent program year. It is recognized that an employer may implement a DFWP program that exceeds the minimum requirements for the discount level approved by the bureau. For all levels of a DFWP program, the employer shall meet the following eligibility requirements:

(1) If an employer participates in any other alternate rating program offered by the bureau at the same time as the employer participates in the DFWP program, the employer may participate in the DFWP program and may receive the discount provided for under this rule in addition to the benefit for participating in the other alternative rating program, subject to the provisions and restrictions below:

(a) An employer participating in both retrospective rating under rules 4123-17-41 to 4123-17-54 of the Administrative Code and the DFWP program may only receive a premium discount equal to the maximum of either the discount under the DFWP program or the difference between the employer’s premium calculated as an individual employer and calculated in the retrospective rating program.

(b) An employer participating in group rating under rules 4123-17-61 to 4123- 17-68 of the Administrative Code or in group retrospective rating under rule 4123-17-73 of the Administrative Code and that participates in the DFWP program during a given program period is not eligible for a DFWP discount in addition to the benefit for participating in either of these other alternative rating programs

(c) An employer participating in the deductible program under rule 4123-17-72 of the Administrative Code and the DFWP program may implement the DFWP program under this rule and receive the associated premium discounts in addition to the deductible benefit.

(d) An employer that has an existing substance-free program that has been in place for four or more years at the time of application and is evaluated as comparable to the level one program under this rule is not eligible for a discount under this rule.

(e) An employer not eligible for a discount under this rule may implement a DFWP program and is encouraged to do so. The bureau and ODADAS will identify available resources for support and technical assistance.

(2) The employer shall be current as of March thirty-first for the application year beginning July first, or September thirtieth for the application year beginning January first, and subsequent renewal years (not more than forty-five days past due) on any and all premiums, assessments, penalties or monies otherwise due to any fund administered by the bureau, including amounts due for retrospective rating at the time of the application deadline.

(3) The employer cannot have cumulative lapses in workers’ compensation coverage in excess of forty days within the twelve months preceding the application or renewal deadline.

(4) The employer shall be in an active or reinstated policy status the first day of the policy year for the DFWP program.

(5) An employer in the DFWP program shall continue to meet all eligibility requirements during the year of participation in the program, when applying for renewal, and during each subsequent year of participation in the program, regardless of the level of the employer’s DFWP program.

(D) General program requirements.

In signing the application form, the chief executive officer or designated management representative of the employer shall certify that the employer shall meet, at a minimum, the program requirements associated with the level DFWP program for which the employer has applied. This certification is required for the employer to be considered for the discount associated with implementing the specific level DFWP program, and the signature certifies that the employer shall return any monetary benefits associated with any discount received, including interest, based on failure to implement or meet the DFWP program level requirements for which it has applied and been approved.

(1) An employer approved by the bureau for a DFWP program that does not have an existing substance-free workplace program at the time of application or that has a program in place for less than one year, may receive a maximum of five years of discount under this rule.

(2) An employer that has an existing substance-free workplace program at the time of application for at least one year but less than four years that is evaluated as comparable to the level one program under this rule may receive a maximum of four years of discount under this rule.

(E) Program requirements – all program levels.

To receive a discount for implementing and operating a DFWP program, an employer shall fully implement, at a minimum, the following program components by the applicable dates.

(1) Policy – The DFWP program shall include a written policy statement, which, at a minimum, shall consist of the following:

(a) Articulate all the elements of the level DFWP program which the employer is implementing;

(b) State management’s incentive for creating a substance-free workplace (e.g., concern for employee safety and health, productivity, accident prevention, and loss control);

(c) Identify a DFWP program administrator and indicate the person’s role or responsibilities with regard to the DFWP program;

(d) Communicate the DFWP program and policy through initial presentation to all employees prior to the program implementation and/or on a repetitive basis annually through employee education sessions;

(e) Clearly state that the program applies to all employees, including all levels of management;

(f) Contain appropriate references to collective bargaining agreements and show how the DFWP program works in concert with these agreements to promote a safer workplace for all employees;

(g) Address the use or abuse of alcohol, prescription medications, over-the-counter medications, or illegal drugs. The policy should include which drug or alcohol tests will be used, at what cutoff levels and what testing procedures and protocols will be applied; and a clear statement that supervisors will be trained regarding their responsibilities related to various testing prior to the implementation of any testing;

(h) Include a commitment to rehabilitation;

(i) Describe how referrals may be made for testing, assessment, and employee assistance;

(j) Be in compliance with all federal and state laws or regulations;

(k) State what is prohibited and the consequences for employees of a violation of this policy;

(l) State the consequences, if any, for an employee’s refusal to submit to a medical examination or a drug or alcohol test in conjunction with the operation of the employer’s DFWP program;

(m) State the consequences for any employee attempting to adulterate a specimen or otherwise manipulate the drug or alcohol testing process;

(n) State that law enforcement authorities may be contacted and requested to come onto the employer’s property when appropriate in conjunction with a referral for criminal prosecution;

(o) Contain a statement that nothing in the policy alters the employment-at-will status as it affects any other employment issues with the employer;

(p) State that an employee’s violation under the DFWP policy shall not be reported to law enforcement officials unless required by a regulatory body or by criminal law provisions; and

(q) Include a discussion of confidentiality of the program records to ensure the privacy rights of individuals.

(2) Employee education – The DFWP program shall include employee education, which, at a minimum, shall consist of the following:

(a) A total of at least two hours annually for all current employees prior to implementation of the DFWP program, and at least annually thereafter for each program year in which the employer operates a DFWP program, and with at least one hour for all new employees within the employee’s first four weeks of employment;

(b) Inform employees about the content of the DFWP program as delineated in the written policy, a copy of which will be presented, discussed and acknowledged by each employee’s signature on an appropriate form;

(c) Stress management’s commitment to the program;

(d) Include the disease model for alcohol and other drugs, the signs and symptoms associated with substance use and abuse, and the effects and dangers of commonly used drugs in the workplace;

(e) Share a list of helping resources in the community for employees to utilize for themselves or their families; and

(f) Be presented by a qualified educator or a presenter supervised by a qualified educator holding one of the following credentials:

(i) Substance abuse professional (SAP);

(ii) Certified employee assistance professional (CEAP);

(iii) Certified chemical dependency counselor (CCDCIII);

(iv) Ohio certified prevention specialist 1 (OCPS 1); or

(v) Ohio certified prevention specialist 2 (OCPS 2).

(3) Supervisor training – The DFWP program shall include supervisor training, which, at a minimum, shall consist of the following:

(a) At least four hours of initial training for all current and new supervisors (with at least two hours of training within six weeks of a current employee becoming a supervisor or from the date of hire of a supervisor), in addition to the annual two hours of employee education, for a total of six hours annually;

(b) In subsequent program years, a minimum of two hours of refresher training for supervisors who have received the initial four hours of training, which is in addition to the annual two hours of employee education, for a total of four hours;

(c) A discussion of a supervisor’s responsibilities in relationship to the employer’s DFWP program, including but not limited to how to recognize a possible alcohol or other drug problem; how to document behaviors that demonstrate an alcohol or other drug problem; how to confront employees with the problem in terms of their observed behaviors; how to initiate reasonable suspicion testing; how to make an appropriate referral for assistance; how to follow up with employees re-entering the work setting after a positive drug test; and how to handle DFWP program responsibilities in a manner that is consistent with any pertinent collective bargaining agreements; and

(d) Be presented by a qualified trainer or a presenter supervised by a qualified trainer holding one of the credentials provided in paragraphs (E)(2)(f)(i) to (E)(2)(f)(v) of this rule.

(4) Drug and alcohol testing – The DFWP program shall include drug and alcohol testing which, at a minimum, shall consist of a five-panel drug screen with gas chromatography/mass spectrometry (GC/MS) and alcohol testing consistent with federal standards. The employer shall implement and pay for drug and alcohol testing as follows, with the stipulation that all categories of testing shall be clearly described and defined in the employer’s written policy.

(a) Pre-employment/new-hire testing: at one hundred per cent (drug test required), with testing to be conducted before or within the first ninety days of employment;

(b) Post-accident: All employees who may have caused or contributed to an on-the-job accident, as defined in paragraph (A)(3) of this rule, shall submit to a drug or alcohol test. This test will be administered as soon as possible after necessary medical attention is received, or within eight hours for alcohol and within thirty-two hours for other drugs.

(c) Reasonable suspicion testing based on documentation and concurrence among the trained observing supervisor and a second trained supervisor, wherever possible.

(d) Follow-up testing, for any employee with a positive test, commencing with a return-to-duty test as the first in a minimum of four tests over the period of a year from the date of return to duty for such employee where the employer brings the employee back to work or returns the employee to a safety-sensitive position or function after a positive test; no set maximum during the first year that begins with the date of return to duty. A maximum number of tests after the first year from date of return to work are to be determined by agreement between the employee, the substance abuse professional assessing or treating the employee, and the employer.

For the purposes of the DFWP program, the forms of testing to be utilized will be urinalysis (EMIT screen, also referred to as a drug screen, plus GC/MS confirmation) for a panel of five drugs, and breath or saliva with a confirmatory evidential breath test (EBT) for alcohol. However, if an EBT is not available or reasonably accessible, a blood test should be made available to the employee to determine the presence of alcohol. The employer is required to document and maintain on file the reason the EBT was not administered. To ensure the integrity of testing and for the safety of employees, participating companies must adopt the procedures and chain-of-custody guidelines recommended by the federal department of health and human services (DHHS) and required by the federal department of transportation. Employers shall ensure that DHHS certified laboratories process the test results, and that a qualified medical review officer is responsible for evaluating all test results.

Supervisors shall receive training regarding their responsibilities related to various testing prior to implementation of testing. Cut-off levels shall be clearly stated in the written policy, along with the procedures or protocols, such as chain of custody, that define the testing process.

(5) Employee assistance – The DFWP program shall include an employee assistance plan as defined in paragraph (A)(10) of this rule for levels 1 and 2 DFWP programs, or an EAP as defined in paragraph (A)(11) of this rule for a level 3 DFWP program. Upon an employee’s positive test, in addition to any corrective action deemed appropriate, the employer shall explain to the employee what a substance abuse assessment is and, by way of referral, shall provide a list containing names and addresses of qualified substance abuse assessment resources who can administer an assessment.

The specifics of the employee assistance plan as well as any requirements for which the employer contracts with a provider are dependent upon the level DFWP program which the employer implements.

(6) Other – The DFWP program may contain other provisions related to specific program requirements that do not fall into one of the five basic program components.

(7) An employer may use a vendor for any of the following: to develop its DFWP program policy under paragraph (E)(1) of this rule; for an educator or presenter supervised by an educator for employee education under paragraph (E)(2) of this rule; for a trainer or presenter supervised by an educator for supervisor training under paragraph (E)(3) of this rule; for drug and alcohol testing under paragraph (E)(4) of this rule; or for employee assistance under paragraph (E)(5) of this rule.

(a) For an employer to use the services of a vendor under this rule, the vendor, if required by law to possess workers’ compensation coverage, either:

(i) Shall be a current participant in the bureau’s DFWP program under this rule;

(ii) Shall have completed all of the vendor’s years of eligible discount in the DFWP program and shall still maintain a DFWP program comparable to the DFWP program under this rule; or

(iii) If the vendor has applied to the DFWP program under this rule but the bureau has determined the vendor to be ineligible for the program based upon the provisions of paragraph (C)(1)(e) of this rule, shall develop and maintain a DFWP program comparable to the DFWP program under this rule.

(b) If the vendor has applied to the DFWP program under this rule but the bureau has determined the vendor to be ineligible for the program based upon any of the provisions of paragraph (C)(2), (C)(3), or (C)(4) of this rule, the employer may not use the vendor in the DFWP program to develop its DFWP program or meet any of the DFWP program requirements under this rule.

(8) The bureau may establish and administer consortia for the purpose of more effective program administration and reduced costs for employers participating in the DFWP program under this rule. Consortia will allow the bureau to develop pools to offer groups of employers and their employees the employee awareness information for the employer education requirement of paragraph (E)(2) of this rule, the skill building training requirement of paragraph (E)(3) of this rule, and to pool random testing and other drug and alcohol testing services for the drug testing requirements of paragraph (E)(4) of this rule. The bureau will develop the criteria that will govern how the consortia will operate.

(F) Additional level-specific program requirements.

In addition to the general requirements of paragraph (E) of this rule applicable to all employers participating in the DFWP program and receiving a discount, this paragraph of this rule describes additional specific program requirements for the various levels of the DFWP program.

(1) Level 1 DFWP program.

To receive a discount for a level 1 DFWP program, an employer shall meet all of the general requirements of paragraph (E) of this rule.

(2) Level 2 DFWP program.

To receive a discount for a level 2 DFWP program, an employer shall apply for level 2 DFWP program and, after the first full program year, shall have had a level 1 DFWP program in place for at least one year, shall demonstrate to the satisfaction of the bureau proficiency and readiness to implement a level 2 DFWP program through a documented safety program that is already in place, or shall either have an existing comparable level 1 substance-free workplace program in place or demonstrate its proficiency and readiness to implement a level 2 DFWP program through documented experience equivalency from a program offering employer DFWP development training that has met the criteria specified in paragraph (A)(9) of this rule and is on the list maintained by ODADAS, or shall be a participant in a consortium that meets the requirements established by the bureau pursuant to paragraph (A)(13) of this rule. The employer shall fully implement the program components detailed in paragraph (E) of this rule, and in addition shall implement the following:

(a) In addition to the drug and alcohol testing DFWP program requirements of paragraph (E)(4) of this rule, the employer shall include random drug testing of ten per cent of the employer’s workforce each program year, as shall be clearly described and defined in the employer’s DFWP policy. For public employers, random drug testing applies only to safety-sensitive positions or functions, as defined by the employer in the DFWP policy and paragraph (A)(5) of this rule.

(b) In addition to the employee assistance plan DFWP program requirements of paragraph (E)(5) of this rule, the employer shall have pre-established a relationship for assessment which allows for a three-way exchange of information, with the appropriate consent, among the employee, employer, and provider. A first positive drug or alcohol finding shall result in a direct referral for assessment rather than just providing a list of names and addresses of qualified substance abuse assessment resources, unless otherwise defined within the DFWP policy for specific employment positions. In addition, the employer shall identify in the policy who will pay for the services associated with an assessment.

(c) The employer shall implement five steps of the bureau’s ten step business plan under rule 4123-17-70 of the Administrative Code during the first program year in which it operates a level 2 DFWP program.

(3) Level 3 DFWP program.

To receive a discount for a level 3 DFWP program, an employer shall apply to implement a level 3 DFWP program; shall have conducted a DFWP program at level 1, 2, or 3 for two full years, and shall have met the renewal requirements. The employer shall fully implement the program components detailed in paragraph (E) of this rule, and in addition shall implement the following:

(a) In addition to the drug and alcohol testing DFWP program requirements of paragraph (E)(4) of this rule, the employer shall include random drug testing of twenty-five per cent of the employer’s entire workforce each program year. For public employers, random drug testing applies only to safety-sensitive positions or functions, as defined by the employer in the DFWP policy and paragraph (A)(5) of this rule.

(b) In addition to the employee assistance plan DFWP requirements of paragraphs (E)(5) and (F)(2)(b) of this rule, the employer shall offer employees health care coverage which includes chemical dependency counseling and treatment services.

(c) At level 3, the employer shall implement all ten steps of the bureau’s ten step business plan under rule 4123-17-70 of the Administrative Code.

(G) Progress reporting and renewal requirements.

If the bureau determines that an employer is eligible to implement a DFWP program, the employer shall comply with the following requirements for initial participation, and renewal of annual participation in the DFWP program. In order to qualify for renewal, an employer shall have implemented all of the program requirements associated with the DFWP program level for which a discount was obtained by the appropriate implementation date.

(1) The employer shall permit the bureau or its designee access to the employer’s job sites for on-site audit of the employer’s DFWP program components, related records and documentation. The employer shall sign a “release of information form” for compliance monitoring and cost-benefit analysis purposes which authorizes the bureau to have access to various aggregate information from drug testing laboratories, medical review officers and the employee assistance plan or employee assistance program.

(2) By the end of the first quarter of the program year or a subsequent date established by the bureau, for the first year of an employer’s DFWP program, the chief executive officer or designated management representative of the employer shall certify on a form provided by the bureau a statement that the employer has fully implemented and is operating its DFWP program in accordance with the program level requirements for which the employer has applied or is receiving the discount.

(3) The employer shall submit to the bureau a DFWP program progress report on a form provided by the bureau providing information regarding its DFWP program for the program year. The progress report shall include information related to drug and alcohol testing and may also include additional information related to other DFWP program components as requested on the progress form. If the employer is applying for renewal, the employer shall include the DFWP program level that is requested for the next year. The reports shall be certified by the chief executive officer or designated management representative of the employer.

(a) Policy – The employer shall certify that it has developed a DFWP policy that meets or exceeds the program requirements associated with the level of DFWP program for which the employer is receiving a discount. The employer shall submit a copy of the written policy with the certification form. The employer shall maintain the following information on site for audit purposes:

(i) A copy of the written policy; and

(ii) Copies of signed acknowledgments from all employees regarding receipt of a copy of the employer’s DFWP program policy.

(b) Employee education – The employer shall maintain on site statistics regarding the number of employees educated under the DFWP program, the names and qualifications of all educators who presented the DFWP program employee education sessions, and the names and qualifications of persons supervising any of these educators. In addition, the employer shall maintain the following information on site for audit purposes:

Original attendance sheets, signed by each employee who attended DFWP program employee education, indicating the date and number of hours of each session.

(c) Supervisor training – The employer shall maintain on site statistics regarding the number of supervisors trained under the DFWP program, the names and qualifications of all trainers who presented the DFWP program supervisor training, and the names and qualifications of persons supervising any of these trainers. In addition, the employer shall maintain the following information on site for audit purposes:

Original attendance sheets, signed by each supervisor who attended DFWP program supervisor training, indicating the date and number of hours of each session.

(d) Drug and alcohol testing – The employer shall report statistics regarding the number of employees tested under the employer’s DFWP program. The employer shall maintain on site for audit purposes copies of all billings from medical review officers and laboratories. The following statistics shall be reported:

(i) Total number of employees employed by the company;

(ii) Number of safety-sensitive positions or functions for both private employers and public employers;

(iii) Program year and dates or periods of time in which the testing occurred;

(iv) Number of new hires and percentage tested;

(v) Aggregate reporting of the number of employees tested for each category of testing required in the employer’s DFWP program, including the number and per cent of employees tested for pre-employment/new hire, reasonable suspicion, post-accident, government required, random (if applicable), and other testing if applicable; number of positive versus negative tests for each category; and

(vi) Names of medical review officers and names, addresses, phone numbers, and contact persons for all labs or collectors utilized by the employer for drug and alcohol testing under the DFWP program.

(e) Employee assistance – The employer shall maintain on site the following information regarding its employee assistance plan or EAP under the DFWP program:

The name of the organization that provided the employee assistance services, and the name and telephone number of the contact person.

(f) Other – An employer implementing a level 2 DFWP program shall report its progress in implementing the first five steps of the bureau’s ten step business plan, and an employer implementing a level 3 DFWP program shall report its progress in implementing all ten steps of the ten step business plan. An employer implementing a level 2 or level 3 DFWP program shall maintain records on site of its implementation of either the first five steps or all ten steps of the bureau’s ten step business plan, as applicable.

(H) Disqualification from program and reapplication.

The bureau may cancel an employer’s participation in the DFWP program for the employer’s failure to fully implement a DFWP program in compliance with the approved program level. The bureau shall send written notice of cancellation to the employer, and shall require the employer to reimburse the bureau for any discounts received inappropriately, plus interest, as provided in paragraphs (B)(3) and (D) of this rule.

(1) If the bureau cancels an employer from the DFWP program under this rule for failure to meet the program requirements, the employer may reapply for the DFWP program for the next program period, unless the employer has received a discount and has failed to reimburse the bureau for the discount plus interest. The bureau may deny the application based on circumstances of the initial program period.

(2) When an employer becomes aware that it is unable to fully implement its DFWP program by the required implementation date, the employer shall notify the bureau immediately. The employer’s failure to notify the bureau of its inability to fully implement the DFWP program may disqualify the employer from re-applying for the program in the future, even after the required repayment of any discount that may have been received.

(I) Discount requirements.

An employer participating in the DFWP program or meeting renewal performance standards under this rule shall be eligible to receive discounts as provided for in this rule.

(1) The discount for an employer implementing a DFWP program shall be as follows:

(a) For an employer implementing a level 1 DFWP program, ten per cent;

(b) For an employer implementing a level 2 DFWP program, fifteen per cent;

(c) For an employer that has operated a DFWP program at level 1, level 2 or level 3 (the latter without a level 3 discount) for a total of no less than two full years; upon implementing a level 3 DFWP program, the employer is eligible for twenty per cent for each year of remaining eligibility in which the employer is approved to participate at a level 3 DFWP program,

(2) The discount will be applied to the employer’s premium rate, but not to the disabled workers’ relief fund assessments or other assessments. The discount will not alter the employer’s actual total modification calculation under rule 4123-17-03 of the Administrative Code.

(3) The application of the discount associated with the level of the DFWP program approved by the bureau for each employer shall occur effective July first or January first of the appropriate program year for private employers, and January first of the appropriate program year for public employers.

(4) An employer is limited to four continuous years, if eligible for four years of discount, or five continuous years, if eligible for five years of discount, to complete its maximum participation in the discount program under this rule; except that an employer which drops out of the DFWP program without receiving a discount or which repays any discount that was received, plus interest, may be considered for four or five years of discount, based on eligibility.

(5) An employer which has completed its eligible four years or five years of participation in the DFWP program under this rule is ineligible to reapply.

(J) An employer may appeal enrollment rejection and renewal rejection to the bureau’s adjudicating committee pursuant to rule 4123-14-06 of the Administrative Code.

(K) Hold harmless statement.

Nothing in this rule requires an employer to implement any policies or practices in developing a DFWP program that conflict or interfere with existing collective bargaining agreements. Rather, the bureau suggests that the employer and employees engage in a collaborative effort to be successful in improving workplace safety by implementing a DFWP program that includes employee input and support.

Where there are legal issues related to development and implementation of a DFWP program, it is the employer’s responsibility to consult with its legal counsel to resolve these issues. An employer shall certify in its application to the bureau that it shall hold the state of Ohio harmless for responsibility or liability under the DFWP program.

(L) Pursuant to section 4121.37 of the Revised Code, the administrator may establish a program of safety grants for employee education, supervisor training, development and legal review of a written substance policy, employee assistance, and research for eligible employers who participate in the safety grant program. The safety grant program may include grants to an employer participating in the drug-free workplace discount program under this rule or to an employer with a program comparable to the DFWP program under this rule for the employer to provide for employee and supervisor education and training as required under paragraphs (E)(2) and (E)(3) of this rule.

The administrator or administrator’s designee may authorize special safety grants which will be given in furtherance of drug-free workplace efforts to those employers who demonstrate capability of promoting the development of any drug-free workplace program component on a regional, statewide or industry-specific level including, but not limited to, incorporation of labor efforts to promote education, training and testing.

(1) The bureau shall determine whether the employer is eligible for the safety grant program grants under this rule. The bureau may limit participation in the safety grant program based upon the availability of bureau resources for the program and upon the merits of the employer’s proposal. The safety grant program is available only to a private state fund employer or a public employer taxing district that shall pay workers’ compensation premiums to the state insurance fund, shall have active coverage on the date of agreement to participate in the safety grant program, and shall be a participant in the drug-free workplace discount program under this rule or an employer with a program comparable to the DFWP program under this rule at the time of application for the safety grant program.

(2) The bureau will assess whether the employer is eligible to receive a safety grant under this rule. The bureau and employer shall enter into a written agreement detailing the rights, obligations, and expectations of the parties for performance of the safety grant program.

(3) The bureau may meet with the owner or chief executive officer of the employer to evaluate the employer’s progress in the safety grant program. The employer shall provide the bureau access to records or personnel to conduct research into the effectiveness of the safety grant program.

(4) An employer who complies with the requirements of the safety grant program under this rule shall be eligible to receive a grant from the bureau as provided in the written agreement.

(a) The bureau may establish by written agreement with the employer the maximum amount of the safety grant program grant.

(b) The bureau may establish by written agreement with the employer a requirement for matching funds from the employer in a ratio to be determined by the bureau.

(c) The bureau shall monitor the employer’s use of the safety grant program grant and may recover the entire grant if the bureau determines that the employer has not used the grant for the purposes of the safety grant program or has otherwise violated the written agreement on the safety grant program.

(5) The bureau shall evaluate the research data from the safety grant program on a periodic basis. The bureau may publish reports of the research to assist employers in maintaining a drug-free workplace.

Effective: 05/21/2009

Promulgated Under: 111.15

Statutory Authority: 4121.12, 4121.121

Rule Amplifies: 4123.29, 4123.34

Prior Effective Dates: 4/1/97, 7/1/98, 5/20/99, 7/1/99, 9/7/99, 3/27/00, 1/1/01, 7/1/01, 1/1/02, 12/1/02, 5/15/03, 7/1/04

Pursuant to division (E) of section 4123.34 of the Revised Code, the administrator may grant a discount on premium rates to an eligible employer that meets the drug-free workplace (DFWP) program requirements under the provisions of this rule.

(A) As used in this rule:

(1) “Drug-free workplace program for small employers” or “DFWP program” means the bureau’s rate program which offers a premium discount to eligible small employers for implementing a program addressing workplace use, misuse and abuse of alcohol and other drugs, including prescription, over-the-counter, and illegal drug abuse.

(2) “Prescription drug abuse” means the use of over-the-counter drugs or medications prescribed by a licensed medical practitioner by someone other than the person for whom they were prescribed or for purposes other than those for which they were prescribed or manufactured.

(3) “Accident” means an unplanned, unexpected, or unintended event which occurs on the employer’s property, during the conduct of the employer’s business, or during working hours, or which involves employer-supplied motor vehicles or motor vehicles used in conducting the employer’s business, or within the scope of employment, and which results in any of the following:

(a) A fatality of anyone involved in the accident;

(b) Bodily injury requiring off-site medical attention away from the employer’s place of employment;

(c) Vehicular damage in apparent excess of a dollar amount stipulated in the employer’s DFWP policy; or

(d) Non-vehicular damage in apparent excess of a dollar amount stipulated in the employer’s DFWP policy.

As used in this rule, “accident” does not have the same meaning as provided in division (C) of section 4123.01 of the Revised Code, and the definition of this rule is not intended to modify the definition of a compensable injury under the workers’ compensation law.

(4) “Reasonable suspicion” means evidence that an employee is using drugs or alcohol in violation of the company’s DFWP policy, drawn from specific, objective facts and reasonable inferences drawn from these facts in light of experience and training. Such facts and inferences may be based on, but are not limited to, any of the following:

(a) Observable phenomena, such as direct observation of drug or alcohol use, possession or distribution, or the physical symptoms of being under the influence of drugs or alcohol, such as but not limited to slurred speech, dilated pupils, odor of alcohol or marijuana, changes in affect, dynamic mood swings, etc.;

(b) A pattern of abnormal conduct, erratic or aberrant behavior, or deteriorating work performance (e.g., frequent absenteeism, excessive tardiness, recurrent accidents) which appears to be related to substance abuse and does not appear to be attributable to other factors;

(c) The identification of an employee as the focus of a criminal investigation into unauthorized drug possession, use, or trafficking;

(d) A report of alcohol or other drug use provided by a reliable and credible source;

(e) Repeated or flagrant violations of the company’s safety or work rules, which are determined by a supervisor to pose a substantial risk of physical injury or property damage and which appear to be related to substance abuse or substance use that may violate the employer’s DFWP policy, and do not appear attributable to other factors.

(5) “Random selection” means drug testing of an employee selected from a pool of employees made regardless of whether any suspicion of illegal drug use exists. This testing is made without advanced notice to the employee and is based on an equal probability of selection. Random selection testing is based upon an objective and non-discretionary computer program operated and maintained by an outside contractor to identify and test a specified percentage of the total workforce over the course of a year. All employees, including those previously selected for testing, have an equal chance of being selected each time the testing process occurs, such that some employees may be selected more than once for random selection testing while other employees may not be selected at all.

(6) “Safety-sensitive position or function” means any job position or work-related function or job task designated as such by the employer, which through the nature of the activity could be detrimental or dangerous to the physical well-being of the employee, co-workers, customers or the general public through a lapse in attention or judgment. The safety-sensitive position or function may include positions or functions where national security or the security of employees, co-workers, customers, or the general public may be seriously jeopardized or compromised through a lapse in attention or judgment.

(7) “Supervisor” means an employee who supervises others in the performance of their jobs, has the authority and responsibility to initiate reasonable suspicion testing when it is appropriate, and has the authority to recommend or perform hiring or firing procedures.

(8) “Ohio Department of Alcohol and Drug Addiction Services” or “ODADAS” means the state agency an employer may contact to provide technical assistance or referral to available community resources for employers interested in developing a DFWP program. ODADAS shall maintain a list of DFWP developmental consultant programs meeting specified criteria and offering training to assist employers in developing a DFWP program. Such training shall be experience equivalency for purposes of this rule.

(9) “Experience equivalency” means consultation and training services offered through a program which facilitates the development of an employer’s DFWP program and may qualify the employer to receive a higher discount based on the program level implemented in conjunction with this experience equivalency credit.

The criteria for a program to be an experience equivalency shall include:

(a) All primary consultants for the organization shall have a minimum of ten hours annual continuing education in drug-free workplace issues;

(b) The organization shall have provided drug-free workplace policy and operational procedures development consultation and training for a period of at least two years; and

(c) For purposes of this rule, the organization shall provide a certificate only to an employer that completes a minimum of fifteen hours of face-to-face consultation and training and a minimum of twenty additional hours developing the employer’s drug-free workplace policy and program operations.

(10) “Employee assistance plan” means an employer’s plan of action and designated appropriate resources to assist employees who:

(a) Seek help on their own for an alcohol or drug problem;

(b) Are referred by management for a possible problem with alcohol or drugs; or

(c) Have a positive alcohol or drug test.

(11) “Employee assistance program” or “EAP” means a cost-effective program to assist employees and their families in dealing with problems affecting their work performance. An EAP identifies and helps resolve problems by applying short-term counseling, referral, and follow-up services, as determined by the contractual arrangement with the employer. In addition, the EAP provides such services as management training and consultation; prevention and education programs; crisis intervention; benefits analysis; and organizational development. A qualified EAP is one recognized by industry standards which employs certified personnel and operates in compliance with core-technology specific to the EAP discipline. An “employee assistance program” is to be distinguished from an “employee assistance plan,” which is used generically by employers offering a composition of assistance services for employees but which do not adhere to the core technology of the EAP field, as defined by the employee assistance professional association (EAPA). Employers are not required to have an EAP at any level of participation in the DFWP program but are encouraged to consider this option which offers broad-based employee assistance services as well as a good return on investment. Employers are not required to have an EAP at any level of participation in the DFWP program but are encouraged to consider this option which offers broad-based employee assistance services as well as a good return on investment.

(12) “Drug and alcohol testing” means a range of tests that may be utilized to address employee use or abuse of alcohol and other drugs that affect workplace safety. These tests include pre-employment or new hire testing to screen from the workforce persons with existing substance use or abuse problems that may affect workplace safety; post-accident testing, for employees who may have caused or contributed to an accident due to use or abuse of alcohol or other drugs; reasonable suspicion testing, which utilizes observations from trained supervisors to identify employees whose behavior suggests use or abuse of alcohol or other drugs that may endanger the employee or other employees; follow-up testing, including a return-to-duty test; and random drug testing to identify employees who use alcohol or other drugs in contravention of the employer’s DFWP policy, with such testing likely to deter substance abuse because employees will not know whether or when they might be tested. The five drugs that are included in the drug testing are amphetamines, cannabinoids (THC), cocaine (including crack), opiates, and phencyclidine (PCP).

(13) “Consortia” means entities established to provide more cost-effective services to employers to help the employers meet the DFWP program requirements. Consortia may involve varied pools of employers and their employees, wherein employer education, supervisor training, and drug and alcohol testing may be offered at a reduced cost to the employers who choose to participate. Consortia for drug and alcohol testing purposes may involve contracts with laboratories certified by the federal department of health and human services and will operate in concert with established protocols and procedures that are consistent with federal guidelines for testing.

(14) “Vendor” means any person or organization that provides service to employers participating in the DFWP program for purposes of employers meeting DFWP program requirements.

(15) “Small employer” means any employer that typically employs twenty-five or fewer employees.

(B) Application process.

The bureau shall provide application and renewal forms for use in the DFWP program and shall have final authority to approve a state fund employer to receive a discount based on its participation in this program. An employer’s participation in a DFWP program shall be on a program year basis, as shall renewal of participation in a DFWP program. Only state fund employers requesting consideration for the DFWP program discount should submit an application. The bureau shall evaluate each application to determine the employer’s eligibility to receive a discount under the DFWP program, the employer’s eligibility for a specific program level, and the applicable discount per cent.

(1) A private employer may apply either by June thirtieth for the program year beginning July first of that year to June thirtieth of the following year, or by December thirty-first for the program year beginning January first of the following year to December thirty-first of that year. The progress report and renewal deadlines are March thirty-first for a program year that begins on July first, and September thirtieth for a program year that begins on January first.

(2) A public employer taxing district may apply by December thirty-first prior to the program year beginning January first of the following year to December thirty-first of that year. The progress report and renewal deadlines are September thirtieth for a program year beginning January first.

(3) An employer may withdraw its application for enrollment in the DFWP program under this rule at any time prior to receiving the discount on its premium. When an employer becomes aware that it is unable to meet the program requirements associated with its approved DFWP program level by the required implementation date, the employer shall notify the bureau of its inability and shall withdraw from the program. The employer shall return any monetary benefits associated with any discount received.

(C) Eligibility requirements.

The DFWP program under this rule is available in the form of technical assistance and support to all private and public employers. However, eligibility for the discount is limited to state fund employers, with the per cent of discount based on an employer’s participation in one or more alternate rating programs. A state fund employer seeking a discount shall apply on a bureau application form to implement a DFWP program and shall satisfy all of the eligibility requirements of this rule. The bureau shall review the application to determine whether the employer is eligible to receive a discount for participation in the DFWP program, determine whether the employer is eligible for the level of program applied for, and determine and approve the discount percentage for the level of program for which the employer is determined to be eligible. An employer that is found to be ineligible for participation in the DFWP program may reapply in a subsequent program year. It is recognized that an employer may implement a DFWP program that exceeds the minimum requirements for the discount level approved by the bureau. For all levels of a DFWP program, the employer shall meet the following eligibility requirements:

(1) If an employer participates in any other alternate rating program offered by the bureau at the same time as the employer participates in the DFWP program, the employer may participate in the DFWP program and may receive the discount provided for under this rule in addition to the benefit for participating in the other alternate rating program, subject to the provisions and restrictions below:

(a) An employer participating in both retrospective rating under rules 4123-17-41 to 4123-17-54 of the Administrative Code and the DFWP program may only receive a premium discount equal to the maximum of either the discount under the DFWP program or the difference between the employer’s premium calculated as an individual employer and calculated in the retrospective rating program.

(b) An employer participating in group rating under rules 4123-17-61 to 4123-17-68 of the Administrative Code or in group retrospective rating under rule 4123-17-73 of the Administrative Code and also participating in the DFWP program during a given program period is not eligible for a DFWP discount in addition to the benefit for participating in any of these other alternative rating programs.

(c) An employer participating in the deductible program under rule 4123-17-72 of the Administrative Code and the DFWP program may implement the DFWP program under this rule and receive the associated premium discounts in addition to the deductible benefit.

(d) An employer that has an existing substance-free program that has been in place for four or more years at the time of application and is evaluated as comparable to the level one program under this rule is eligible for a discount under this rule with the following stipulation. Such employer must implement all ten steps of the bureau’s ten step business plan if participating at either level 2 or level 3.

(e) An employer not eligible for a discount under this rule may implement a DFWP program and is encouraged to do so. The bureau and ODADAS will identify available resources for support and technical assistance.

(2) The employer shall be current as of March thirty-first for the application year beginning July first, or September thirtieth for the application year beginning January first, and subsequent renewal years (not more than forty-five days past due) on any and all premiums, assessments, penalties or monies otherwise due to any fund administered by the bureau, including amounts due for retrospective rating at the time of the application deadline.

(3) The employer cannot have cumulative lapses in workers’ compensation coverage in excess of forty days within the twelve months preceding the application or renewal deadline.

(4) The employer shall be in an active or reinstated policy status the first day of the policy year for the DFWP program.

(5) An employer in the DFWP program shall continue to meet all eligibility requirements during the year of participation in the program, when applying for renewal, and during each subsequent year of participation in the program, regardless of the level of the employer’s DFWP program.

(D) General program requirements.

In signing the application form, the chief executive officer or designated management representative of the employer shall certify that the employer shall meet, at a minimum, the program requirements associated with the level DFWP program for which the employer has applied. This certification is required for the employer to be considered for the discount associated with implementing the specific level DFWP program, and the signature certifies that the employer shall return any monetary benefits associated with any discount received based on failure to implement or meet the DFWP program level requirements for which it has applied and been approved.

(1) An employer approved by the bureau for a DFWP program that does not have an existing substance-free workplace program at the time of application or that has a program in place for less than one year, may receive a maximum of five years of discount under this rule.

(2) An employer that has an existing substance-free workplace program at the time of application for at least one year but less than four years that is evaluated as comparable to the level one program under this rule may receive a maximum of four years of discount under this rule.

(E) Program requirements – all program levels.

To receive a discount for implementing and operating a DFWP program, an employer shall fully implement, at a minimum, the following program components by the applicable dates.

(1) Policy – The DFWP program shall include a written policy statement, which, at a minimum, shall consist of the following:

(a) Articulate all the elements of the level DFWP program which the employer is implementing;

(b) State management’s incentive for creating a substance-free workplace (e.g., concern for employee safety and health, productivity, accident prevention, and loss control);

(c) Identify a DFWP program administrator and indicate the person’s role or responsibilities with regard to the DFWP program;

(d) Communicate the DFWP program and policy through initial presentation to all employees prior to the program implementation and/or on a repetitive basis annually through employee education sessions;

(e) Clearly state that the program applies to all employees, including all levels of management;

(f) Contain appropriate references to collective bargaining agreements and show how the DFWP program works in concert with these agreements to promote a safer workplace for all employees;

(g) Address the use or abuse of alcohol, prescription medications, over-the-counter medications, or illegal drugs. The policy should include which drug or alcohol tests will be used, at what cutoff levels and what testing procedures and protocols will be applied; and a clear statement that supervisors will be trained regarding their responsibilities related to various testing prior to the implementation of any testing;

(h) Include a commitment to rehabilitation;

(i) Describe how referrals may be made for testing, assessment, and employee assistance;

(j) Be in compliance with all federal and state laws or regulations;

(k) State what is prohibited and the consequences for employees of a violation of this policy;

(l) State the consequences, if any, for an employee’s refusal to submit to a medical examination or a drug or alcohol test in conjunction with the operation of the employer’s DFWP program;

(m) State the consequences for any employee attempting to adulterate a specimen or otherwise manipulate the drug or alcohol testing process;

(n) Include a discussion of confidentiality of the program records to ensure the privacy rights of individuals.

(2) Employee education – The DFWP program shall include employee education, which, at a minimum, shall consist of the following:

(a) At least one hour initially for all current employees prior to implementation of the DFWP program, and at least one hour annually thereafter for each program year in which the employer operates a DFWP program, and with information on the employer’s written policy provided to all new employees within each employee’s first six weeks of employment which may include written information provided during orientation;

(b) Inform employees about the content of the DFWP program as delineated in the written policy, a copy of which will be presented, discussed and acknowledged by each employee’s signature on an appropriate form;

(c) Stress management’s commitment to the program;

(d) Include the disease model for alcohol and other drugs, the signs and symptoms associated with substance use and abuse, and the effects and dangers of commonly used drugs in the workplace;

(e) Share a list of helping resources in the community for employees to utilize for themselves or their families; with information provided by bureau staff and obtained from the local county alcohol, drug abuse and mental health service (ADAMH) board or alcohol and drug addiction services (ADAS) board to link employees who need assistance with helping resources in the community and which can be utilized by the employees and/or their families for assessment or treatment.

(f) Be presented by a qualified educator or a presenter supervised by a qualified educator or, if in-house personnel are utilized to present the employee education sessions, the presenter must have attended a training-for-trainers session offered by a qualified educator. A qualified educator includes anyone having at least three years of experience providing substance educational awareness within the past five years or holding one of the following credentials:

(i) Substance abuse professional (SAP);

(ii) Certified employee assistance professional (CEAP);

(iii) Certified chemical dependency counselor (CCDCIII);

(iv) Ohio certified prevention specialist 1 (OCPS 1);

(v) Ohio certified prevention specialist 2 (OCPS 2); or

(vi) Other, which includes any other credential that demonstrates comparable education or training pertinent to providing education or training in the substance use/abuse field.

(3) Supervisor training – The DFWP program shall include supervisor training, which, at a minimum, shall consist of the following:

(a) At least two hours of initial skill-building training for all current and new supervisors (with at least one hour of training within six weeks of a current employee becoming a supervisor or from the date of hire of a supervisor), in addition to the annual hour of employee education, for a total of three hours;

(b) In subsequent program years, a minimum of two hours of refresher training for supervisors who have received the initial two hours of training, which is in addition to the annual hour of employee education, for a total of three hours;

(c) A discussion of a supervisor’s responsibilities in relationship to the employer’s DFWP program, including but not limited to how to recognize a possible alcohol or other drug problem; how to document behaviors that demonstrate an alcohol or other drug problem; how to confront employees with the problem in terms of their observed behaviors; how to initiate reasonable suspicion testing; how to make an appropriate referral for assistance; how to follow up with employees re-entering the work setting after a positive drug test; and how to handle DFWP program responsibilities in a manner that is consistent with any pertinent collective bargaining agreements; and

(d) Be presented by a qualified trainer or a presenter supervised by a qualified trainer. A qualified trainer includes anyone having at least three years of experience providing substance training within the past five years or holding one of the following credentials provided in paragraphs (E)(2)(f)(i) to (E)(2)(f)(vi) of this rule.

(4) Drug and alcohol testing – The DFWP program shall include drug and alcohol testing which, at a minimum, shall consist of a five-panel drug screen with gas chromatography/mass spectrometry (GC/MS) and alcohol testing consistent with federal standards, including split specimen as utilized in federally mandated testing. The employer shall implement and pay for drug and alcohol testing as follows, with the stipulation that all categories of testing shall be clearly described and defined in the employer’s written policy. Only the cost of a re-test requested by an employee and utilizing the split specimen may be charged to an employee. If a re-test comes back negative for drugs, the employer will pay the cost of the re-test.

(a) Pre-employment/new-hire testing: at one hundred per cent (drug test required), with testing to be conducted before or within the first ninety days of employment;

(b) Post-accident: All employees who may have caused or contributed to an on-the-job accident, as defined in paragraph (A)(3) of this rule, shall submit to a drug or alcohol test. This test will be administered as soon as possible after necessary medical attention is received, or within eight hours for alcohol and within thirty-two hours for other drugs. The employer may determine when an accident should result in a post-accident test through considering the following: if the accident resulted in an injury that is considered “minor” even where off-site medical attention was required, and if there was no violation of work rules associated with the accident, and if there was no reasonable suspicion related to possible substance use in violation of the employer’s written policy and if the accident is considered “normal” in relationship to the job functions of all involved employees, then the employer may require but does not have to require a drug and/or alcohol test of all employees who may have caused or contributed to the accident.

(c) Reasonable suspicion testing based on documentation and concurrence among the trained observing supervisor and a second trained supervisor, wherever possible.

(d) Follow-up testing, for any employee with a positive test, commencing with a required return-to-duty drug and/or alcohol test. The employer may determine whether there are to be additional tests on an unannounced basis over the period of a year from the date of return to duty for such employee where the employer brings the employee back to work or returns the employee to a safety-sensitive position or function after a positive test.

For the purposes of the DFWP program, the forms of testing to be utilized will be urinalysis (EMIT screen, also referred to as a drug screen, plus GC/MS confirmation) for a panel of five drugs, and breath or saliva with a confirmatory evidential breath test (EBT) for alcohol. However, if an EBT is not available or reasonably accessible, a blood test should be made available to the employee to determine the presence of alcohol. The employer is required to document and maintain on file the reason the EBT was not administered. To ensure the integrity of testing and for the safety of employees, participating companies must ensure that the collection sites with which they contract follow the procedures and chain-of-custody guidelines recommended by the federal department of health and human services (DHHS) and required by the federal department of transportation. Employers shall ensure that DHHS certified laboratories process the test results, and that a qualified medical review officer is responsible for evaluating all test results.

Supervisors shall receive training regarding their responsibilities related to various testing prior to implementation of testing. Cut-off levels shall be clearly stated in the written policy, along with the procedures or protocols, such as chain of custody, that define the testing process.

(5) Employee assistance – The DFWP program for small employers does not require either an employee assistance plan as defined in paragraph (A)(10) of this rule or an EAP as defined in paragraph (A)(11) of this rule for any program level. The bureau strongly recommends that the employer consider providing employee assistance beyond the assistance information that will be compiled by bureau staff from local ADAMH or ADAS boards. When an employee tests positive, in addition to any corrective action deemed appropriate and specified in written policy, the employer should consider sharing with the employee what a substance abuse assessment is and, by way of referral, shall provide the list containing names and addresses of qualified substance abuse resources who can administer an assessment and serve as a link to possible treatment services. Offering employee assistance does not preclude the employer from making a decision on retaining an employee or termination of employment consistent with applicable state and federal laws and regulations.

(6) Other – The DFWP program may contain other provisions related to specific program requirements that do not fall into one of the five basic program components.

(7) An employer may use a vendor for any of the following: to develop or review its DFWP program policy under paragraph (E)(1) of this rule; for an educator or presenter supervised by an educator for employee education under paragraph (E)(2) of this rule; for a trainer or presenter supervised by an educator for supervisor training under paragraph (E)(3) of this rule; for drug and alcohol testing under paragraph (E)(4) of this rule; or for employee assistance under paragraph (E)(5) of this rule.

(8) The bureau may establish and administer or set standards for consortia for the purpose of more effective program administration and reduced costs for small employers participating in the DFWP program under this rule. Consortia will facilitate the development of drug testing pools that can be utilized by groups of small employers and their employees. Consortia can help small employers meet additional DFWP requirements such as employee education, skill-building supervisor training, facilitate random testing, and provide other drug and alcohol testing services for the drug testing requirements and providing employee assistance. The bureau will develop the criteria that will govern how the consortia will operate.

(F) Additional level-specific program requirements.

In addition to the general requirements of paragraph (E) of this rule applicable to all employers participating in the DFWP program and receiving a discount, this paragraph of this rule describes additional specific program requirements for the various levels of the DFWP program.

(1) Level 1 DFWP program.

To receive a discount for a level 1 DFWP program, an employer shall meet all of the general requirements of paragraph (E) of this rule.

(2) Level 2 DFWP program.

To receive a discount for a level 2 DFWP program, an employer shall apply for level 2 DFWP program and shall demonstrate to the satisfaction of the bureau proficiency and readiness to implement a level 2 DFWP program such as through having a documented safety program or an existing substance-free workplace program or through documented experience equivalency from a program offering employer DFWP development training that has met the criteria specified in paragraph (A)(9) of this rule and is on the list maintained by ODADAS, through some other form of demonstrated proficiency/readiness to implement a level 2 DFWP program or through participation in a consortium that meets the requirements established by the bureau pursuant to paragraph (A)(13) of this rule. The employer shall fully implement the program components detailed in paragraph (E) of this rule, and in addition shall implement the following:

(a) In addition to the drug and alcohol testing DFWP program requirements of paragraph (E)(4) of this rule, the employer shall include random drug testing of ten per cent of the employer’s workforce each program year, as shall be clearly described and defined in the employer’s DFWP policy. For public employers, random drug testing applies only to safety-sensitive positions or functions, as defined by the employer in the DFWP policy and paragraphs (A)(5) and (A)(6) of this rule.

(b) The employer shall implement three specified steps of the bureau’s ten step business plan under rule 4123-17-70 of the Administrative Code. The three steps are senior leadership, employee involvement, and written and communicated safe work practices.

(3) Level 3 DFWP program.

To receive a discount for a level 3 DFWP program, an employer shall apply to implement a level 3 DFWP program; shall have conducted a DFWP program at level 1, 2, or 3 for two full years, and shall have met the renewal requirements. The employer shall fully implement the program components detailed in paragraph (E) of this rule, and in addition shall implement the following:

(a) In addition to the drug and alcohol testing DFWP program requirements of paragraph (E)(4) of this rule, the employer shall include random drug testing of twenty-five per cent of the employer’s entire workforce each program year. For public employers, random drug testing applies only to safety-sensitive positions or functions, as defined by the employer in the DFWP policy and paragraphs (A)(5) and (A)(6) of this rule.

(b) At level 3, the employer shall implement three steps of the bureau’s ten step business plan under rule 4123-17-70 of the Administrative Code. The steps are senior leadership, employee involvement, and written and communicated safe work practices.

(G) Progress reporting and renewal requirements.

If the bureau determines that an employer is eligible to implement a DFWP program, the employer shall comply with the following requirements for initial participation, and renewal of annual participation in the DFWP program. In order to qualify for renewal, an employer shall have implemented all of the program requirements associated with the DFWP program level for which a discount was obtained by the appropriate implementation date.

(1) The employer shall permit the bureau or its designee access to the employer’s job sites for on-site audit of the employer’s DFWP program components, related records and documentation. The employer shall sign a “release of information form” for compliance monitoring and cost-benefit analysis purposes which authorizes the bureau to have access to various aggregate information from drug testing laboratories and medical review officers.

(2) The employer shall permit the bureau or its designee access to the employer’s job sites for on-site audit of the employer’s DFWP program components, related records and documentation. The employer shall sign a “release of information form” for compliance monitoring and cost-benefit analysis purposes which authorizes the bureau to have access to various aggregate information from drug testing laboratories and medical review officers.

(a) Policy – The employer shall develop a DFWP policy that meets or exceeds the program requirements associated with the level of DFWP program for which the employer is receiving a discount. The employer shall maintain the following information on site for audit purposes:

(i) A copy of the written policy; and

(ii) Copies of signed acknowledgments from all employees regarding receipt of a copy of the employer’s DFWP program policy.

(b) Employee education – The employer shall maintain on site statistics regarding the number of employees educated under the DFWP program, the names and qualifications of all educators who presented the DFWP program employee education sessions, and the names and qualifications of persons supervising any of these educators. In addition, the employer shall maintain the following information on site for audit purposes:

Original attendance sheets, signed by each employee who attended DFWP program employee education, indicating the date and number of hours of each session.

(c) Supervisor training – The employer shall maintain on site statistics regarding the number of supervisors trained under the DFWP program, the names and qualifications of all trainers who presented the DFWP program supervisor training, and the names and qualifications of persons supervising any of these trainers. In addition, the employer shall maintain the following information on site for audit purposes:

Original attendance sheets, signed by each supervisor who attended DFWP program supervisor training, indicating the date and number of hours of each session.

(d) Drug and alcohol testing – The employer shall report statistics regarding the number of employees tested under the employer’s DFWP program. The employer shall maintain on site for audit purposes copies of all billings from medical review officers and laboratories. The following statistics shall be reported:

(i) Total number of employees employed by the company;

(ii) Number of safety-sensitive positions or functions for both private employers and public employers;

(iii) Program year and dates or periods of time in which the testing occurred;

(iv) Number of new hires and percentage tested;

(v) Aggregate reporting of the number of employees tested for each category of testing required in the employer’s DFWP program, including the number and per cent of employees tested for pre-employment/new hire, reasonable suspicion, post-accident, government required, random (if applicable), and other testing if applicable; number of positive versus negative tests for each category; and

(vi) Names of medical review officers and names, addresses, phone numbers, and contact persons for all labs or collectors utilized by the employer for drug and alcohol testing under the DFWP program.

(e) Employee assistance – The employer shall maintain on site the following information regarding its employee assistance under the DFWP program:

The name of the organization that provided the employee assistance services, and the name and telephone number of the contact person.

(f) Other – An employer implementing a level 2 DFWP program shall report its progress in implementing the three specified steps of the bureau’s ten step business plan, and an employer implementing a level 3 DFWP program shall report its progress in implementing the three specified steps. An employer implementing a level 2 or level 3 DFWP program shall maintain records on site of its implementation of the three required steps.

(H) Disqualification from program and reapplication.

The bureau may cancel an employer’s participation in the DFWP program for the employer’s failure to fully implement a DFWP program in compliance with the approved program level. The bureau shall send written notice of cancellation to the employer, and shall require the employer to reimburse the bureau for any discounts received inappropriately, as provided in paragraphs (B)(3) and (D) of this rule.

(1) If the bureau cancels an employer from the DFWP program under this rule for failure to meet the program requirements, the employer may reapply for the DFWP program for the next program period, unless the employer has received a discount and has failed to reimburse the bureau for the discount. The bureau may deny the application based on circumstances of the initial program period.

(2) When an employer becomes aware that it is unable to fully implement its DFWP program by the required implementation date, the employer shall notify the bureau immediately. The employer’s failure to notify the bureau of its inability to fully implement the DFWP program may disqualify the employer from re-applying for the program in the future, even after the required repayment of any discount that may have been received.

(I) Discount requirements.

An employer participating in the DFWP program or meeting renewal performance standards under this rule shall be eligible to receive discounts as provided for in this rule.

(1) The discount for an employer implementing a DFWP program shall be as follows:

(a) For an employer implementing a level 1 DFWP program, ten per cent;

(b) For an employer implementing a level 2 DFWP program, fifteen per cent;

(c) For an employer that has operated a DFWP program at level 1, level 2 or level 3 (the latter without a level 3 discount) for a total of no less than two full years; upon implementing a level 3 DFWP program, the employer is eligible for twenty per cent for each year of remaining eligibility in which the employer is approved to participate at a level 3 DFWP program.

(2) The discount will be applied to the employer’s premium rate, but not to the disabled workers’ relief fund assessments or other assessments. The discount will not alter the employer’s actual total modification calculation under rule 4123-17-03 of the Administrative Code.

(3) The application of the discount associated with the level of the DFWP program approved by the bureau for each employer shall occur effective July first or January first of the appropriate program year for private employers, and January first of the appropriate program year for public employers.

(4) An employer is limited to four years, if eligible for four years of discount, or five years, if eligible for five years of discount, to complete its maximum participation in the discount program under this rule; except that an employer which drops out of the DFWP program without receiving a discount or which repays any discount that was received may be considered for four or five years of discount, based on eligibility.

(5) An employer which has completed its eligible four years or five years of participation in the DFWP program under this rule is ineligible to reapply.

(6) Employers participating in DFWP are eligible to obtain a DFWP plus benefit as follows:

(a) Additional credits are allowed for a fifteen per cent reduction of claims frequency and for a fifteen per cent reduction of claims severity;

(b) Claims frequency is defined as total number of reported claims (medical only and lost time) in a given policy year multiplied by one million dollars divided by the reported payroll of the same year;

(c) Claims severity is defined as the total number of days away from work in a given policy year multiplied by one million dollars divided by the reported payroll of the same year;

(d) Plus credits are as follows:

(i) Ten per cent for a fifteen per cent or greater claims severity reduction;

(ii) Five per cent for a fifteen per cent or greater claims frequency reduction;

(iii) Five per cent bonus for meeting both a fifteen per cent or greater claims severity reduction and a fifteen per cent or greater claims frequency reduction.

(iv) A plus discount check will be sent to an employer by the end of October for an employer whose anniversary date in DFWP is the first of July, and by the end of April for an employer whose anniversary date in the program is the first of January.

(J) An employer may appeal enrollment rejection and renewal rejection to the bureau’s adjudicating committee pursuant to rule 4123-14-06 of the Administrative Code.

(K) Hold harmless statement.

Nothing in this rule requires an employer to implement any policies or practices in developing a DFWP program that conflict or interfere with existing collective bargaining agreements. Rather, the bureau suggests that the employer and employees engage in a collaborative effort to be successful in improving workplace safety by implementing a DFWP program that includes employee input and support.

Where there are legal issues related to development and implementation of a DFWP program, it is the employer’s responsibility to consult with its legal counsel to resolve these issues. An employer shall certify in its application to the bureau that it shall hold the state of Ohio harmless for responsibility or liability under the DFWP program.

(L) Pursuant to section 4121.37 of the Revised Code, the administrator may establish a program of safety grants in support of meeting drug-free workplace requirements such as policy development, employee education, supervisor training, employee assistance, and research for eligible employers who participate in the safety grant program. The safety grant program may include grants to an employer participating in the drug-free workplace discount program under this rule or to an employer with a program comparable to the DFWP program under this rule for the employer to provide for employee and supervisor education and training as required under paragraphs (E)(2) and (E)(3) of this rule.

The administrator or administrator’s designee may authorize special safety grants which will be given in furtherance of drug-free workplace efforts to those employers who demonstrate capability of promoting the development of any drug-free workplace program component on a regional, statewide or industry-specific level including, but not limited to, incorporation of labor efforts to promote education, training and substance testing.

(1) The bureau shall determine whether the employer is eligible for the safety grant program grants under this rule. The bureau may limit participation in the safety grant program based upon the availability of bureau resources for the program and upon the merits of the employer’s proposal. The safety grant program is available only to a private state fund employer or a public employer taxing district that shall pay workers’ compensation premiums to the state insurance fund, shall have active coverage on the date of agreement to participate in the safety grant program, and shall be a participant in the drug-free workplace discount program under this rule or an employer with a program comparable to the DFWP program under this rule at the time of application for the safety grant program.

(2) The bureau will assess whether the employer is eligible to receive a safety grant under this rule. The bureau and employer shall enter into a written agreement detailing the rights, obligations, and expectations of the parties for performance of the safety grant program.

(3) The bureau may meet with the owner or chief executive officer of the employer to evaluate the employer’s progress in the safety grant program. The employer shall provide the bureau access to records or personnel to conduct research into the effectiveness of the safety grant program.

(4) An employer who complies with the requirements of the safety grant program under this rule shall be eligible to receive a grant from the bureau as provided in the written agreement.

(a) The bureau may establish by written agreement with the employer the maximum amount of the safety grant program grant.

(b) The bureau may establish by written agreement with the employer a requirement for matching funds from the employer in a ratio to be determined by the bureau.

(c) The bureau shall monitor the employer’s use of the safety grant program grant and may recover the entire grant if the bureau determines that the employer has not used the grant for the purposes of the safety grant program or has otherwise violated the written agreement on the safety grant program.

(5) The bureau shall evaluate the research data from the safety grant program on a periodic basis. The bureau may publish reports of the research to assist employers in maintaining a drug-free workplace.

Effective: 05/21/2009

Promulgated Under: 111.15

Statutory Authority: 4121.12, 4121.121

Rule Amplifies: 4123.29, 4123.34

Prior Effective Dates: 7/1/02, 12/1/02, 5/15/03, 7/1/04

(A) Any employer who is paying premiums to the state insurance fund and whose coverage is in force may elect to participate in the fifteen thousand dollar medical-only program as provided in section 4123.29 of the Revised Code. No formal application is required; however, an employer must elect to participate by telephoning the bureau. Once an employer has elected to participate in the program, the employer will be responsible for all bills in all medical-only claims with a date of injury the same or later than the election date, unless the employer notifies the bureau within fourteen days of receipt of the notification of a claim being filed that it does not wish to pay the bills in that claim, or the employer notifies the bureau that the fifteen thousand dollar maximum has been paid, or the employer notifies the bureau of the last day of service on which it will be responsible for the bills in a particular medical-only claim.

(B) Employers may pay bills only on any alleged medical-only injury. The provisions of this program and rule shall not apply to claims in which an employer with knowledge of a claimed compensable injury or occupational disease, has paid wages in lieu of compensation or total disability. Payment of a bill by an employer does not waive the bureau’s right to adjudicate the claim, nor does it waive the employer’s right to contest the claim should a claim be filed.

(C) This program in no way supersedes the right of any injured worker to file a workers’ compensation claim with the bureau.

(D) An employer or its agent may elect to pay to the injured worker or the provider on behalf of the injured worker the first fifteen thousand dollars of a medical-only claim. Employers may elect which medical-only claims they do not wish to cover under this program.

(1) An employer electing to pay bills in its employees’ medical-only claims is responsible for all bills in a claim until the fifteen thousand dollar maximum is reached and the employer provides notice to the bureau that the employer has paid the first fifteen thousand dollars of the bills in the claim by providing the bureau the date of service of the bill which reached the fifteen thousand dollar maximum, or the employer provides notice to the bureau that it no longer wishes to be responsible for the bills in a particular claim by providing the bureau the last date of service that it will pay. The bureau will process all related bills received after the withdrawal notification date.

(2) If the fifteen thousand dollar maximum has not been reached and the payment of a bill will exceed the fifteen thousand dollar maximum, the employer should pay that portion of the bill that will bring the payment to the fifteen thousand dollar maximum and inform the provider to bill the bureau for the remainder of the bill. The employer should then notify the bureau that the first fifteen thousand dollars has been paid, and provide proof of such payment and copies of all bills paid, in the proper billing format, to the bureau. The bureau will then be responsible for processing all future bills.

(3) The employer cannot elect to pay only certain bills for a claim and submit other bills in that claim to the bureau for payment.

(4) Once an employer has elected to pay bills in medical-only claims under this program, the employer must pay all bills under this program within thirty days of receipt of the bill. The employer shall provide copies of the bills paid in the claim, in the proper billing format, to the bureau and the injured worker or the injured worker’s representative upon request. Upon written request from the bureau, the employer shall provide documentation to the bureau of all medical-only bills that they are paying directly. Such requests from the bureau may not be made more frequently than on a semiannual basis. Failure to provide such documentation to the bureau within thirty days of receipt of the request may result in the employer’s forfeiture of participation in the program for such injury.

(E) An employer electing this program must keep a record of the injury to include: name, address, and social security number of the injured worker; date and time of injury; type of injury; part of body injured; and a brief description of the accident. The employer also shall keep a copy of all bills with proof and date of payment under this program. This information will be made available to the bureau and the injured worker or their representative upon request. The information must be kept on file for six years from the last date a bill has been paid by the employer or the information has been received by the bureau.

(1) An employer in the program must notify the bureau within fourteen days of a claim being filed of the employer’s intention not to cover the first fifteen thousand dollars of the medical costs of the claim. This notification may be by telephone or in writing.

(2) The bureau will process all related bills in a filed medical-only claim in the normal manner unless the employer has previously notified the bureau that it has elected to participate in the fifteen thousand dollar program.

(3) In those cases in which the bureau has been properly notified by the employer of the employer’s intention to directly pay the bills, the bureau shall not pay any bills submitted to the bureau directly from the provider but will notify the provider that the bill should be submitted to the employer until the provider is notified by the employer that the bureau is responsible for the bills in the claim. No interest shall be paid by the bureau on account of bills not paid within thirty days if such bills are the responsibility of the employer.

(4) All bills submitted to the bureau or the employer for payment must be in the proper billing format and must be received by the bureau or the employer within two years of the date of service on the bill.

(F) An employer electing this program has the responsibility to notify the injured worker and medical provider, in writing, of the acknowledgment of the alleged medical-only injury, that it has elected under section 4123.29 of the Revised Code to pay the first fifteen thousand dollars, that all bills should be submitted to the employer, and that the injured worker and the bureau should not be billed.

(1) Once an employer in this program pays a bill on a work-related injury the bureau will not reimburse that employer.

(2) In the event that a duplicate payment is made, it will be the employer’s responsibility to seek reimbursement from the provider. The employer may request reimbursement of such bills from the provider, and the provider shall reimburse the employer where the bureau has paid the bill.

(3) In the event that a medical-only claim changes to a lost time claim, the bureau will not reimburse the employer for bills that have been paid by the employer under this program.

(G) The employer shall pay all bills as billed or agree upon an appropriate reimbursement level with the provider. The bureau will not assist the employer in determining the fee payable; however, the bureau UCR fee schedule and other fee maxima programs used by the bureau will be made available for the use of the employer. Providers must bill the employer using the proper bureau format and their usual and customary fee. Providers may not balance bill the injured worker. Providers may only balance bill the bureau on the occasion of a bill that would require an employer to exceed the fifteen thousand dollar maximum. The bureau will not mediate fee disputes between the employer and the provider. If an employer elects to enter the program and the employer fails to pay a bill for a medical-only claim included in the program, the employer shall be liable for that bill and the employee for whom the employer failed to pay the bill shall not be liable for that bill.

(H) Payments made by the employer in this program will not be charged to that employer’s experience modification; however, if a claim has been filed with the bureau and bills paid by the bureau, these payments will be included in the employer’s experience modification. The bureau will not adjust the employer’s experience modification to remove such payments unless the employer has complied with this rule and the bureau has made such payments in contravention of this rule. Failure by an employer to make timely payments on all bills will not affect the coverage of that employer and will not obligate the bureau to pay interest to the medical provider; however, the bureau may exclude employers who do not make timely payment on all bills in this program from participation in this program. An employer may appeal a decision of the bureau excluding the employer from this program to the adjudicating committee under rule 4123-14-06 of the Administrative Code.

(I) An employer who elects to participate in this program may cancel its participation in the program at any time by telephoning the bureau. The bureau will process all related bills in all medical-only claims against that employer’s account after the date of the telephone call.

Effective: 09/10/2007

Promulgated Under: 111.15

Statutory Authority: 4121.12, 4121.121

Rule Amplifies: 4123.29

Prior Effective Dates: 3/1/95, 7/22/06

The administrator of workers’ compensation, with the advice and consent of the bureau of workers’ compensation board of directors, has authority to approve contributions made to the state insurance fund by employers pursuant to sections 4121.121, 4123.29, and 4123.34 of the Revised Code. The administrator hereby establishes annuity factors for use in establishing claims reserves and premium rates as indicated in the attached Appendixes A, B, C, D, and E. The basis and interest factor of each annuity factor table is indicated on the appendix.

Appendix A

SURVIVOR ANNUITY FACTORS

AGE     FACTOR     AGE     FACTOR     AGE     FACTOR

17       949       48       879       79       519

18       953       49       873       80       502

19       956       50       867       81       485

20       957       51       861       82       467

21       958       52       854       83       450

22       958       53       846       84       433

23       957       54       839       85       416

24       957       55       831       86       399

25       956       56       823       87       382

26       955       57       814       88       366

27       954       58       805       89       350

28       952       59       796       90       335

29       951       60       786       91       321

30       949       61       776       92       308

31       946       62       765       93       295

32       944       63       754       94       283

33       941       64       742       95       271

34       938       65       730       96       260

35       935       66       718       97       249

36       932       67       705       98       237

37       929       68       692       99       226

38       925       69       678       100       215

39       922       70       664       101       203

40       918       71       649       102       192

41       913       72       634       103       180

42       909       73       619       104       168

43       905       74       603       105       156

44       900       75       586       106       144

45       895       76       570       107       133

46       890       77       553       108       121

47       885       78       536       109       111

110       100

NOTE: Factors are annuities per dollar of weekly compensation benefit from the attained age indicated.

SOURCE: 2000a Basic Female Mortality Table, modified remarriage factors, 5.00% interest.

Appendix B

PTD ANNUITY FACTORS                  REGULAR INJURY

AGE     FACTOR     AGE     FACTOR     AGE     FACTOR

17       922       48       659       79       282

18       918       49       647       80       270

19       913       50       635       81       259

20       908       51       623       82       248

21       903       52       612       83       237

22       898       53       600       84       226

23       892       54       588       85       216

24       887       55       576       86       207

25       881       56       565       87       198

26       875       57       553       88       190

27       869       58       541       89       183

28       863       59       529       90       176

29       856       60       518       91       169

30       849       61       506       92       163

31       842       62       494       93       155

32       834       63       482       94       148

33       826       64       470       95       141

34       817       65       457       96       134

35       808       66       444       97       128

36       798       67       432       98       122

37       788       68       419       99       115

38       778       69       406       100       109

39       767       70       393       101       103

40       755       71       382       102       96

41       744       72       370       103       89

42       732       73       357       104       83

43       720       74       344       105       76

44       708       75       332       106       70

45       695       76       319       107       64

46       683       77       306       108       58

47       671       78       294       109       52

110       47

NOTE: Factors are annuities per dollar of weekly compensation benefit from the attained age indicated.

SOURCE: 2001 Mortality Study of Ohio permanent total disability claims, 5.00% interest.

Appendix C

PTD ANNUITY FACTORS         Occupational Disease – Lung

AGE     FACTOR     AGE     FACTOR     AGE     FACTOR

17       874       48       567       79       202

18       869       49       553       80       192

19       863       50       540       81       182

20       857       51       528       82       173

21       851       52       515       83       164

22       845       53       502       84       155

23       839       54       490       85       146

24       832       55       478       86       138

25       825       56       466       87       131

26       818       57       454       88       124

27       811       58       442       89       119

28       804       59       431       90       114

29       796       60       419       91       109

30       788       61       408       92       104

31       779       62       396       93       98

32       770       63       385       94       93

33       761       64       373       95       88

34       751       65       361       96       83

35       740       66       349       97       78

36       728       67       337       98       74

37       716       68       324       99       69

38       704       69       313       100       65

39       691       70       301       101       60

40       677       71       291       102       56

41       663       72       280       103       51

42       649       73       269       104       47

43       635       74       257       105       42

44       621       75       246       106       38

45       607       76       235       107       33

46       594       77       223       108       29

47       580       78       213       109       26

110       26

NOTE: Factors are annuities per dollar of weekly compensation benefit from the attained age indicated.

SOURCE: 2001 Mortality Study of Ohio permanent total disability claims, 5.00% interest.

Appendix D

PTD ANNUITY FACTORS         Occupational Disease – Non Lung

AGE     FACTOR     AGE     FACTOR     AGE     FACTOR

17       922       48       659       79       282

18       918       49       647       80       270

19       913       50       635       81       259

20       908       51       623       82       248

21       903       52       612       83       237

22       898       53       600       84       226

23       892       54       588       85       216

24       887       55       576       86       207

25       881       56       565       87       198

26       875       57       553       88       190

27       869       58       541       89       183

28       863       59       529       90       176

29       856       60       518       91       169

30       849       61       506       92       163

31       842       62       494       93       155

32       834       63       482       94       148

33       826       64       470       95       141

34       817       65       457       96       134

35       808       66       444       97       128

36       798       67       432       98       122

37       788       68       419       99       115

38       778       69       406       100       109

39       767       70       393       101       103

40       755       71       382       102       96

41       744       72       370       103       89

42       732       73       357       104       83

43       720       74       344       105       76

44       708       75       332       106       70

45       695       76       319       107       64

46       683       77       306       108       58

47       671       78       294       109       52

110       47

NOTE: Factors are annuities per dollar of weekly compensation benefit from the attained age indicated.

SOURCE: 2001 Mortality Study of Ohio permanent total disability claims, 5.00% interest.

Appendix E

Orphans Annuity Factors

Year     Factor     Year     Factor     Year     Factor

1       24       11       406       21       641

2       71       12       435       22       658

3       116       13       462       23       675

4       158       14       489       24       692

5       199       15       514       25       707

6       238       16       538       26       722

7       275       17       560       27       735

8       310       18       582       28       749

9       344       19       602       29       761

10       376       20       622       30       773

Note: Factors are annuities per dollar of weekly compensation benefit for the number of years indicated, 5.00% interest.

Source: Handbook of Mathematical Tables and Formulas, 4th Ed. Richard Stevens Burington, PH.D., McGraw-Hill

Effective: 12/31/2007

Promulgated Under: 111.15

Statutory Authority: 4121.12, 4121.121, 4121.13

Rule Amplifies: 4123.29, 4123.34

Prior Effective Dates: 3/1/94, 12/31/98, 12/31/99, 12/31/00, 12/31/02, 12/31/03, 12/31/05

(A) The administrator shall offer a plan that groups employers for rating purposes. Employers shall retain their separate risk identity, but shall be pooled and grouped for rating purposes only, specifically with respect to experience rating.

(B) In establishing a group for group rating purposes, the sponsoring group organization or individual employers in the group must satisfy all of the following requirements and must meet all the sponsorship rules as provided in rule 4123-17-61.1 of the Administrative Code:

(1) All of the employers within the group must be governing members of the sponsoring organization or the affiliate organization.

(2) The employers’ business in the organization must be substantially similar such that the risks which are grouped are substantially homogeneous. A group shall be considered substantially homogeneous if the main operating manuals of the risks as determined by the premium obligations for the rating year beginning two years prior to the coverage period are assigned to the same or similar industry groups. Industry groups are determined by appendix B to rule 4123-17-05 of the Administrative Code. Industry groups seven and nine as well as eight and nine are considered similar.

The bureau may allow an employer to move to a more homogeneous group when, after December thirty-first for private employer groups and June thirtieth for pubic employer taxing district groups but before the application deadline for group rating, the employer:

(a) Is a new employer;

(b) Is reclassified as a result of an audit; or

(c) Fully or partially combines with another employer.

(3) The group of employers must consist of at least one hundred individual risk members or a group where the aggregate workers’ compensation premiums of the members are, as determined by the administrator, expected to exceed one hundred fifty thousand dollars during the coverage period. For public employer taxing districts, the coverage period shall be January first through December thirty-first of a year. For private employers, the coverage period shall be July first through June thirtieth of the following year.

(4) Each employer seeking to enroll in a group for workers’ compensation coverage must have active workers’ compensation coverage according to the following standards:

(a) Unless the employer submits prior to the application deadline a dispute of the obligation to the bureau’s adjudicating committee by a written letter containing the detailed reasons for the objection and the supporting documentation, the employer must be current (not more than forty-five days past due) on any and all premiums, administrative costs, assessments, fines or monies otherwise due to any fund administered by the Ohio bureau of workers’ compensation, including amounts due for retrospective rating, at the time of the application deadline date as defined in paragraph (B) of rule 4123-17-62 of the Administrative Code;

(b) As of the deadline for the application for group rating, the employer must be current on the payment schedule of any part-pay agreement into which it has entered for payment of premiums or assessment obligations;

(c) The employer cannot have cumulative lapses in workers’ compensation coverage in excess of fifty-nine days within the eighteen months preceding the application deadline date for group rating. Beginning January 1, 2010, for public employer taxing district groups and July 1, 2010, for private employer groups, the employer cannot have cumulative lapses in workers’ compensation coverage in excess of forty days within the twelve months preceding the application deadline date for group rating. However, the cumulative lapse period under this section that was used to disqualify an employer from participating in a group rating plan the previous year will not be used to disqualify the employer in future years;

(d) An employer whose coverage status becomes cancelled or combined during the rating year may not participate in group rating. The effective date of the removal from the group rating program shall be on the first day of the next payroll reporting period (January first or July first) or in cases where the date of cancellation or combination is determined to be January first or July first, the employer shall be removed from group as of the actual date of cancellation or combination. An employer who becomes active and obtains coverage after the group rating application deadline may not participate in group rating for that year except as defined in rule 4123-17-66 of the Administrative Code.

(C) In providing employer group plans under section 4123.29 of the Revised Code, the bureau shall consider an employer group as a single employing entity for purposes of group rating. No employer may be a member of more than one group for the purpose of obtaining workers’ compensation coverage. Applying for more than one group on a valid application for group rating will result in rejection of the employer from all groups for which the employer applied.

Effective: 06/22/2009

Promulgated Under: 111.15

Statutory Authority: 4121.12, 4121.121

Rule Amplifies: 4123.29

Prior Effective Dates: 10/2/90, 11/11/91, 9/14/92, 11/8/99, 7/1/01, 3/9/09

(A) The following certification requirements shall apply to all sponsoring organizations that seek to make application for either the group rating plan effective January 1, 2010, as provided for in rule 4123-17-61 of the Administrative Code, or the group retrospective rating plan effective July 1, 2009, as provided in rule 4123-17-73 of the Administrative Code, known collectively as group programs.

(B) The sponsoring organization must have been in existence for at least two years prior to the last date upon which the group’s application for coverage may be filed with the bureau of workers’ compensation as provided in rule 4123-17-62 of the Administrative Code.

(C) The organization must be formed for a purpose other than that of obtaining group workers’ compensation coverage. The bureau shall require the organization to demonstrate this through submission of required evidence and documentation. As long as all of the other criteria of this rule are satisfied, a parent corporation may be a sponsoring organization and, if it qualifies under the criteria of this rule, a member of a group of its subsidiary corporations for purposes of group programs. A sponsoring organization may sponsor more than one group.

(D) The formation and operation of a group program in the organization must substantially improve accident prevention and claims handling for the employers in the group. The bureau shall require the group to document its plan or program for these purposes, and, for groups reapplying annually for group coverage, the results of prior programs.

Following the conclusion of the July 1, 2008 to June 30, 2009 policy year, the bureau will report annually on the aggregate performance of all groups.

(E) A sponsoring organization shall satisfy all of the requirements for a sponsoring organization as required under section 4123.29 of the Revised Code and in this rule. A sponsoring organization shall submit to the bureau information to demonstrate that the organization meets the requirements for sponsorship. The bureau shall review the information and shall register the sponsoring organization if it meets the requirements. A sponsoring organization shall be registered and be certified by the bureau prior to marketing to or soliciting employers for membership in a group under the group programs.

(1) The bureau shall re-certify all sponsoring organizations between March 1, 2009, and June 30, 2009. If the bureau certifies a sponsoring organization, the sponsoring organization shall be permitted to sponsor a group retrospective rating program under rule 4123-17-73 of the Administrative Code beginning July 1, 2009, and to sponsor groups in the current group rating program under this rule beginning January 1, 2010. The bureau shall review the certification of a sponsoring organization at least once every three years or on a more frequent basis as determined by the bureau.

(2) A sponsoring organization that seeks to be certified by the bureau shall provide to the bureau the following:

(a) The sponsoring organization’s workers’ compensation policy number and proof of active workers’ compensation coverage;

(b) The name of the sponsoring organization’s third party administrator, if applicable;

(c) A copy of the sponsoring organization’s marketing materials (web site, brochures, etc.), including a description of the services related to group rating as well as other services provided by the sponsor;

(d) A list of all sponsoring organizations affiliated with the sponsoring organization. For the purpose of this rule, an “affiliated” organization is an organization in which members are brokered, borrowed, shared, or co-opted for inclusion in the certified sponsoring organization’s group. All affiliated organizations are required to be certified sponsors as provided in this rule.

(e) A copy of the sponsoring organization’s articles of incorporation;

(f) A copy of the sponsoring organization’s mission statement;

(g) A completed application form, signed by the sponsor, which includes disclosure of nine-hundred-ninety filings with the Internal Revenue Service and counts of all members (both group and non-group);

(h) A copy of the sponsor’s safety plan.

(i) With reasonable notice, the bureau may request that a sponsor provide for the bureau’s inspection at the sponsor’s designated location any of the following: additional financial information, dues structure, revenue sources, a table of organization, a comprehensive membership roster, by-laws, and/or a list of corporate officers.

(F) The sponsoring organization shall provide to the bureau a signed statement certifying the accuracy of the information provided to the bureau. A sponsoring organization’s failure to provide accurate information or submission of false information may be grounds for the bureau to refuse to certify the sponsoring organization or to decertify the sponsoring organization. The bureau reserves the authority to use all the listed information above and any other information available to make the certification approval.

(G) Should the bureau deny the certification of the sponsoring organization, the applicant may appeal to the bureau adjudicating committee. After exhausting all administrative appeals and correction of sponsorship requirement deficiencies, the applicant may reapply one year after the latest certification denial.

(H) The bureau will collect this information and retain it or ask that a sponsoring organization maintain the information for bureau inspection upon request.

(I) The sponsoring organization shall be in compliance with all bureau rules. A sponsoring organization’s non-compliance may result in decertification.

(J) The sponsoring organization, or their authorized representative, shall have the capability to send and receive secure electronic (FTP – file transfer protocol) files.

(K) Group marketing.

(1) A sponsoring association, affiliate, or representative, including, but not limited to, a third-party administrator, broker, or marketer may not provide marketing material that is either false or unattainable to an employer relating to the process of forming groups under either the group-experience rating plan or group-retrospective rating plan for the July 1, 2010 policy year. Prohibited marketing material under this rule is any communication that:

(a) Instructs prospective participants to provide false information on forms used for purposes of group formation, including the AC-3, the AC-26, and the U-153.

(b) Claims the sponsoring association, affiliate, or representative is endorsed by the bureau or the state of Ohio.

(c) Offers or estimates specific discounts or refunds that are unattainable to prospective participants in either group-experience rating or group-retrospective rating.

(i) For group-experience rating, “unattainable” is defined as exceeding the maximum discount established by the credibility table as approved by the bureau of workers’ compensation board of directors.

(ii) For group-retrospective rating, “unattainable” is defined as quoting a specific refund amount that exceeds the maximum possible refund when considering the basic premium factor for the maximum premium ratio selected as approved by the bureau of workers’ compensation board of directors.

(2) The bureau may apply the following sanctions upon its determination of a violation of this rule:

(a) For a violation of paragraph (K)(1)(c) of this rule the bureau may place that group sponsor at capacity for the 2010 policy year.

(i) For sponsors that filed group rosters with the bureau for the July 1, 2009, policy year, “capacity” is defined as prohibiting a sponsor association from exceeding the total number of employers in their 2009 groups, adding new employers for groups they may form in 2010, and affiliating with any other group sponsors for the 2010 policy year.

(ii) For sponsors that have not filed group rosters with the bureau for the July 1, 2009, policy year, “capacity” means they will not be able to form groups and cannot affiliate with other group sponsors for the 2010 policy year.

(b) For a violation of paragraph (K)(1)(a) or (K)(1)(b) of this rule, along with any action that results in knowingly falsifying information on forms submitted to the bureau, the bureau shall immediately revoke the sponsor’s certification for the 2010 policy year.

(3) The bureau will provide the bureau of workers’ compensation board of directors a report by no later than the April board meeting regarding sanctions and corrective actions taken by the bureau with respect to this rule.

Effective: 08/10/2009

Promulgated Under: 111.15

Statutory Authority: 4121.12, 4121.121

Rule Amplifies: 4123.29

Prior Effective Dates: 10/2/90, 11/11/91, 9/14/92, 11/8/99, 7/1/01, 3/9/09

(A) A sponsoring organization shall make application for group experience rating on a form provided by the bureau and shall complete the application in its entirety with all documentation attached as required by the bureau. If the sponsoring organization fails to include all pertinent information, the bureau will reject the application.

(1) The group application shall be signed each year by an officer of the sponsoring organization to which the members of the group belong, and the sponsoring organization shall identify each individual employer in the group in the AC-25 application and shall provide information on each employer as follows:

(a) All employers which were in the group in the previous rating year. The employer does not need to file an AC-26 form.

(b) All employers which were not in the group in the previous rating year, but were in another group of the same sponsoring organization for the previous rating year. The employer does not need to file an AC-26 form.

(c) All employers which were not in the group in the previous rating year, and were not in another group of the same sponsoring organization for the previous rating year. The employer must file an AC-26 form for the group. Effective July 1, 2009 for private employer groups and January 1, 2010 for public employer taxing district groups, the sponsoring organization does not need to file the AC-26 form with the bureau, but shall maintain the original AC-26 form at the sponsoring organization to be available to the bureau upon the bureau’s request. The AC-26 must be date stamped by the group rating filing deadline.

(2) In a separate report, or on the AC-25 form in a manner that clearly distinguishes the employers which are in the group from those which are not in the group, the sponsoring organization shall provide information on each employer as follows:

(a) All employers which were in the group in the previous rating year and are no longer in the group, but are in another group of the same sponsoring organization. The employer does not need to file an AC-26 form.

(b) All employers which were in the group in the previous rating year, are no longer in the group, and are not in another group of the same sponsoring organization. If the employer is participating in group rating with another sponsoring organization, the employer must file an AC-26 form for that group.

(3) An individual employer’s application for group rating (AC-26) is applicable for the upcoming policy year and all subsequent policy years where the employer remains in the same group or another group sponsored by the same sponsoring organization. The employer does not need to file a new AC-26 each year where the employer remains in any group sponsored by the same sponsoring organization, whether it is the same group as the previous rating year or a new group of the same sponsoring organization. The employer must file an AC-26 if the employer applies for group rating with a different sponsoring organization or was not participating in group rating the previous rating year. Where an employer files a new AC-26 during an application period, it shall be presumed that the latest filed AC-26 of the employer indicates the employer’s intentions for group rating. The employer’s AC-26 shall remain effective until any of the following occurs:

(a) The employer timely files a subsequent AC-26 indicating the desire to participate in a group with a different sponsor for the upcoming policy year;

(b) The sponsoring organization for the group does not include the employer on the group roster (AC-25);

(c) The group does not reapply for group rating or is rejected for failure to meet group eligibility requirements; or

(d) The employer fails to meet individual eligibility requirements and is rejected from participation in the group for the purpose of group rating by the bureau.

(4) The bureau may request of individual employers or the group additional information necessary for the bureau to rule upon the application for group coverage. Failure or refusal of the group to provide the requested information on the forms or computer formats provided by the bureau shall be sufficient grounds for the bureau to reject the application and refuse the group’s participation in group experience rating. Individual employers who are not included on the final group roster or do not have an individual employer application (AC-26) for the same group or another group sponsored by the same sponsoring organization on file by the application deadline will not be considered for the group plan for that policy year; however, the bureau may waive this requirement for good cause shown due to clerical or administrative error, so long as no employer is added to a group after the application deadline. All rosters, computer formats or typewritten, must be submitted by the application deadline.

(5) A sponsoring organization shall notify an employer that is participating in a group of that sponsoring organization if the employer will not be included in a group by that sponsoring organization for the next rating year. For private employer groups, the sponsoring organization shall notify the employer in writing prior to the first Monday in February of the year of the group application deadline; except that for 2009 only, the sponsoring organization shall notify the employer in writing by April 6, 2009. For public employer taxing district groups, the sponsoring organization shall notify the employer in writing prior to the second Friday of August of the year of the group application deadline, except that for 2010 only, the sponsoring organization shall notify the employer in writing by September 16, 2009. If an employer notifies the bureau that a sponsoring organization has not complied with this rule and the sponsoring organization fails to prove that the notice was provided in a timely manner, the bureau will, without the approval of the sponsoring organization, allow the employer to remain in the group for the rating year for which the notice was required. If that group no longer exists the bureau will, without the approval of the sponsoring organization, place the employer in a homogeneous group with the same sponsoring organization or take other appropriate action.

(B) For public employer taxing districts, applications for group coverage shall be filed on or before the last Friday of August of the year immediately preceding the rating year, except that for 2010 only, the application for group coverage shall be filed on or before September 30, 2009. For private employers, applications for group coverage shall be filed on or before the last business day of February of the year of the July first beginning date for the rating year; except that for 2009 only, the application for group coverage shall be filed on or before April 24, 2009.

(C) A group’s application for group rating is applicable to only one policy year. The group must reapply each year for group coverage. Continuation of a plan for subsequent years is subject to timely filing of an application on a yearly basis and the meeting of eligibility requirements each year; however, an individual employer member of a continuing group who initially satisfied the homogeneous requirement of paragraph (B)(3) of rule 4123-17-61 of the Administrative Code shall not be disqualified from participation in the continuing group for failure to continue to satisfy such requirement.

(D) The application shall be filed in the risk technical services section of the bureau of workers’ compensation, Columbus, Ohio.

(E) The application for any group to participate in group experience rating is optional with the group, subject to acceptance by the bureau. Once a group has applied for group rating, the organization may not voluntarily terminate the application during the bureau’s evaluation period. All changes to the original application must be filed on a bureau form provided for the application for the group experience rating plan and must be filed prior to the filing deadline. Any rescissions made must be completed in writing, signed by an officer of the organization to which the members of the group belong, and filed prior to the filing deadline. The group may make no changes in the application after the last day for filing the application. Any changes received by the bureau after the filing deadline will not be honored. The latest application form or rescission received by the bureau prior to the filing deadline will be used in determining the premium obligation.

(F) In reviewing the group’s application, if the bureau determines that individual employers in the group do not meet the eligibility requirements for group rating, the bureau will notify the individual employers and the group of this fact, and the group may continue in its application for group coverage without the disqualified employers, if the group still satisfies the minimum requirements for group rating as provided in rule 4123-17-61 of the Administrative Code.

(G) After the group application deadline but before the end of the policy year for the group, the sponsoring organization may notify the bureau that it wishes to remove an employer from participation in the group. The sponsoring organization may request that the employer be removed from the group after the application deadline only for the employer’s gross misrepresentation on its application to the group.

(1) “Gross misrepresentation” is an act by the employer that would cause financial harm to the other members of the group. Gross misrepresentation is limited to any of the following:

(a) Where the sponsoring organization discovers that the employer applicant for group rating has recently merged with one or more entities, such that the merger adversely affects the employer’s experience modification and adversely affects the experience modification of the group, and the employer did not disclose the merger on the employer’s application for membership in the group.

(b) Where the sponsoring organization discovers that the employer applicant for group rating has failed to disclose the true nature of the employer’s business pursuit on its application for membership in the group, and this failure adversely affects the experience modification of the group.

(2) Where the sponsoring organization requests that an employer be removed from the group, the burden of proof is on the sponsoring organization to provide documentation. The bureau shall review the request to remove the employer from the group, and the employer shall be removed from the group only upon the bureau’s consent.

Effective: 08/10/2009

Promulgated Under: 111.15

Statutory Authority: 4121.121, 4121.13, 4121.30

Rule Amplifies: 4123.29

Prior Effective Dates: 10/2/90; 11/11/91; 9/14/92; 1/1/95; 7/1/96; 12/10/96; 11/17/97; 11/8/99; 7/1/01; 1/1/02; 7/1/02; 12/1/02, 2/7/09, 3/30/09

(A) To be eligible for group experience rating, the group taken as a whole must include at least one hundred employers, each employer being identified as a separate risk for state fund identification purposes, or the group taken as a whole must be of sufficient size that the premiums of the members, as determined by the administrator, are expected to exceed one hundred fifty thousand dollars during the coverage period, except as provided by paragraph (C) of this rule. The administrator may determine the aggregate premium of the members based upon the historical premium experience of the members, projected payroll, and anticipated premium rates. The evaluation period for determining aggregate premium shall be the rating year beginning two years prior to the coverage period.

(B) For a group of less than one hundred members, the premium requirement shall be deemed to have been satisfied if the aggregate premium to the state insurance fund for the members of the group for the rating year beginning two years prior to the coverage period exceeded one hundred fifty thousand dollars, except as provided by paragraph (C) of this rule. Failure to reach one hundred fifty thousand dollars in premium during the coverage period shall not negate the group coverage.

(C) The bureau shall calculate the premium based upon the actual experience modified premium of the member employers during the evaluation period, including any modification due to group rating. The administrator may waive the requirement that premiums exceed one hundred fifty thousand dollars during the coverage period for a continuing group of substantially similar membership if the sole reason that the premium fails to exceed one hundred and fifty thousand dollars is due to the premium modification discounts earned by the group as a direct result of safety operations of the group rating program, and not due to other factors, such as a departure of members from the group or a reduction in payroll for members of the group.

HISTORY: Eff 10-2-90; 9-14-92; 10-11-94

Rule promulgated under: RC 111.15

Rule authorized by: RC 4121.121, 4121.13, 4121.30

Rule amplifies: RC 4123.29

(A) A group meeting all the requirements for group rating shall be considered as a single employing entity for purposes of group experience rating. The eligibility of data for use in the group shall be the same as the eligibility of data for use in the individual employer’s rate calculation. Credibility limits and all factors based upon credibility will apply at the group level. For catastrophe claims, the definition of a catastrophe under paragraph (A) of rule 4123-17-12 of the Administrative Code must be satisfied by an individual employer in the group to be eligible for catastrophe claim cost relief, although more than one individual employer in the group may qualify for catastrophe relief from the same catastrophe occurrence. Handicap charges to surplus shall be applied at the group level.

(B) All operations or manuals of a risk electing group rating are subject to group experience rating.

(C) Effective July 1, 2002, except with respect to mergers or transfers of the operations of a business, an employer’s experience may be combined once during a policy year to create an experience modification for multiple employers grouped together for experience rating purposes.

(D) Employers participating in a group rating plan may implement the drug free workplace program.

(E) An employer that is in a cancelled coverage status for at least one full rating year as of the date that the experience modification of a group of which it had been a member is recalculated, will not be liable for any obligation nor will such employer receive the benefit of any credit associated the recalculation.

Effective: 05/21/2009

Promulgated Under: 111.15

Statutory Authority: 4121.12, 4121.121, 4121.13, 4121.30

Rule Amplifies: 4123.29

Prior Effective Dates: 10/2/90, 7/1/01

The administrator will apply an adjustment factor of 1.311 to an employer’s group rated experience modification (EM) that is used in the premium rate calculation.

Effective: 07/01/2009

Promulgated Under: 111.15

Statutory Authority: 4121.121, 4121.13, 4121.30

Rule Amplifies: 4123.29

Effective for the rating year beginning July 1, 1995, for private employers, and the rating year beginning January 1, 1996, for public employer taxing districts, if an individual employer is a member of a group for group experience rating and leaves the group, the experience of that individual employer shall be used in experience-rating calculations for the group to impact only the rating years that the employer was a member of the group. The individual employer leaving the group retains its own experience rating incurred while a member of the group for the balance of the standard experience period. The group shall not be liable for claims experience incurred by an individual employer for claims occurring after the employer has left the group.

HISTORY: Eff 10-2-90; 10-11-94

Rule promulgated under: RC 111.15

Rule authorized by: RC 4121.121, 4121.13, 4121.30

Rule amplifies: RC 4123.29

This rule on termination and transfer of group experience rating shall apply at the group level after the bureau applies the applicable individual rules on transfer of experience.

(A) A group formed for the purpose of group experience rating may not retroactively include experience in a plan, exclude experience from a plan, or voluntarily terminate a plan during the policy year. A change in the name of the group will not constitute a new group. A change of the organization sponsoring a group or moving a group to a new sponsoring organization shall constitute a new group and the members of the new group must meet the homogeneity requirement of paragraph (B)(3) of rule 4123-17-61 of the Administrative Code. The amendments contained in this paragraph of this rule shall be effective for rating years beginning July 1, 2002, and thereafter. A group will be considered a continuing group if more than fifty per cent of the members of the group in the previous rating year are members of the group in the current rating year.

(B) Successor: Files petition for bankruptcy

Predecessor: No predecessor

An individual employer which is a member of a group for the purpose of experience rating and which becomes a debtor-in-possession during the policy year shall remain a member of the group for the entire policy year.

(C) Successor: Entity not having coverage

Predecessor: Group rated with employees and reported payroll

Where one legal entity not having coverage in the most recent experience period wholly or partially succeeds another legal entity in the operation of a business, and the predecessor entity was a member of a group for experience rating, the successor shall be considered a member of the group and the successor entity’s rate shall be based on the group’s experience, as long as the successor employer is homogeneous to the group. For a partial transfer, the effective date of the group experience transfer shall be on the first day of the next payroll reporting period (January first or July first).

(D) Successor: Group rated

Predecessor: Experience rated (either individually or in a different group), or non-group base rated

Where a legal entity having established coverage is a member of a group for experience rating and wholly succeeds another legal entity, the successor entity shall remain a member of the group for experience rating and the experience of the predecessor shall be included with the experience of the group for the purpose of experience rating.

(E) Successor: Non-group rated

Predecessor: Group rated

Where a legal entity having established coverage is a member of a group for the purpose of experience rating and is wholly succeeded by another legal entity which is not a member of the group, the successor entity shall not become a member of the group.

(F) Successor: Group rated

Predecessor: Group rated

Where a legal entity which is a member of group for the purpose of experience rating wholly succeeds another legal entity which is also a member of the same group for the purpose of experience rating, the successor entity shall remain a member of the group for the purpose of experience rating.

(G) Successor: Group rated

Predecessor: Self-insured

When an individual employer which has returned to the state insurance coverage from self-insured status and has used the self-insured experience in calculating the experience rate becomes a member of a group for the purpose of experience rating, the self-insured experience shall not be included in the experience of the group for rating purposes.

(H) Successor Group rated

Predecessor: Non-group rated

Where a legal entity succeeds in the operation of a portion of a business of another legal entity and the successor entity is a member of a group for experience rating, the successor entity shall remain a member of the group for experience rating and the experience of the predecessor shall be included with the experience of the group for the purpose of experience rating. The effective date of the group experience transfer shall be on the first day of the next payroll reporting period (January first or July first).

(I) Successor: Non-group rated

Predecessor: Group rated

Where a legal entity having established coverage succeeds in the operation of a portion of a business of another legal entity and the successor entity is not a member of a group and the predecessor is a member of a group for experience rating, the successor entity will not become a member of the group for experience rating and the predecessor will remain a member of the group.

(J) Successor: entity not having coverage

Predecessor: Group rated with no employees and no reported payroll

Where one legal entity not having coverage in the most recent experience period wholly or partially succeeds another legal entity in the operation of a business, and the predecessor entity was a member of a group for experience rating, the successor entity shall not become a member of the group unless and until the entity applies for membership in the group in the next experience period.

(K) When any combination or transfer of experience is indicated, the effective date of such combination or transfer shall be the beginning date of the next following payroll reporting period. In cases where an entity not having coverage wholly succeeds another entity, the effective date shall be the actual date of succession.

(L) An individual employer which is a member of a group for the purpose of experience rating may not participate in a retrospective rating plan during the policy year in which the employer is a member of the group.

HISTORY: Eff 10-2-90; 11-11-91; 9-14-92; 10-11-94; 11-8-99; 7-1-01

Rule promulgated under: RC 111.15

Rule authorized by: RC 4121.121, 4121.13, 4121.30

Rule amplifies: RC 4123.29

(A) A group that has been established and has been accepted by the bureau of workers’ compensation for the purpose of group experience rate calculation shall have no more than one permanent authorized representative for representation of the group and the individual employers of the group before the bureau and the industrial commission in any and all risk-related matters pertaining to participation in the workers’ compensation fund.

(B) The selection of an authorized representative must be made by submission of a completed form AC-2, and any change or termination of the authorized representative can be made only by a subsequent submission of form AC-2. Only an officer of the group may sign an AC-2.

(C) Notwithstanding the provisions of division (A) of this rule, an individual risk in a group may retain the services of an attorney or other authorized representative for claims-related matters, such as representation at claims hearings before the bureau and the industrial commission, through submission of the appropriate authorization for representation in such individual claim files. The bureau will recognize only one authorized representative for notice and appeal purposes.

HISTORY: Eff 10-2-90; 10-11-94; 11-8-99

Rule promulgated under: RC 111.15

Rule authorized by: RC 4121.12, 4121.121

Rule amplifies: RC 4123.29

(A) The purpose of this rule is to establish minimum safety requirements for group experience and group retrospective rating as provided by section 4123.29 of the Revised Code.

(B) The bureau safety and hygiene division, upon the request of the sponsoring organization, shall provide assistance with implementing all of the provisions of this rule.

(C) The sponsoring organization of a group or group retrospective plan shall document its program to improve accident prevention and claims handling for the employers in the group with the group and group retrospective application, and, for an existing group reapplying for group coverage annually, shall document the effectiveness of prior programs as stipulated in paragraph (D) of this rule and any proposed improvements to these programs.

(1) Within sixty days after the application filing deadline, a bureau division of safety and hygiene loss prevention representative shall review the group’s safety program. The safety and hygiene representative shall contact the group sponsor or its authorized representative to assist in further developing an appropriate safety program if there are deficiencies in the program. All sponsoring organizations shall be required to sponsor a minimum of eight hours of safety seminar (or safety seminars) during the rating year for members of their group rating program. A bureau representative may attend these seminars to ensure the requirement is being met. If the requirement is not met, the sponsoring organization will be ineligible to sponsor a group rating program the following year.

(2) If an employer that participates in group rating or group retrospective rating plan sustains a claim within the “green year” period or the prior year, the employer shall attend an additional two hours of safety training annually. The training can be offered by the sponsoring organization, the sponsoring organization’s third party administrator, or the bureau. The bureau shall reserve the right to request information from the sponsor to ensure compliance.

(3) The bureau safety and hygiene division shall make a recommendation to the bureau underwriting section on whether the group’s safety program is acceptable for policy years beginning January 1, 1997. A copy of the recommendations and findings of the safety and hygiene division shall be mailed to the sponsoring organization or its authorized representative at the same time. The underwriting section shall consider this recommendation in making its decision whether to approve the group rating application at the time of renewal. The underwriting section shall notify the sponsoring organization of the necessary changes and provide the sponsoring organization fourteen days to resubmit its group safety program with the recommended changes.

(4) The bureau safety and hygiene division shall evaluate the group’s safety program at the sponsoring organization level and not at the individual member level.

(5) If the bureau’s underwriting section does not approve a group for group rating based upon the group’s safety program, the sponsoring organization may request a hearing before the adjudicating committee pursuant to rule 4123-14-06 of the Administrative Code.

(D) The following are guidelines and criteria that a sponsoring organization or its representative shall take into account in developing a safety program for its group members.

(1) The sponsoring organization shall utilize the following strategies to help group members improve safety efforts:

(a) Communication and education, as detailed in paragraph (E) of this rule;

(b) Linkage with the division of safety and hygiene, as detailed in paragraph (F) of this rule; and

(c) Communication and promotion of key safety program parameters, as detailed in paragraph (G) of this rule.

(2) Key success factors in managing safety by group member employers are:

(a) Leadership from management;

(b) Communication within and throughout the organization;

(c) Involvement of all employees in the safety process; and

(d) Training and education of employees and supervision in safety management and accident prevention.

(E) Communication and education strategies of the sponsoring organization may include use of the following strategies: newsletters, seminars, consultants, videos, group-sponsored safety committees, personal contact, brochures, booklets, stickers, manuals, self-help documents, claims review and analysis, identifying key personnel within the sponsoring organization, and training in safety management for the sponsoring organization staff or representative.

(F) Linkage of the group-sponsoring organization with the division of safety and hygiene may include the following strategies:

(1) The bureau shall link each sponsoring organization with a service representative from safety and hygiene.

(2) Safety and hygiene shall review and comment on group’s safety plans.

(3) Safety and hygiene and the sponsoring organization may sponsor joint seminars.

(4) The sponsoring organization may use the safety congress to augment group safety communication and training.

(5) Safety and hygiene shall provide a list of resources and expertise within each region.

(6) The sponsoring organization may promote bureau safety and hygiene division training.

(7) Safety and hygiene may develop half day training sessions for remote locations.

(8) Safety and hygiene may provide written safety and hygiene safety and health materials to companies.

(9) The sponsoring organization may use bureau safety and hygiene division expertise to help companies improve the management of safety (direct consultation with top managers).

(10) Safety and hygiene may provide video teleconferencing of topic-related seminars.

(11) Safety and hygiene and the sponsoring organization may develop joint programs in response to member needs.

(G) The sponsoring organization or its representative shall communicate, educate, and verify the following key safety program parameters to group members:

(1) A written safety and health policy signed by the top company official that expresses the employer’s values and commitment to workplace safety and health.

(2) Visible senior management leadership that promotes the belief that the management of safety is an organizational value.

(3) Employee involvement and recognition that affords employees the opportunity to participate in the safety management process.

(4) A program of regular communications on safety and health issues to keep all employees informed and to solicit feedback and suggestions.

(5) Orientation and training for all employees.

(6) Published safe work practices so that employees have a clear understanding of how to safely accomplish their job requirements.

(7) Assigning an individual the role of coordinating safety efforts for the company.

(8) Early return-to-work strategies to help injured or ill workers return to work.

(9) Internal program verification to assess the success of company safety efforts, to include audits, surveys, and record analysis.

(10) All applicable OSHA required programs are developed and associated training conducted.

(H) The division of safety and hygiene shall schedule annual regional training seminars for sponsoring organizations. Each sponsoring organization must send at least one representative to the seminar. Additionally, the division of safety and hygiene shall develop a list of publications and support materials that assist the sponsoring organization in reinforcing the safety guidelines of this rule.

Effective: 03/09/2009

Promulgated Under: 111.15

Statutory Authority: 4121.12, 4121.121

Rule Amplifies: 4123.29

Prior Effective Dates: 7/1/96, 7/1/01

(A) This rule describes the elements of the bureau’s ten step business plan for the purpose of any bureau program that requires the employer to implement a ten step business plan.

(B) The ten step business plan is designed by the bureau division of safety and hygiene as provided in this rule. The ten steps of the business plan are as follows:

(1) Visible senior management leadership that promotes the belief that the management of safety is an organizational value.

(2) Employee involvement and recognition that affords employees the opportunity to participate in the safety management process.

(3) Early return-to-work strategies to help injured or ill workers return to work.

(4) A program of regular communications on safety and health issues to keep all employees informed and to solicit feedback and suggestions.

(5) Timely notification of accidents, including lag time reporting standards. Under the health partnership program, an employer must immediately report its claims to its managed care organization.

(6) Assigning an individual the role of coordinating safety efforts for the company. The coordinator shall attend a bureau safety and hygiene course or a bureau approved safety course and shall document the attendance to the bureau. An employee designated as the accident prevention coordinator who has a bureau recognized health and safety credential (CSP, CIH, CIE, or any other comparable safety certification) is exempt from mandatory attendance at a safety course under this paragraph. If the employer is exempt, the employer shall submit a copy of the certificate of the employee’s such designation.

(7) Writing an orientation and training plan for all employees.

(8) Publishing a general and job specific safe work practices document so that employees have a clear understanding of how to safely accomplish their job requirements.

(9) Publishing a written safety and health policy document signed by the top company official that expresses the employer’s values and commitment to workplace safety and health.

(10) Internal program verification to assess the success of company safety efforts, to include audits, surveys, and record analysis.

(C) The bureau will evaluate the employer’s compliance with all ten steps of the ten step business plan based upon the employer’s plan of action report and supporting documentation and information on the progress of the implementation of the ten step business plan.

(D) The bureau may grant certification as a ten step business plan for safety sponsor to any trade or business association or its authorized representative that satisfies all of the following eligibility requirements. The bureau shall determine whether the association or its agent is eligible for certification as a sponsor under this rule. An association or its agent that is found to be ineligible to be a certified sponsor may reapply in subsequent years. The sponsor shall:

(1) Have been in existence for at least two years prior to the last date upon which a request for certification can be filed.

(2) Have at least two years experience in assisting Ohio employers in accident prevention and claims management.

(3) Have on staff or unlimited access to a practicing safety and health professional, excluding bureau personnel, with at least five years experience working full-time in accident prevention.

(4) Sign an agreement with the bureau to fully support the basic principles associated with managing occupational safety in accordance with the bureau’s ten step business plan. The agreement must indicate the commitment of the association or its agent to the criteria for continued participation as specified in paragraph (B) of this rule.

(E) Any trade or business association or its authorized agent meeting the above eligibility requirements must submit documentation supporting all eligibility requirements to the bureau’s superintendent of the division of safety and hygiene for certification.

(F) If the bureau determines that a trade or business association or its authorized agent is eligible to be a certified sponsor under this rule, the association or its agent must comply with the following standards. The sponsor shall:

(1) Include in the agreement or contract to provide services under this program to a sponsored employer, in bold type, that the services provided under this agreement or contract by the sponsor are available at no additional fee to the employer from the bureau of workers’ compensation.

(2) Send the sponsor’s safety and health professional to attend a bureau sponsored course or seminar on basic safety principles and the ten step business plan prior to certification.

(3) Send the sponsor’s safety and health professional to attend an annual safety conference sponsored by the bureau’s division of safety and hygiene.

(4) Hold an annual full-day conference on managing safety and claims for all sponsored employers. An attending employer is to complete the bureau’s plan of action for all ten steps indicating what actions the employer will complete to fulfill the ten step business plan.

(5) Communicate at least quarterly to all sponsor employers current and pertinent safety and health information.

(6) Communicate at least quarterly to all sponsored employers specific guidance on implementing and maintaining the ten step business plan.

(7) Annually assess the safety perceptions and safety needs of each sponsored employer and adjust its approach to meet each employer’s needs.

(8) Notify the bureau of a change in its safety and health professional and apply for re-certification at the time.

(9) Submit a complete list, in the format provided by the bureau, containing each sponsored employer’s policy number, name, and federal employer identification number in policy number order, of all private employers it will sponsor annually to the bureau by the last business day in August for those employer that began the program on July first and by the last business day in February for those employers that began the program on January first.

(10) Assist all sponsored employers in implementing and complying with the bureau’s ten step business plan.

(11) Objectively evaluate the plan of action report of all sponsored employers using the evaluate guidelines outlined in the ten step business plan for safety of this rule.

(12) Submit a list, in the format provided by the bureau, containing each sponsored employer’s policy number, name, federal employer identification number, and an indication of the pass or fail for each employer, in policy number order, of all private employers to the bureau by June first and December first.

(13) Submit to the bureau upon request the plan of action report, evaluation score justification, and any other documentation, such as safety audits, that will support the analysis of the sponsored employer.

(14) Safety professionals of a certified sponsor must make at least one on-site consultation during each year of an employer’s participation. Documentation of discussions with an employer official or employer representative during a visit shall be furnished to the bureau on request.

(15) A certified sponsor must write a letter of instruction to each employer desiring to switch to a bureau sponsor and shall immediately provide a copy to the bureau.

(G) The bureau retains all rights provided under its rule with respect to all certified sponsored employers.

(H) The bureau may de-certify a trade or business association or its authorized agent as a sponsor under this program for the following:

(1) Failure to meet requirements as outlined in this rule.

(2) Falsification of an evaluation or assessment.

(3) Incorrectly evaluating more than ten per cent of the employer evaluations in any one year.

(4) Failure to notify the bureau within thirty days of a change in safety and health professionals.

(5) Failure to apply for re-certification within thirty days of a change in safety and health professionals.

Effective: 07/01/2009

Promulgated Under: 111.15

Statutory Authority: 4121.12, 4121.121

Rule Amplifies: 4123.34

Prior Effective Dates: 4/1/95, 4/10/01, 7/1/01, 10/10/01, 10/14/02, 5/26/03, 5/21/09

Pursuant to division (E) of section 4123.34 of the Revised Code, the administrator may grant a discount on premium rates to an eligible employer that meets the one claim program (OCP) requirements under the provisions of this rule.

(A) As used in this rule:

(1) “One claim program” or “OCP” means the bureau’s voluntary rate program which offers a private, state fund employer the opportunity to mitigate the impact of a significant claim that would be coming into the employer’s experience for the first time from the green year.

(2) “Significant claim” means a claim whose total value or maximum claim value, whichever is lower, will be greater than the employer’s total limited losses (TLL).

(B) Application and withdrawal processes.

An employer’s participation in the OCP is voluntary and shall be for a maximum of four policy years in relationship to a specific significant claim. The bureau shall evaluate each application to determine the employer’s current eligibility to participate in the OCP at the time of the application and for each year of continuing participation. The bureau shall have the final authority to approve an eligible employer for initial and continued participation in the OCP.

(1) A private state fund employer shall submit a completed application by March thirty-first for the policy year beginning July first of that year; except that for the 2009 deadline only, the employer shall file the application by April 30, 009.

(2) An employer may withdraw from the OCP under this rule at any time. An employer that withdraws from the OCP after receiving a discount will return to its own individual experience rating for the rest of the policy year.

(3) If the employer withdraws from the OCP and has any remaining years in which the significant claim is still in its experience, the employer may reapply for the OCP and designate the same significant claim as its one claim.

(C) Eligibility requirements.

At the time of an employer’s application for the OCP, the employer shall be currently enrolled in a group rating program and shall meet the following program requirements:

(1) The employer shall have no more than four claims in the next experience period including the most recent calendar year with the total cost value of the one significant claim or the employer’s maximum claim value, whichever is lower, greater than the employer’s TLL. The four claims may include up to three medical only claims and one significant claim.

(2) The employer shall be current at the time of the application underwriting review. “Current” means that the employer is not more than forty-five days past due on any and all premiums, assessments, penalties or monies otherwise due to any fund administered by the bureau, including amounts due for retrospective rating at the time of the application deadline. The employer must continue to be current throughout its participation in OCP.

(3) The employer cannot have cumulative lapses in workers’ compensation coverage in excess of fifty-nine days within the eighteen months preceding the March thirty-first application deadline or any time thereafter while participating in the OCP.

(4) An employer in the OCP shall continue to meet all eligibility requirements during each year of participation in the program.

(D) General program requirements.

(1) In signing the application form, the chief executive officer or designated management representative of the employer is certifying to the bureau that the employer will comply with all program requirements.

(2) An employer may have a maximum of three medical only claims at any time in addition to the one significant claim. As a medical only claim exits the employer’s experience period, the employer may include a new medical only claim.

(3) The total number of medical only claims may not exceed three, and the total combined costs of these claims must be below the employer’s TLL.

(4) An employer may participate in the OCP on no more than one claim every four years from the date of the employer’s initial participation in the program. If the combined claim costs for the three medical only claims increase over the TLL, the employer would not be eligible.

(5) Once a claim has been designated as the one significant claim, an employer is not permitted to change the designated claim after the employer’s initial enrollment in the program.

(6) Settled and subrogated claims will be included in the employer’s total claim count.

(7) The employer shall attend the bureau’s “Workers’ Compensation University” and one other BWC-approved training class each participating policy year.

(E) Program benefits.

(1) The bureau will credit an employer that meets all the criteria with a forty per cent discount from the employer’s base rate.

(a) Any employer that has a lower EM% due to the one hundred-per cent year-to-year cap as provided in paragraph (G) of rule 4123-17-03 of the Administrative Code than the forty per cent discount offered under this rule would receive the EM% based on the one hundred-per cent capped EM.

(b) The employer should still apply for the one claim program as provided in this rule to allow the employer to continue in the one claim program in subsequent policy years.

(2) The employer shall be eligible to participate in the bureau’s drug-free workplace program or drug-free EZ program and may add the drug-free discount in addition to the OCP discount.

(F) Removal from program.

The bureau will remove an employer from participation in the OCP at the beginning of the next policy year and, upon removal, will return the employer to its individual experience modifier, under the following circumstances:

(1) If the employer has more than four claims, lost time or medical only, including the one significant claim;

(2) If the combined claim costs of the three medical only claims increase past the TLL;

(3) If the employer fails to meet any of the eligibility or general requirements of paragraph (C) or paragraph (D) of this rule.

(G) An employer may appeal the bureau’s application rejection or the bureau’s participation removal in the OCP to the bureau’s adjudicating committee pursuant to section 4123.291 of the Revised Code and rule 4123-14-06 of the Administrative Code.

Effective: 02/12/2009

Promulgated Under: 111.15

Statutory Authority: 4121.12, 4121.121

Rule Amplifies: 4123.29, 4123.34

Prior Effective Dates: 1/1/05

(A) As used in this rule:

(1) “Coverage period” means the twelve month period beginning July first through June thirtieth for private employers, and January first through December thirty-first for public employers. The deductible selected by the employer will apply only to claims with a date of injury within the coverage period defined in the deductible agreement.

(2) “Deductible” means a specified amount of money that the insured must pay on a claim before the bureau covers the costs of a workers’ compensation claim.

(3) “Modified rate” means the rate that employers who are experience rated pay as a percentage of their payroll. This rate is calculated by taking the base rate and multiplying it by the employer’s experience modification (EM) factor.

(4) “NCCI base rate” means the rate that employers who are not experience rated pay as a percentage of their payroll.

(5) “Policy in good standing” means the employer is current on all payments due to the bureau and is in compliance with bureau laws, rules, and regulations at the time of enrollment or reenrollment.

(6) “Premium” means money paid (due) from an employer for workers’ compensation insurance. It does not include money paid as fees, fines, penalties or deposits.

(7) “Qualified employer” means an employer that has a bureau policy that is in good standing at the time of enrollment or reenrollment. Although the employer may be a qualified employer, the bureau may not accept the employer into the deductible program for other reasons set forth in this rule.

(B) Eligibility requirements.

Each employer seeking to enroll in the bureau deductible program shall have active workers’ compensation coverage and shall meet the following standards:

(1) The employer shall have a bureau policy that is in good standing at the time of enrollment.

(2) The employer shall be a private state funded employer or public employer taxing district. A self-insuring employer or a state agency public employer shall not be eligible for participation in the deductible program.

(3) The employer shall be current on all premium payments and deductible billings as of the original application deadline or anniversary date of participation.

(4) The employer shall have active coverage as of the original application deadline or anniversary date of participation.

(5) The employer shall demonstrate the ability to make payments under the deductible program based upon a credit score established by the bureau on an annual basis which will be applicable to all applicants for the program year. The bureau shall obtain the credit reports from an established vendor of such information.

(6) The employer may not have cumulative lapses in workers’ compensation coverage in excess of forty days within the twelve months preceding the original application deadline or subsequent anniversary deadline wherein the employer seeks renewal in the deductible program.

(C) In selecting an employer deductible program under this rule, the employer must select, on an application provided by the bureau, a per claim deductible amount, which shall be applicable for all claims with dates of injury within a one year coverage period. The employer shall choose one deductible level from the following:

(1) Five-hundred dollars.

(2) One-thousand dollars.

(3) Two-thousand five-hundred dollars.

(4) Five-thousand dollars.

(5) Ten-thousand dollars.

(D) In choosing a deductible amount under paragraph (C) of this rule, the employer may not choose a deductible amount that exceeds twenty-five per cent of the total premium paid by the employer during the most recent full policy year. For a new employer policy, the deductible amount shall not exceed twenty-five per cent of the employer’s expected premium.

(E) The employer shall file the application provided by the bureau and any other paperwork required for enrollment in the deductible program by the bureau by the appropriate enrollment period as follows:

(1) For a private employer, between April first and May thirty-first preceding a policy year that begins on July first.

(2) For a public employer taxing district, between October first and November thirty-first preceding a policy year that begins on January first.

(a) Where the due date falls on a weekend or holiday, the application and any related documentation must be received no later than the next business day following the deadline.

(b) Applications and any supporting documentation may be submitted by U.S. postal service, fax, e-mail containing scanned documentation, or online submission, so long as such paperwork is received by the bureau on or before the due date.

(3) The bureau shall not permit an employer to enroll in a deductible program outside of the deadlines set forth in this rule, except that the bureau will consider a new employer, establishing a policy in Ohio for the first time, for participation where the employer submits its deductible program application to the bureau within thirty days of obtaining coverage.

(F) Renewal in the deductible program at the same level for each subsequent year shall be automatic, subject to review by the bureau of the employer’s continued eligibility under paragraph (B) of this rule, unless the employer notifies the bureau in writing that the employer does not wish to participate in the program or that the employer wants to change the deductible amount for the next coverage period. The employer shall provide such notice to the bureau within the time and in the manner provided in paragraph (E) of this rule.

(G) An employer shall not be permitted to withdraw from the deductible program during the policy year, and no changes shall be made with respect to any deductible amount selected by the employer within the policy year. However, the bureau shall have the option of removing an employer from the deductible program for any of the reasons described in paragraph (L) of this rule.

(H) The bureau shall pay the claims costs under a deductible program and the employer shall reimburse to the bureau the costs under the deductible program as follows:

(1) The bureau shall pay all claims costs in accordance with the laws and rules governing payment of workers’ compensation benefits. The bureau shall include the entire cost in the employer’s experience for the appropriate policy year.

(2) The bureau shall bill the employer on a monthly basis for any claims costs paid by the bureau for amounts subject to the deductible as elected by the employer for the policy year. In addition to amounts paid by the bureau for which the bureau is seeking reimbursement from the employer, such monthly billings shall also reflect the payments to date for any claims to which a deductible is applicable.

(3) The employer shall pay all deductible amounts billed by the bureau within twenty-eight days of the invoice date. The employer will be subject to any interest or penalty provisions to which premiums are subject, including certification to the attorney general’s office for collection.

(4) The employer shall continue to be liable beyond any deductible program period for billings covered under a deductible program for injuries that arose during any period for which a deductible is applicable, regardless of when payment was made by the bureau.

(I) The bureau will apply the premium reduction calculation under the deductible program directly to the NCCI base rate established for the policy year for base-rated employers, or after the modified premium rate is established for experience-rated employers, but prior to any other premium discounts, as well as DWRF and administrative expenses. An individual employer participating in both group rating under rules 4123-17-61 to 4123-17-68 of the Administrative Code and the deductible program under this rule may implement the deductible program and receive the associated premium discounts in addition to the group discount; provided, however, the combined discounts may not exceed the maximum discount allowed under the group rating plan. The bureau will calculate the reduction in accordance with appendix A to this rule, which takes into account both the deductible amount chosen by the employer and the applicable hazard group under the most current version of NCCI as established by the primary manual classification of the employer as determined at the end of the enrollment period for that year.

(1) In determining the primary manual classification and appropriate hazard group, the bureau shall utilize payroll for the rating year beginning two years prior to the period in which the employer is seeking to enroll in the deductible program.

(2) For new employers, the bureau shall base the appropriate primary manual classification and hazard group upon estimated payroll.

(J) Where there is a combination or experience transfer of an employer within a deductible program policy period, following the application of any other rules applicable to a combination or experience transfer, the employer may be eligible to remain in a deductible program as follows:

(1) Successor: entity not having coverage.

Predecessor: enrolled in deductible program currently or in prior policy years.

Where there is a combination or experience transfer, where the predecessor was a participant in the deductible program and the successor is assigned a new policy with the bureau, the successor shall make application for the deductible program within thirty days of obtaining a bureau policy, as set forth in paragraph (E)(3) of this rule. Notwithstanding this election, the successor shall be responsible for any and all existing or future liabilities stemming from the predecessor’s participation in the deductible program prior to the date that the bureau was notified of the transfer as provided under paragraph (C) of rule 4123-17-02 of the Administrative Code.

(2) Successor: enrolled In the deductible program.

Predecessor: not enrolled in the deductible program.

Where there is a combination or experience transfer involving two or more entities, each having Ohio coverage at the time of the combination or experience transfer, and the successor policy is enrolled in the deductible program for the program year, the successor shall automatically remain in the deductible program for the program year and is subject to renewal in accordance with paragraph (F) of this rule.

(3) Successor: not enrolled in deductible program.

Predecessor: enrolled In deductible program.

Where there is a combination or experience transfer involving two or more entities, each having Ohio coverage at the time of the combination or experience transfer, and the successor policy is not enrolled in the deductible program, the predecessor shall not be automatically entitled to continue in the deductible program. The successor may make a formal application should it desire to participate in the deductible program for the next policy year. Whether or not the successor chooses or is otherwise eligible to participate in a deductible program, under paragraph (C) of rule 4123-17-02 of the Administrative Code, the successor remains liable for any existing and future liabilities resulting from a predecessor’s participation in the deductible program.

(K) An employer participating in the deductible program shall be entitled to participate in any other bureau rate program, including group rating, concurrent with its participation in the deductible program, except that an employer cannot utilize or participate in, with respect to any injuries which occur during a period for which the employer is enrolled in a deductible program, the following bureau rate programs:

(1) Retrospective rating, whether group or individual.

(2) The fifteen-thousand medical-only program.

(3) Salary continuation.

(L) The bureau may remove an employer participating in the deductible program from the program, effective the second half of the program year, with thirty days written notice to the employer based upon any of the following:

(1) Where the employer participates in any plan or program prohibited under paragraph (K) of this rule.

(2) Where the bureau certifies a balance due from the employer to the attorney general during the program year.

(3) Where the employer makes direct payments to any medical provider for services rendered or supplies or to any injured worker for compensation associated with a workers’ compensation claim.

(4) Where the employer engages in misrepresentation or fraud in conjunction with the deductible program application process.

Appendix

Summary of Selected Deductible Credits

See Appendix at http://www.registerofohio.state.oh.us/pdfs/4123/0/17/4123-17-72_FF_A_APP1_20090619_1058.pdf

TABLE OF CLASSIFICATIONS BY HAZARD GROUP – PEC

See Appendix at http://www.registerofohio.state.oh.us/pdfs/4123/0/17/4123-17-72_FF_A_APP2_20090619_1058.pdf

Summary of Selected Deductible Credits – PEC

See Appendix at http://www.registerofohio.state.oh.us/pdfs/4123/0/17/4123-17-72_FF_A_APP3_20090619_1058.pdf

Effective: 07/01/2009

Promulgated Under: 111.15

Statutory Authority: 4121.12, 4121.121, 4121.30

Rule Amplifies: 4123.29

Prior Effective Dates: 3/9/09

(A) As used in this rule:

(1) “Group retrospective rating” or “group retro rating” is a voluntary workers’ compensation insurance program offered by the bureau of workers’ compensation. Group retro rating is designed to provide financial incentive to employer groups participating in the program that, through improvements in workplace safety and injured worker outcomes, are able to keep their claim costs below a predefined level.

(2) “Basic premium factor” is a component of the retrospective rating premium formula used to account for insurance charges and costs that are distributed across all employers. The basic premium factor (BPF) is based upon charges for the cost of having retrospective premium limited by the selected maximum premium ratio and the cost of excluding surplus costs from incurred losses.

(3) “Developed losses” or “total incurred losses (developed)” are a component of the retrospective rating premium formula intended to account for the fact that total incurred losses in claims are likely to increase over time. This trend results from a number of factors, including, but not limited to, reactivation of claims and claims that may be incurred but not reported for a substantial period, and result in costs that would otherwise not be captured.

(4) “Evaluation period” means the three-year period beginning immediately after the end of the retro policy year. Annual evaluations will occur three times during the evaluation period at twelve, twenty-four, and thirty-six months after the end of the retro policy year.

(5) “Incurred losses” means compensation payments and medical payments paid to date as well as open case reserves. The total incurred losses will not include surplus costs and will be limited on a per claim basis.

(6) “Loss development factor” means actuarially determined factors that are multiplied by incurred losses of non-PTD/death retro claims to produce developed losses. Loss development factors (LDF) are unique to each retro policy year.

(7) “Maximum premium ratio” means a factor pre-selected by the retro group that is multiplied by the standard premium to determine the maximum retrospective premium for the group.

(8) “Member of a retro group” means the individual employers that participate in a group retro plan of a sponsoring organization.

(9) “Reserve” means the bureau’s estimate of the future cost of a claim at a specific point in time.

(10) “Retro policy year” means the policy year in which an employer is enrolled in group retrospective rating. Claim losses which occur during this year will be tracked for all retro group members and refunds or assessments will be distributed based on those losses in the subsequent evaluation period. The retro policy year start and end date will match that of the rating policy year. For public employer taxing districts, the retro policy year shall be January first through December thirty-first of a year. For private employers, the retro policy year shall be July first through June thirtieth of the following year.

(11) “Standard premium” for the purposes of retro evaluation means the total premium paid by an employer for a given policy year, excluding the assessments for the disabled workers’ relief fund and the administrative cost fund.

(B) Sponsor eligibility requirements.

Each sponsoring organization seeking to sponsor a retro group must be certified under the bureau’s sponsor certification process as specified in rule 4123-17-61.1 of the Administrative Code.

(C) Retro group eligibility requirements.

Each retro group seeking to participate in the bureau group retro program shall meet the following standards:

(1) A retro group must be sponsored by a bureau certified sponsoring organization.

(2) The employers’ business in the organization must be substantially similar such that the risks which are grouped are substantially homogeneous. A group shall be considered substantially homogeneous if the main operating manuals of the risks as determined by the premium obligations for the rating year beginning two years prior to the retro policy year are assigned to the same or similar industry groups. Industry groups are determined by appendix B to rule 4123-17-05 of the Administrative Code. Industry groups seven and nine as well as eight and nine are considered similar. The bureau may allow an employer to move to a more homogeneous group when, after December thirty-first for private employer groups and June thirtieth for pubic employer taxing district groups, but before the application deadline, the employer:

(a) Is a new employer;

(b) Is reclassified as a result of an audit; or

(c) Fully or partially combines with another employer.

(3) A retro group of employers must have aggregate workers’ compensation premiums expected to exceed one million dollars, as determined by the administrator based upon the last full policy year for which premium information is available.

(a) For new employers without a full year of recorded premium, the bureau may use the employer’s expected premium.

(b) The bureau shall calculate the premium based upon the experience modified premium of the individual employers excluding group rating discounts.

(4) The retro group must include at least two employers.

(5) The formation and operation of the retro group program by the organization must substantially improve accident prevention and claims handling for the employers in the retro group. The bureau shall require the retro group to document its safety plan or program for these purposes, and, for retro groups reapplying annually for group retro coverage, the results of prior programs. The safety plan must follow the guidelines and criteria set forth under rule 4123-17-68 of the Administrative Code.

(D) Employer eligibility requirements. Each employer seeking to participate in the bureau group retrospective program shall meet the following standards:

(1) The employer shall be a private state funded employer or public employer taxing district. A self-insuring employer or a state agency public employer shall not be eligible for participation in the group retro program.

(2) Each employer seeking to enroll in a retro group for workers’ compensation coverage must have active workers’ compensation coverage according to the following standards:

(a) Unless the employer submits prior to the application deadline a dispute of the obligation to the bureau’s adjudicating committee by a written letter containing the detailed reasons for the objection and the supporting documentation, the employer must be current (not more than forty-five days past due) on any and all premiums, administrative costs, assessments, fines or monies otherwise due to any fund administered by the Ohio bureau of workers’ compensation, including amounts due for group or individual retrospective rating at the time of the application deadline date.

(b) As of the deadline for the application for group retrospective rating, the employer must be current on the payment schedule of any part-pay agreement into which it has entered for payment of premiums or assessment obligations.

(c) The employer cannot have cumulative lapses in workers’ compensation coverage in excess of forty days within the twelve months preceding the application deadline date for group retro rating.

(3) No employer may be a member of more than one retro group or a retro and non-retro group for the purpose of obtaining workers’ compensation coverage. Applying for more than one group, whether retro or not, on a valid application, will result in the bureau contacting the associated sponsor or sponsors for all groups for which the employer applied. The employer must notify the bureau of the employer’s final group selection. If no notification is received by the start of the policy year, the employer will be rejected from participating in any groups for the year.

(4) An employer must be homogeneous with the industry group of the retro group as defined in paragraph (C)(2) of this rule.

(a) An individual employer member of a continuing retro group who initially satisfied the homogeneous requirement shall not be disqualified from participation in the continuing retro group for failure to continue to satisfy such requirement.

(5) An employer participating in the group retrospective program shall be entitled to participate in any other bureau rate program concurrent with its participation in the group retrospective program, except that an employer cannot utilize or participate in, with respect to any injuries which occur during a period for which the employer is enrolled in group retro, the following bureau rate programs:

(a) Individual retrospective rating;

(b) The $15,000 medical-only program;

(c) Deductible program;

(d) One claim program;

(e) Group rating;

(f) Drug-free workplace discount program.

(E) A sponsoring organization shall make application for group retro on a form provided by the bureau and shall complete the application in its entirety with all documentation attached as required by the bureau. If the sponsoring organization fails to include all pertinent information, the bureau will reject the application.

(1) The group retro application (U-151) shall be signed each year by an officer of the sponsoring organization.

(2) The sponsoring organization shall identify each individual employer in the retro group on an employer roster for group retro plan (U-152).

(F) For public employer taxing districts, applications for group retro coverage shall be filed with the bureau on or before the last Friday of September of the year immediately preceding the rating year. For private employers, applications for group retro coverage shall be filed with the bureau on or before the last Friday of April of the year of the July first beginning date for the rating year; except that for 2009 only, the application for group retro coverage shall be filed on or before July 31, 2009. A retro group’s application for group retrospective rating is applicable to only one policy year. The retro group must reapply each year for group retro coverage. Continuation of a plan for subsequent years is subject to timely filing of an application on a yearly basis and the meeting of eligibility requirements each year.

(G) Upon receipt of an application for retro group, the bureau shall do the following:

(1) Determine the industry classification of the retro group based upon the makeup of retro group employers submitted.

(2) Screen prospective retro group members to ensure that their business operations fit appropriately in the retro group’s industry classification.

(3) In reviewing the retro group’s application, if the bureau determines that individual employers in the retro group do not meet the eligibility requirements for group retrospective rating, the bureau will notify the individual employers and the retro group of this fact, and the retro group may continue in its application for group retro coverage without the disqualified employers.

(H) The group retro sponsor shall submit to the bureau an employer statement (U-153) each year for each employer that wishes to participate in group retrospective rating with the sponsor. Where an employer files a new employer statement form during an application period, it shall be presumed that the latest filed employer statement form of the employer indicates the employer’s intentions for group retro. An employer statement form shall remain effective until the end of the policy year as defined on the employer statement form.

(I) The bureau may request of individual employers or the retro group sponsor, additional information necessary for the bureau to rule upon the application for group retro coverage. Failure or refusal of the retro group sponsor to provide the requested information on the forms or computer formats provided by the bureau shall be sufficient grounds for the bureau to reject the application and refuse the retro group’s participation in group retrospective rating program.

(J) Individual employers who are not included on the final retro group roster or do not have an individual employer application (U-153) for the same retro group or another retro group sponsored by the same sponsoring organization on file by the application deadline, will not be considered for the group retro plan for that policy year; however, the bureau may waive this requirement for good cause shown due to clerical or administrative error, so long as no employer is added to a retro group after the application deadline. The group retro sponsor shall submit all information to the bureau by the application deadline.

(K) A sponsoring organization shall notify an employer that is participating in a retro group of that sponsoring organization if the employer will not be included in a retro group by that sponsoring organization for the next rating year. For private employer retro groups, the sponsoring organization shall notify the employer in writing prior to the first Monday in April of the year of the retro group application deadline. For public employer taxing district retro groups, the sponsoring organization shall notify the employer in writing prior to the second Friday of September of the year of the group retro application deadline. If an employer notifies the bureau that a sponsoring organization has not complied with this rule and the sponsoring organization fails to prove that the notice was provided in a timely manner, the bureau will, without the approval of the sponsoring organization, allow the employer to remain in the retro group for the rating year for which the notice was required. If that retro group no longer exists, the bureau will, without the approval of the sponsoring organization, place the employer in a homogeneous retro group with the same sponsoring organization or take other appropriate action.

(L) Once a retro group has applied for group retrospective rating, the organization may not voluntarily terminate the application. All changes to the original application must be filed on a bureau form provided for the application for the group retrospective rating plan and must be filed prior to the filing deadline. Any rescissions made must be completed in writing, signed by an officer of the sponsoring organization and filed prior to the filing deadline. The retro group may make no changes to the application after the last day for filing the application. Any changes received by the bureau after the filing deadline will not be honored. The latest application form or rescission received by the bureau prior to the filing deadline will be used in determining the premium obligation.

(M) After the group retro application deadline but before the end of the policy year for the retro group, the sponsoring organization may notify the bureau that it wishes to remove an employer from participation in the retro group. The sponsoring organization may request that the employer be removed from the retro group after the application deadline only for the employer’s gross misrepresentation on its application to the retro group.

(1) “Gross misrepresentation” is an act by the employer that would cause financial harm to the other members of the retro group. Gross misrepresentation is limited to any of the following:

(a) Where the sponsoring organization discovers that the employer applicant for group retro rating has recently merged with one or more entities, such that the merger adversely affects the employer’s risk of future losses and the employer did not disclose the merger on the employer’s application for membership in the retro group.

(b) Where the sponsoring organization discovers that the employer applicant for group retrospective rating has failed to disclose the true nature of the employer’s business pursuit on its application for membership in the retro group, and this failure adversely affects the loss potential of the retro group.

(2) Where the sponsoring organization requests that an employer be removed from the retro group, the burden of proof is on the sponsoring organization to provide documentation. The bureau shall review the request to remove the employer from the retro group, and the employer shall be removed from the retro group only upon the bureau’s consent.

(N) A retro group formed for the purpose of group retrospective rating may not voluntarily terminate a plan during the policy year. A change in the name of the retro group will not constitute a new retro group. A change of the organization sponsoring a retro group or moving a retro group to a new sponsoring organization shall constitute a new retro group and the members of the new retro group must meet the homogeneity requirement of paragraph (C)(2) of this rule. A retro group shall be considered a continuing retro group if more than fifty per cent of the members of the retro group in the previous rating year are members of the retro group in the current rating year.

(O) Selection of an authorized representative for the retro group shall meet the following requirements:

(1) A retro group that has been established and has been accepted by the bureau of workers’ compensation for the purpose of group retrospective rating shall have no more than one permanent authorized representative for representation of the retro group and the individual employers of the retro group before the bureau and the industrial commission in any and all risk-related matters pertaining to participation in the workers’ compensation fund.

(2) The selection of an authorized representative must be made by submission of a completed form U-151, and any change or termination of the authorized representative can be made only by a subsequent submission of form U-151. Only an officer of the sponsoring organization may sign a U-151.

(P) The bureau shall consider an employer individually when assessing the premium payments for the retro policy year. The retro group will be considered a single entity for purposes of calculating group retrospective premium adjustments.

(Q) The group retrospective premium calculation will occur at twelve, twenty-four, and thirty-six months following the end of the group retro policy year.

(1) On the evaluation date, the bureau will evaluate all claims with injury dates that fall within the retro policy year. The incurred losses and reserves that have been established for these claims are “captured” or “frozen.” The group’s retrospective premium will be calculated based on the developed incurred losses of the group. The group retrospective premium will be compared to the group standard premium (the combined standard premiums of retro group members for the retro policy year) and all subsequent group retro refunds/assessments. The difference will be distributed or billed to employers as a refund or assessment.

(a) These assessments will be limited per a maximum premium ratio selected during the group retro application process.

(b) Any reserving method that suppresses some portion of an employer’s costs for the purpose of calculating an experience modification will not apply in the calculation of incurred losses for group retrospective rating.

(c) The bureau may hold a portion of refunds or defer assessments owed in the first and second evaluation periods to minimize the volatility of refunds and assessments. Any net refund or assessment will be fully distributed or billed by the bureau in the third evaluation period.

(2) Incurred losses used in the retrospective premium will be limited to five hundred thousand dollars per claim.

(3) Incurred losses will not include surplus or VSSR costs.

(R) The retrospective premium calculation that will occur at various evaluation points after the retro policy year end will be as follows (please note that standard premium and developed incurred losses are for the total of the entire retro group):

Group retrospective premium =

(Basic premium factor x standard premium)

+

developed incurred losses

(1) A group will elect a maximum premium ratio for the group each year as part of the group retro application process. This ratio will determine the maximum amount of total premium a retro group may pay after refunds and assessments.

(2) Options for the maximum premium ratio will be as follows: 1.05, 1.10, 1.15, 1.20, 1.25, 1.50, 1.75, or 2.00.

(3) A basic premium factor is applied in the retro premium calculation to account for insurance costs, surplus costs, and a per claim cap. The basic premium factor is determined using the following factors: group size by standard premium and maximum premium ratio.

(4) Developed incurred losses are created by totaling incurred losses and reserves for the entire retro group and applying an actuarially determined loss development factor.

(5) Refunds and assessments will be distributed directly to group retro employers. The amount refunded or assessed to an individual employer will be based upon the percentage of the total group standard premium paid by the employer at the time of evaluation. The refund or assessment will be multiplied by this percentage and the resulting amount will be distributed or billed to the employer.

(6) Within four months of the evaluation date, if entitled, the bureau will send premium refunds.

(7) If additional premium is owed, it will be included in the employer’s next invoice and must be paid by the due date stated on the invoice. The bureau will charge penalties on any additional premium not paid when it is due. If the group retro member is entitled to a refund for one retro policy year and owes any additional monies to the bureau, the bureau will deduct the monies due the bureau from the refund. The bureau will refund the difference to the group retro member. In the event that this adjustment still leaves a premium balance due, the bureau will send a bill for the balance.

(S) Terminations, transfers, and change of ownership will be handled in regards to group retrospective as follows:

(1) Predecessor: enrolled in group retro program.

Successor: new entity.

Where there is a combination or experience transfer during the current policy year, wherein the predecessor was a participant in the group retro program, and the successor is assigned a new policy with the bureau, the successor may be considered a member of the group retro program if agreed to by both the succeeding employer and the group retro sponsor. Written agreement signed by both the succeeding employer and the group retro sponsor must be received by the bureau within thirty days of the date of succession. If the succeeding employer and the group sponsor agree to successor joining the retro group, the successor’s group retro evaluation shall be based on the group’s reported payroll and claims incurred. Notwithstanding this election, the successor shall be responsible for any and all existing or future rights and obligations stemming from the predecessor’s participation in the group retro program prior to the date that the bureau was notified of the transfer as prescribed under paragraph (C) of rule 4123-17-02 of the Administrative Code.

(2) Predecessor: not enrolled in group retro program.

Successor: enrolled in group retro program.

Where one legal entity that has established coverage and is enrolled in the group retro program, wholly succeeds one or more legal entities having established coverage and the predecessor entities are not enrolled in the group retro program at the date of succession, the payroll reported and claims incurred by the predecessor from the date of succession to the end of the policy year, shall be included in successor’s retrospective rating plan. If the predecessor had at any time participated in a group retro program, the successor shall be responsible for any and all existing or future rights and obligations stemming from the predecessor’s participation in the group retro program prior to the date that the bureau was notified of the transfer as prescribed under paragraph (C) of rule 4123-17-02 of the Administrative Code.

(3) Predecessor: enrolled in group retro program.

Successor: not enrolled in group retro program.

Where one legal entity that has established coverage and is not currently enrolled in a group retro plan wholly succeeds one or more entities that are enrolled in a group retro plan, predecessor’s plan(s) shall terminate as of the ending date of the evaluation period. Payroll reported and claims incurred on or after the date of succession will be the responsibility of the successor under its current rating plan. The successor shall be responsible for any and all existing or future rights and obligations stemming from the predecessor’s participation in the group retro program prior to the date that the bureau was notified of the transfer as prescribed under paragraph (C) of rule 4123-17-02 of the Administrative Code.

(4) Predecessor: enrolled in group retro program.

Successor: enrolled in different group retro program.

Where one legal entity that has established coverage and is enrolled in a group retro plan wholly succeeds one or more entities that are enrolled in a group retro plan, predecessor’s plan(s) shall terminate as of the ending date of the evaluation period. Payroll reported and claims incurred on or after the date of succession will be the responsibility of the successor under its group retro plan. The successor shall be responsible for any and all existing or future rights and obligations stemming from the predecessor’s participation in the group retro program prior to the date that the bureau was notified of the transfer as prescribed under paragraph (C) of rule 4123-17-02 of the Administrative Code.

(5) Predecessor: enrolled in group retro program.

Su