Chapter 4123-17 General Rating for the State Insurance Fund

4123-17-01 Annual rate revision, method of adoption, effective date, publication.

(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.

R.C. 119.032 review dates: 06/17/2013 and 06/17/2018
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, 10/16/08

4123-17-02 Basic or manual rate.

(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 first or July first, 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.

(6) Whenever one employer succeeds another employer in the operation of a business under paragraphs (B)(1) to (B)(5) of this rule, the bureau shall transfer the predecessor's experience under the workers' compensation law to the successor if one of the following criteria is met:

(a) The successor expressly or impliedly agrees to assume such obligations;

(b) The succession transaction amounts to a de facto consolidation or merger;

(c) The successor is merely a continuation of the predecessor; or.

(d) The succession transaction is entered into for the purpose of escaping obligations under the workers' compensation law.

If one or more of the criteria set forth in this paragraph is met, the bureau shall transfer the predecessor's experience under the workers' compensation law, regardless of whether the predecessor's transfer to the successor was voluntary or through an intermediary bank or receivership.

(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:

(a) The successor expressly or impliedly agrees to assume such obligations;

(b) The succession transaction amounts to a de facto consolidation or merger;

(c) The successor is merely a continuation of the predecessor; or

(d) The succession transaction is entered into for the purpose of escaping obligations under the workers' compensation law.

If one or more of the criteria set forth in this paragraph is met, the bureau shall transfer the predecessor's rights and obligations under the workers' compensation law, regardless of whether the predecessor's transfer to the successor was voluntary or through an intermediary bank or receivership.

(2) 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.

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

(4) The successor must preserve the predecessor's payroll records for the five years preceding the date of succession.

(5) 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.

Effective: 10/28/2010
R.C. 119.032 review dates: 07/01/2015
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, 7/5/10

4123-17-03 Employer's classification rates.

(A) Definitions.

As used in this rule:

(1) "Experience period" means the oldest four of the latest five calendar years immediately preceding the beginning of the payroll reporting period to which a rate is applicable.

(2) "Inactive employer" means 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) As of the last day of December for private employers, or the last day of June for public employers, the employer is not paying premiums or assessments to the Ohio state insurance fund under either its own identity, the identity of any successor entity, or as a self-insured entity; and

(c) The employer no longer employs employees for which Ohio workers' compensation jurisdiction applies.

(3) "Significant negative impact" occurs when:

(a) Inactive employers reported forty per cent or more of the payroll in a manual classification in any calendar year in the experience period, and

(b) The aggregate loss rate and loss/premium ratio of inactive employers in the manual classification are significantly higher than the aggregate loss rate and loss/premium ratio of the active employers taken as a whole as measured using the data from the prior policy year's most current four years data.

(B) 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 inactive employer 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. The bureau shall exclude the data of that inactive employer from all future manual classification rate calculations.

(2) The calculation of the base rate and the experience rate shall be applied to all employers reporting payroll in the manual classification.

(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.

(C) An experience-rated employer's manual classification rate modification shall be determined by multiplying its experience modification (EM) as defined in paragraph (D) of this rule times the basic manual rate for each assigned manual classification. The amount of the modification shall then be applied to the respective basic rate to obtain the employer's premium rate for each classification.

(D) The experience modification (EM) shall be applied to the basic rate. The experience modification is determined in accordance with the following formula:

image: oh/admin/2014/4123-17-03_ff_n_ru_20130605_0830-1.jpg

TML = Actual losses of the employer for the experience period, limited in accordance with paragraph (E)(1) of this rule.

TLL = Total limited losses = TEL multiplied by LLR

TEL = Total expected losses, determined by applying expected loss rate to the payroll of each classification in the employer's experience period, as provided in the appendix to rule 4123-17-05.1 of the Administrative Code for private employers and in the appendix to 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, calculated for each credibility group within each industry group, as provided in appendix B to rule 4123-17-05 of the Administrative Code for private employers and appendix B to rule 4123-17-33 of the Administrative Code for public employer taxing districts.

C = Credibility given to an employer's own experience, determined by the employer's total expected losses, as provided in the appendix to rule 4123-17-05.1 of the Administrative Code for private employers and in the appendix to rule 4123-17-33.1 of the Administrative Code for public employer taxing districts.

EM = Adjustment applied to the basic rate.

(E) Experience modification (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 the appendix to rule 4123-17-05.1 of the Administrative Code for private employers and the appendix to rule 4123-17-33.1 of the Administrative Code for public employer taxing districts according to the total expected losses of an employer; and

(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 the appendix to rule 4123-17-05.1 of the Administrative Code for private employers and the appendix to rule 4123-17-33.1 of the Administrative Code for public employer taxing districts.

(3) The year-over-year increase in an employer's EM may be limited to one hundred per cent pursuant to rule 4123-17-03.2 of the Administrative Code.

Replaces: 4123-17-03

Effective: 07/01/2013
Promulgated Under: 111.15
Statutory Authority: 4121.12 , 4121.121 , 4121.13
Rule Amplifies: 4121.12 , 4121.121 , 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, 5/21/09, 1/1/10, 3/22/10, 7/1/12

4123-17-03.1 [Rescinded]Experience modification for out of state employer.

Effective: 09/23/2013
R.C. 119.032 review dates: 06/14/2013
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

4123-17-03.2 Experience modification cap.

(A) Definitions.

As used in this rule:

(1) "Eligibility determination date" means the June first immediately preceding the policy year for which the EM is being calculated for private employers, and the December first immediately preceding the policy year for which the EM is being calculated for public employer taxing districts.

(2) "Experience modification" or "EM" means the experience modification as determined under rule 4123-17-03 of the Administrative Code.

(3) "Safety requirement completion date" means the last business day of March for private employers and the last business day of September for public employer taxing districts.

(B) Except as provided for in paragraph (D) of this rule, commencing with the rating year beginning July 1, 2009 for private employers and January 1, 2010 for public employer taxing districts, the bureau shall limit the increase in EM of an employer meeting the eligibility requirements of this rule to one hundred per cent of the EM published for that employer in the preceding rating year.

(C) Eligibility requirements.

(1) As of the eligibility determination date, the employer:

(a) Must be current with respect to all payments due the bureau, as defined in paragraph (A)(3) of rule 4123-17-14 of the Administrative Code.

(b) Cannot have cumulative lapses in workers' compensation coverage in excess of forty days within the preceding twelve months .

(2) An employer must annually complete a safety program prescribed by the division of safety and hygiene no later than safety requirement completion date during each policy year in which the cap applies. 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 and use employer's uncapped EM for that policy year.

(D) Opt-out provision.

The bureau will automatically apply the cap to an employer that meets the eligibility requirements of paragraphs (C)(1)(a) and (C)(1)(b) of this rule. If an employer wishes to not have the cap applied, the employer must notify the bureau in writing by the last business day in September of the policy year for private employers and the last business day in March of the policy year for public employer taxing districts.

(E) Application of cap to successor policies.

Where a transfer of experience occurs when one employer succeeds another employer in the operation of a business in whole or in part, the resulting EM is not subject to limitation under this rule unless one of the following apply:

(1) The transfer is a combination as a result of bankruptcy proceedings, when the transaction is a change in policy number without any change in exposure; or

(2) A base-rated successor wholly or partially succeeds a single policy.

If either of these conditions are met, the predecessor's published EM in the preceding rating year will be deemed the EM published for the successor in the preceding rating year for purposes of determining whether the cap applies under this rule.

Effective: 07/01/2014
Promulgated Under: 111.15
Statutory Authority: 4121.12 , 4121.121 , 4121.13
Rule Amplifies: 4121.12 , 4121.121 , 4123.29 , 4123.34
Prior Effective Dates: 7/1/13

4123-17-04 Classification of occupations or industries.

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, 2012, as indicated in appendix A to this rule, 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.

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Effective: 07/12/2012
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, 7/1/08, 7/1/10, 7/1/11

4123-17-05 Private employer industry group and limited loss ratio tables.

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 industry group and limited loss ration tables parts A and B, to be effective July 1, 2014, applicable to the payroll reporting period July 1, 2014, through June 30, 2015, for private employers as indicated in the attached appendixes A and B to this rule.

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Effective: 07/01/2014
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, 7/1/09, 7/1/10, 7/1/11, 8/25/11, 7/1/12, 7/1/13

4123-17-05.1 Private employer credibility table.

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, 2013, for private employers as indicated in appendix A to this rule.

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Effective: 07/01/2013
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, 7/1/09, 7/1/10, 7/1/11, 7/1/12

4123-17-06 Private employer contributions to the state insurance fund.

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 of payroll to be effective July 1, 2014, applicable to the payroll reporting period July 1, 2014, through June 30, 2015, for private employers as indicated in the appendix to this rule.

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Effective: 07/01/2014
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, 7/1/09, 7/1/10, 8/9/10, 7/1/11, 7/1/12, 7/1/13

4123-17-07 Officers of corporations, elective coverage entities, and ministers.

(A) Definitions.

As used in this rule:

(1) "Church" means an established and legally cognizable church, congregation, denomination, society, corporation, fellowship, convention, or association that is formed primarily or exclusively for religious purposes.

(2) "Elective coverage persons" means a sole proprietor, a member of a partnership, a member of a limited partnership, an individual incorporated as a corporation with no employees, or an officer of a family farm corporation.

(3) "Elective coverage entity" means a sole proprietorship, a partnership, a limited partnership, an individual incorporated as a corporation with no employees, or a family farm corporation.

(4) "Family farm corporation" has the same meaning as defined in division (E) of section 4123.01 of the Revised Code.

(5) "Minister" means a duly ordained, commissioned, accredited, or licensed minister, member of the clergy, rabbi, priest, or Christian science practitioner.

(B) 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 the weekly minimum and maximum 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. 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 (C) of this rule shall be applicable.

(C) Elective coverage entities.

(1) Remuneration of elective coverage persons shall not be reported as part of the payroll of an elective coverage entity, unless that entity elects to include any such person as an employee.

(2) Upon the filing of the notice required under paragraph (E) of this rule, the actual remuneration of an elective coverage person shall be reported and included in the payroll report of the employer subject to the weekly minimum and maximum provided in rule 4123-17-30 of the Administrative Code. Such remuneration shall be assigned to the classification applicable to the duties performed.

(D) Ministers.

(1) Division (A)(2)(a) of section 4123.01 of the Revised Code excludes from coverage ministers, assistant ministers, or associate ministers 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 such persons as an employee.

(2) Upon the filing of the notice required under paragraph (E) of this rule, the actual remuneration of a minister, assistant minister, or associate minister shall be reported and included in the payroll report of the employer. Such remuneration shall be assigned to the classification applicable to the duties performed.

(E) If an employer elects to include an elective coverage person or minister, assistant minister, or associate minister as an employee under paragraph (C) or (D) of this rule, the employer shall serve written notice to the bureau on a form prescribed by the bureau. After proper election and notice, elective coverage persons or ministers, assistant ministers, or associate ministers 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.

(1) Coverage for such persons shall not be effective until notice has been filed with the bureau.

(2) 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 employer requesting termination of coverage for the elective coverage persons or ministers, assistant ministers, or associate ministers, or until terminated by the bureau pursuant to paragraph (E)(3) of this rule.

(3) An employer's failure to pay premiums timely shall terminate coverage for its elective coverage persons or ministers, assistant ministers, or associate ministers. In the event of termination of coverage for non-payment of premium, an employer may reinstate elective coverage only upon the filing of a subsequent election form. Reinstatement of coverage shall be effective only upon receipt of the executed form and payment of premium. No retroactive coverage may be granted except as provided in rule 4123-14-03 of the Administrative Code.

Replaces: 4123-17-07

Effective: 09/23/2013
R.C. 119.032 review dates: 07/01/2018
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

4123-17-08 Classifications according to national council on compensation insurance.

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 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) of this rule.

(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.

(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.

(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 7600 (Telecommunications Co. - cable TV/Satellite - all employees and 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).

(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)(i) 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)(i) 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 laboratories or assaying - including laboratory, outside employees, collectors of samples, and drivers); 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.

Effective: 07/12/2012
Promulgated Under: 111.15
Statutory Authority: 4121.12 , 4121.121
Rule Amplifies: 4123.29
Prior Effective Dates: 7/27/96; 7/1/97; 7/1/98; 7/1/00; 7/1/02; 7/1/03

4123-17-09 Clerical office payroll.

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.

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

4123-17-10 Excess premiums.

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.

R.C. 119.032 review dates: 06/17/2013 and 06/17/2018
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, 10/16/08

4123-17-11 Rule of merit rating controlling the employee having but one eye, one hand, etc.

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.

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

4123-17-12 Catastrophe claims.

(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.

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

4123-17-13 Rule controlling the making of the initial application for rating.

(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 4123-17-16iftheAdministrativeCode. 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

4123-17-14 Rule controlling the completing of payroll reports.

(A) In July and January of each year, the bureau will furnish private state fund employers with 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) ofthis 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.

(3) The term "current" as used in the rules of this chapter of the Administrative Code with respect to payments due the bureau means not more than forty-five days past due. "Payments due the bureau" means any 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, for which the employer has not submitted a dispute of the obligation to the bureau's adjudicating committee by a written letter containing the detailed reasons for the objection and supporting documentation.

(B) For all counties and public employer taxing districts, in January 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 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 department of job and family services, in order that the payroll reporting requirements of the bureau shall be coordinated with the remuneration reporting requirements of the Ohio department of job and family 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 department of job and family services under Chapter 4141. of the Revised Code or whether the employer reports payroll or remuneration to the Ohio department of job and family services for such persons considered to be employees by the bureau .

(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 ofthe identity ofthe 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: 09/23/2013
R.C. 119.032 review dates: 06/14/2013 and 07/01/2018
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, 3/23/09, 7/1/12

4123-17-14.1 Misrepresentation of payroll.

(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 that the administrator or the administrator's designee deems appropriate upon the employer based on the following criteria:

(1) Amount of difference between the premium the employer paid and the amount the employer should have paid;

(2) The frequency with which the employer has misrepresented its payroll or classification of payroll to the bureau;

(3) The number of misrepresentations or misclassifications the employer has made to the bureau;

(4) The duration for which the employer made such misrepresentations or misclassifications;

(5) Whether the bureau has found misclassified or underreported payroll in a premium audit on prior occasion; and

(6) Any additional circumstances that warrant consideration in determining the penalty amount.

The penalty imposed under this section shall not exceed 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 ofthe 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.

Effective: 09/23/2013
R.C. 119.032 review dates: 06/14/2013 and 07/01/2018
Promulgated Under: 119.03
Statutory Authority: 4121.12, 4121.121
Rule Amplifies: 4123.25
Prior Effective Dates: 10/14/02

4123-17-14.2 Bureau 50/50 program.

(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, bwc.ohio.gov, 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, bwc.ohio.gov, using the accounts receivable balance service offering. The balance shall be paid by the first day of May 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: 08/10/2014
Promulgated Under: 111.15
Statutory Authority: 4121.12 , 4121.121 , 4121.30
Rule Amplifies: 4123.29 , 4123.34
Prior Effective Dates: 7/1/06, 1/5/09

4123-17-14.3 Go green discount.

(A) The administrator may offer a discount to employers electing to use the bureau's website, http://www.ohiobwc.com, to conduct their business with the bureau.

(B) Online transactions.

(1) To receive the go green discount, an employer must engage in each of the following transactions using http://www.ohiobwc.com, as determined by the bureau:

(a) Receive payroll reports,

(b) Report payroll,

(c) Pay premiums for the current period no later than their due date, and

(d) File first reports of injury.

(2) If the bureau expands online account management and communications capabilities through its website, employers who participate in the go green discount program will be required, within a reasonable amount of time, to engage in any additional transactions offered by the bureau online to continue receiving the go green discount.

(3) The bureau shall maintain a list of transactions that must be completed through its website for an employer to receive the discount provide in this rule on http://www.ohiobwc.com.

(C) Eligibility requirements.

(1) To receive the go green discount under this rule, the employer must meet the following criteria:

(a) The employer must be current with respect to all payments due the bureau, as defined in paragraph (A)(3) of rule 4123-17-14 of the Administrative Code.

(b) 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 must not have cumulative lapses in workers' compensation coverage in excess of forty days within the prior twelve months.

(2) The following employers shall not be eligible for the go green discount:

(a) Employers paying the minimum administrative charge for the applicable payroll reporting period as set forth in rule 4123-17-26 of the Administrative Code.

(b) Employers participating in the early payment discount program set forth in rule 4123-17-18.1 of the Administrative Code.

(c) Employers participating in the fifty-fifty program set forth in rule 4123-17-14.2 of the Administrative Code.

(d) State agencies.

(e) Self-insuring employers providing compensation and benefits pursuant to section 4123.35 of the Revised Code.

(D) The discount shall be the

amount identified in the appendix to rule 4123-17-75 of the Administrative Code times the employer's blended premium costs in the applicable payroll period subject to any limits set forth in such appendix.

Effective: 01/01/2013
Promulgated Under: 111.15
Statutory Authority: 4121.12 , 4121.121 , 4123.13
Rule Amplifies: 4121.12 , 4121.121 , 4123.29 , 4123.34
Prior Effective Dates: 7/1/12

4123-17-14.4 Lapse-free discount.

(A) The administrator may offer a discount to employers that do not have a lapse in coverage for a period of sixty consecutive months.

(B) For purposes of this rule, "discount eligibility evaluation date" means:

(1) For the first payroll period in any private employer policy year, the December first of that payroll period,

(2) For the second payroll period in any private employer policy year, the June first of that payroll period,

(3) For the public employer policy year, the December first in that policy year.

(C) Eligibility requirements.

(1) To receive the lapse-free discount, an employer must be in active status and, as of the discount eligibility evaluation date, not have had any lapse in coverage during the sixty months preceding the discount eligibility evaluation date.

(2) The following employers shall not be eligible for the lapse-free discount:

(a) Employers paying the minimum administrative charge for the applicable payroll reporting period as set forth in rule 4123-17-26 of the Administrative Code.

(b) State agencies.

(c) Self-insuring employers providing compensation and benefits pursuant to section 4123.35 of the Revised Code.

(D) The discount shall be the

amount identified in the appendix to rule 4123-17-75 of the Administrative Code times the employer's blended premium costs in the applicable payroll period, subject to any limits set forth in such appendix.

Effective: 01/01/2013
Promulgated Under: 111.15
Statutory Authority: 4121.12 , 4121.121 , 4121.13
Rule Amplifies: 4121.12 , 4121.121 , 4123.29 , 4123.34
Prior Effective Dates: 7/1/12

4123-17-15 Professional employer organizations.

(A) Definitions.

As used in rules 4123-17-15 to 4123-17-15.7 of the Administrative Code:

(1) "Professional employer organization" or "PEO" has the same meaning as defined in section 4125.01 of the Revised Code. Requirements for PEOs that coemploy a part of a client employer's workforce are set forth in paragraph (C) of this rule. "Professional employer organization" or "PEO" does not include a service agency that is in the business of employing individuals for the purpose of utilizing the services of the individuals for a temporary period of time.

(2) "Client employer" has the same meaning as defined in section 4125.01 of the Revised Code. "Client employer" does not mean an employer who is a noncomplying employer as defined in rule 4123-14-01 of the Administrative Code.

(3) "PEO agreement" means a professional employer organization agreement as defined in section 4125.01 of the Revised Code.

(4) "PEO reporting entity" means a professional employer organization reporting entity as defined in section 4125.01 of the Revised Code.

(5) "Assurance organization," "coemploy," "shared employee," "trade secret," and "working capital" have the same meaning as defined in section 4125.01 of the Revised Code.

(B) Where a PEO is required to give notice, register, or make a report to the bureau under rules 4123-17-15 to 4123-17-15.7 of the Administrative Code, the PEO shall do so on forms prescribed by the bureau. Forms must be completed in full, as determined by the bureau, for such notice, registration, or report to be effective.

(C) Partial leases.

(1) A PEO may enter into a PEO agreement to coemploy part of a client employer's workforce for workers' compensation purposes only to the extent wages are paid by and reported under the tax identification number of the PEO for federal tax purposes.

(2) Under such partial lease agreement, the PEO shall report under its workers' compensation risk number the payroll associated with the wages paid by and reported by the PEO for federal tax purposes under the PEO's tax identification number. The client employer shall report under its workers' compensation risk number all payroll associated with wages not paid by and not reported under the PEO's tax identification number.

(3) All of a client employer's payroll within a manual classification must be reported in its entirety under either the workers' compensation risk number of the PEO or client employer; such payroll may not be split between the PEO and client employer.

(D) Obligations of a PEO.

A PEO must perform all of 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) Pay wages and payroll taxes associated with shared employees as established within the PEO agreement. The responsibility for making payments under this section is not contingent on receipt of payment from the client employer. Shared employee wages must be paid by and reported under the tax identification number of the PEO for federal tax purposes.

(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. Payroll shall be kept in a manner that clearly identifies the appropriate manual classifications assigned to each client employer, the payroll reported in each manual classification, and the amount of premiums paid for each client employer for each payroll period covered in the PEO agreement. Claims shall be separately identified according to the client employer.

(6) Report individual client employer payroll, claims, and classification data under a separate and unique subaccount to the bureau.

(7) 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 ministers or elective coverage persons as those terms are defined in 4123-17-07 of the Administrative Code, payroll reports shall include the entire amount of payroll associated with those persons and shall not be subject to the weekly minimum and maximum provided in rule 4123-17-30 of the Administrative Code. The PEO must maintain workers' compensation coverage under its workers' compensation risk number for all payroll reported under its tax identification number for federal tax purposes.

(8) Within fourteen days after receiving notice from the bureau 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

Replaces: 4123-17-15

Effective: 02/17/2014
R.C. 119.032 review dates: 02/01/2019
Promulgated Under: 119.03
Statutory Authority: 4121.12 , 4121.121 , 4121.30 , 4123.05 , 4125.02
Rule Amplifies: 4123.34 , 4125.01 , 4125.02 , 4125.03
Prior Effective Dates: 7/1/97; 11/22/04

4123-17-15.1 PEO agreements.

(A) 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 purposes of workers' compensation experience, and shall be subject to rule 4123-17-02 of the Administrative Code.

(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. The PEO shall identify on forms prescribed by the bureau the portion of the experience of the PEO related to the client employer that shall be transferred to the client employer.

(4) A PEO shall report any transfer of employees between related PEO entities or PEO reporting entities to the bureau within fourteen calendar days after the date of the transfer. The PEO or PEO reporting entity shall include in the report all client payroll and claim information regarding the transferred employees and a notice of all workers' compensation claims that have been reported to the PEO or PEO reporting entity in accordance with the internal reporting policies of the PEO or PEO reporting entity.

(B) A PEO shall notify the bureau within thirty days when entering into or changing the type of PEO agreement. For payroll reported under the PEO's policy, the PEO must list payroll within the existing manual classifications of the client employer. If the bureau is not notified within thirty days, the bureau will recognize the PEO agreement on the date the bureau receives notice 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.

(C) A PEO which enters into a PEO agreement with a noncomplying employer or a PEO which fails to comply with rules 4123-17-15 to 4123-17-15.7 of the Administrative Code 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.

(D) 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 do not have sufficient contacts with Ohio to meet the jurisdictional requirements for coverage.

Effective: 02/17/2014
R.C. 119.032 review dates: 02/01/2019
Promulgated Under: 119.03
Statutory Authority: 4121.12 , 4121.121 , 4121.30 , 4123.05 , 4123.291 , 4125.02
Rule Amplifies: 4123.34 , 4123.54 , 4125.03 , 4125.04 , 4125.05 , 4125.07

4123-17-15.2 Registration and reporting requirements.

(A) The PEO shall register with the bureau not later than thirty days after the formation of the PEO. A PEO operating in this state shall register annually with the administrator.

(1) The PEO shall submit an initial registration fee as set forth in the appendix to this rule with its initial application. The PEO shall submit an annual renewal fee as set forth in the appendix to this rule to the bureau on or prior to December thirty-first of each year.

(2) The PEO shall submit the following information when registering with the bureau:

(a) A list of each of the PEO'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 PEO conducts business;

(c) The address of the PEO's principal place of business and the address of each office it maintains in this state;

(d) The PEO's taxpayer or employer identification number;

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

(f) A list of all corporate officers of the PEO;

(g) A list of all related corporate entities;

(h) The most recent financial statement prepared and audited in accordance with rule 4123-17-15.4 of the Administrative Code. Such financial statement must be no older than thirteen months at the time it is submitted to the bureau;

(i) An attestation of the accuracy of the data submissions from the chief executive officer of the PEO; and

(j) Security as required under rule 4123-17-15.3 of the Administrative Code.

(B) No later than June thirtieth and December thirty-first of each year, the PEO shall provide a semi-annual report of its client employers and total workforce to the bureau.

(C) A PEO reporting entity that will complete the financial reporting requirements of this chapter for commonly owned or controlled PEOs must register with the bureau and pay an initial registration fee as set forth in the appendix to this rule.

(1) The PEO reporting entity shall submit the following information when registering with the bureau:

(a) A list of each of the PEOs for which the PEO reporting entity will complete financial reporting requirements;

(b) The name or names under which the PEO reporting entity conducts business;

(c) The address of the PEO reporting entity's principal place of business and the address of each office it maintains in this state;

(d) The PEO reporting entity's taxpayer or employer identification number;

(e) A list of all corporate officers of the PEO reporting entity;

(f) The most recent financial statement prepared and audited in accordance with rule 4123-17-15.4 of the Administrative Code. Such financial statement must be no older than thirteen months at the time it is submitted to the bureau;

(g) Security as required under rule 4123-17-15.3 of the Administrative Code; and

(h) An attestation of the accuracy of the data submissions from the chief executive officer of the PEO reporting entity.

(2) The PEO reporting entity must renew such registration and pay an annual renewal fee as set forth in the appendix to this rule no later than December thirty-first of each year.

(D) The administrator may grant limited registration to a PEO for reasons specified by the administrator in the certificate of limited registration if the PEO provides all of the following items:

(1) A properly executed request for limited registration on a form prescribed by the bureau;

(2) A limited registration fee as set forth in the appendix to this rule;

(3) All information required for registration in paragraphs (A)(2)(a) to (A)(2)(i) of this rule; and

(4) Information and documentation necessary to show that the PEO satisfies all of the following criteria:

(a) The PEO is domiciled outside of Ohio and does not maintain an office in the state;

(b) The PEO is licensed or registered as a PEO in another state;

(c) The PEO does not participate in direct solicitations for client employers located or domiciled in Ohio; and

(d) The PEO has fifty or fewer shared employees employed or domiciled in Ohio on any given day. For purposes of this paragraph, a PEO is not domiciled outside of Ohio if a commonly owned or otherwise related corporate entity is domiciled in Ohio or maintains an office in the state.

(5) The administrator may require security of the limited registration PEO pursuant to rule 4123-17-15.3 of the Administrative Code.

(E) The bureau shall maintain a list of PEOs and PEO reporting entities registered under this rule that is readily available to the public.

(F) 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 or PEO reporting entity under this rule are confidential and shall be considered trade secrets and shall not be published or open to public inspection.

Click to view Appendix

Effective: 02/17/2014
R.C. 119.032 review dates: 02/01/2019
Promulgated Under: 119.03
Statutory Authority: 4121.12 , 4121.121 , 4121.30 , 4123.05 , 4125.02
Rule Amplifies: 4125.05

4123-17-15.3 Security requirements.

(A) Except as permitted in paragraphs (B) and (C) of this rule, a PEO shall provide security in the form of a bond or irrevocable 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 at least annually. The bureau may, in its discretion, reevaluate the amount of security required for a PEO policy within ninety days of receiving notice required under paragraph (B) of rule 4123-17-15.1 of the Administrative Code that the PEO has entered into a new PEO agreement or changed an existing PEO agreement.

(2) The security shall be provided to the bureau annually on or prior to December thirty-first.

(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.

(B) As an alternative to providing security in the form of a bond or irrevocable letter of credit, the administrator shall permit a PEO to make advance payments of premiums and assessments.

(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 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 (B)(1) of this rule shall provide to the bureau security in the form of a bond or irrevocable 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 irrevocable letter of credit.

(C) As an alternative to requiring security in the form of a bond or irrevocable letter of credit, the administrator shall accept the certification of a PEO by an assurance organization approved by the administrator to make such certification.

(1) An assurance organization desiring to be approved by the administrator to certify PEOs under this rule shall:

(a) Submit a written request for approval to the administrator in conjunction with an initial registration fee as set forth in the appendix to rule 4123-17-15.2 of the Administrative Code. Such written request must include:

(i) Evidence that the assurance organization has documented qualifications, standards, and procedures used to certify PEOs;

(ii) A description of the assurance organization's compliance monitoring services; and

(iii) Evidence that the assurance organization is licensed by one or more states to certify the qualifications of a PEO or PEO reporting entities.

(b) Apply for renewal of approval on an annual basis, and submit an annual renewal fee as set forth in the appendix to rule 4123-17-15.2 of the Administrative Code

(2) Upon the administrator's approval of an assurance organization, the assurance organization and the bureau shall enter into a memorandum of understanding.

(a) The memorandum of understanding shall set forth, at a minimum:

(i) The policies and procedures with which the assurance organization will comply in certifying a PEO to the bureau; and

(ii) The circumstances under which the assurance organization shall provide notice of change in the financial circumstances of a PEO it has certified under this rule.

(b) Failure to comply with such memorandum of understanding may result in immediate revocation of the administrator's approval of the assurance organization.

(3) The administrator's approval of an assurance organization is not transferable to successor corporate entities.

(4) Upon the bureau's request, an assurance organization must provide to the bureau all information requested regarding a PEO it has certified that has failed to pay its workers compensation premium and assessments, audit findings, or other moneys due and owing the bureau within thirty days of the due date. Failure to provide such information within thirty days of the request will result in the administrator's revocation of approval for the assurance organization to make certification under this rule.

(5) If the administrator revokes the approval of an assurance organization to make certification under this rule, any PEO certified by that assurance organization shall have sixty days to provide evidence of certification by another assurance organization, submit security under paragraph (A) of this rule, or make advance payments as set forth in paragraph (B) of this rule.

Replaces: Parts of 4123-17-15

Effective: 02/17/2014
R.C. 119.032 review dates: 02/01/2019
Promulgated Under: 119.03
Statutory Authority: 4121.12 , 4121.121 , 4121.30 , 4123.05 , 4125.02 , 4125.05
Rule Amplifies: 4123.01 , 4123.29 , 4123.32 , 4123.34 , 4125.02 , 4125.04
Prior Effective Dates: 7/1/97; 11/22/04

4123-17-15.4 Financial requirements.

(A) A PEO shall prepare financial statements in accordance with generally accepted accounting principles and submit them electronically for registration and registration renewal pursuant to section 4125.05 of the Revised Code.

(1) The financial statements shall be audited by an independent certified public accountant authorized to practice in the jurisdiction in which that accountant is located.

(a) The resulting report of the auditor shall not include either of the following:

(i) A qualification or disclaimer of opinion as to adherence to generally accepted accounting principles;

(ii) A statement expressing substantial doubt about the ability of the PEO or PEO reporting entity to continue as a going concern.

(b) If a PEO does not have at least twelve months of operating history on which to base financial statements, the financial statements shall be reviewed by a certified public accountant.

(2) A PEO reporting entity may submit a combined or consolidated financial statement for its member PEOs to satisfy the requirements of this paragraph. If the combined or consolidated financial statement includes entities that are not PEOs or that are not in the PEO reporting entity, the controlling entity of the PEO reporting entity that is submitting the consolidated or combined financial statement shall guarantee that the PEOs of the PEO reporting entity have satisfied the requirements under paragraph (B) of this rule and shall include supplemental combining schedules to guarantee that the requirements under paragraph (B) of this rule are satisfied by the PEO or PEO reporting entity.

(B) A PEO or PEO reporting entity shall maintain positive working capital at initial or annual registration, as reflected in the financial statements submitted to the bureau under paragraph (A)(2)(h) of rule 4123-17-15.2 of the Administrative Code. If a deficit in working capital is reflected in the financial statements submitted to the bureau, the PEO or the PEO reporting entity shall:

(1) Submit to the bureau a quarterly financial statement for each calendar quarter during which there is a deficit in working capital, accompanied by an attestation of the chief executive officer of the PEO that all wages, taxes, workers' compensation premiums, and employee benefits have been paid by the PEO or members of the PEO reporting entity.

(2) Obtain a bond, irrevocable letter of credit, or securities with a minimum market value in an amount sufficient to cover the deficit in working capital. Such security shall be required in addition to the requirements of rule 4123-17-15.3 of the Administrative Code, and shall be held by a depository designated by the administrator to secure payment by the PEO or PEO reporting entity of all taxes, wages, benefits, or other entitlements due or otherwise pertaining to shared employees, if the PEO or PEO reporting entity does not make those payments when due.

Replaces: Part of 4123-17-15

Effective: 02/17/2014
R.C. 119.032 review dates: 02/01/2019
Promulgated Under: 119.03
Statutory Authority: 4121.12 , 4121.121 , 4121.30 , 4123.05 , 4125.02
Rule Amplifies: 4125.05 , 4125.051
Prior Effective Dates: 7/1/97; 11/22/04

4123-17-15.5 Self-insuring PEOs.

(A) A PEO registered with the bureau under rule 4123-17-15.2 of the Administrative Code may apply to pay compensation directly as a self-insuring risk.

(1) The PEO must meet all eligibility requirements set forth in section 4123.35 of the Revised Code.

(a) The PEO shall provide five years of financial records as set forth in division (B)(1)(e) of section 4123.35 of the Revised Code. The administrator shall not waive this requirement.

(b) Shared employees will be considered employees of the PEO for the purposes of meeting the requirements of division (B)(1)(a) of section 4123.35 of the Revised Code only if both of the following criteria are met:

(i) The PEO demonstrates to the bureau that it is in compliance with all of the following:

(a) The duties of organization regarding shared employees set forth in section 4125.03 of the Revised Code, as amplified by paragraph (C) of rule 4123-17-15 of the Administrative Code;

(b) The requirements of section 4125.05 of the Revised Code, as amplified by rules 4123-17-15.2 and 4123-17- 15.3 of the Administrative Code; and

(c)The requirements of section 4125.07 of the Revised Code, as amplified by paragraphs (A)(3) and (A)(4) of rule 4123-17-15.1 of the Administrative Code.

(ii) All of the client employer's wages shall be paid and reported under the tax identification number of the PEO for federal tax reporting purposes.

(2) Any PEO application for self-insured status will be referred to the self-insured review panel pursuant to paragraph (F)(1) of rule 4123-19-14 of the Administrative Code.

(3) Any application to add a PEO to an existing self-insured entity will be referred to the self-insured review panel pursuant to paragraph (F)(1) of rule 4123-19-14 of the Administrative Code.

(B) A PEO granted the privilege of self-insured status must do all of the following:

(1) Furnish security as provided by paragraphs (F), (G), and (H) of rule 4123-19-03 of the Administrative Code.

(a) The security required by the bureau will be no less than one hundred percent of the outstanding claim liabilities associated with the self-insured policy, as determined by the bureau.

(b) The PEO is not permitted to use an assurance organization to meet its security requirements under this rule.

(c) The bureau may, pursuant to paragraph (M) of rule 4123-19-03 of the Administrative Code, require the PEO to furnish additional security within thirty days of receiving the notice required under paragraph (B) of rule 4123-17-15.1 of the Administrative Code.

(2) Submit to the bureau every two years, or upon the bureau's request, an actuarial estimate of the PEO's unpaid loss and loss adjustment expense liabilities performed by an independent actuary with a fellow of the society of actuaries or casualty actuary society credential.

(3) Make contribution to the self-insuring employers' guaranty fund as set forth in rule 4123-19-15 of the Administrative Code. For purposes of this rule, the premium as reported on the total of the last two full six-month semi-annual payroll reports shall include the premium of the PEO and all its client employers.

(4) Pay all assessments levied upon self-insuring employers under rule 4123-17-32 of the Administrative Code.

(5) Reimburse the bureau for disabled workers' relief fund payments on claims for which the PEO or its client employers are employer of record, pursuant to paragraph (B) of rule 4123-17-29 of the Administrative Code.

(6) Make a quarterly report to the bureau that details the PEO's active clients, all claims, and the claim reserves for each claim.

(C) For purposes of this rule, "paid compensation" means all amounts paid by the PEO and its client employers 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 PEO or its client employers, and all amounts paid by a PEO and its client employers 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 the PEO or its client employers 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 PEO or its client employers 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.

(1) For a PEO that is a self-insured risk for which paragraph (I) of rule 4123-17-32 of the Administrative Code is applicable, paid compensation includes any amounts paid by the state insurance fund for claims directly attributable to the PEO and any client employers of the PEO. In determining the applicability of paragraph (I) of rule 4123-17-32 of the Administrative Code to a PEO, the bureau shall use the date on which the PEO was added to the self-insured risk policy if such date is after the effective date of the self-insured risk policy.

(2) If a client employer enters into a new PEO agreement with a PEO that is a self-insured risk for which paragraph (I) of rule 4123-17-32 of the Administrative Code is applicable, paid compensation shall include any amounts paid by the state insurance fund for claims directly attributable to that client employer.

(D) A PEO granted the privilege of self-insured status shall not:

(1) Enter into PEO agreements to provide workers' compensation coverage through the state insurance fund.

(2) Enter into a partial-lease agreement.

Replaces: Part of 4123-17-15

Effective: 02/17/2014
R.C. 119.032 review dates: 02/01/2019
Promulgated Under: 119.03
Statutory Authority: 4121.12 , 4121.121 , 4121.30 , 4123.05 , 4123.35 , 4125.02 , 4125.05
Rule Amplifies: 4123.35 , 4125.05
Prior Effective Dates: 7/1/97; 11/22/04

4123-17-15.6 Client employer information.

(A) A PEO with whom a shared employee is coemployed shall provide a list of all of the following information to the client employer upon the written request of the client employer:

(1) All premiums and payroll associated with that client employer;

(2) All workers' compensation claims, and the compensation and benefits paid, and reserves established for each claim; and

(3) Any other information available to the PEO from the bureau regarding that client employer.

(B) The PEO shall provide the information required under paragraph (A) of this rule in writing to the requesting client employer within forty-five days after receiving a written request from the client employer. A PEO has provided the required information to the client employer when:

(1) The information is received by the United States postal service; or

(2) When the information is personally delivered, in writing, directly to the client employer. For purposes of this rule, a communication sent via electronic mail is personally delivered at the time the communication was sent by the PEO to a valid electronic mail address for the client employer.

(C) If a PEO fails to comply with a client employer's written request for information, the client employer may submit a complaint to the bureau.

(1) The bureau will investigate the complaint to determine whether the PEO has met the requirements of this rule.

(2) If the bureau finds the PEO has failed to meet the requirements of this rule:

(a) The bureau will provide the requested information to the client employer. All administrative costs associated with investigation and providing the information to the client employer will be assessed to the PEO;

(b) The bureau will provide the PEO's client employers with notification of the failure to comply with the rule, and advise the client employers of their ability to request information under this rule.

Replaces: Part of 4123-17-15

Effective: 02/17/2014
R.C. 119.032 review dates: 02/01/2019
Promulgated Under: 119.03
Statutory Authority: 4121.12 , 4121.121 , 4121.30 , 4123.05 , 4125.02
Rule Amplifies: 4125.03
Prior Effective Dates: 7/1/97; 11/22/04

4123-17-15.7 Denial or revocation of PEO registration.

(A) The administrator shall deny or revoke the registration of a PEO or PEO reporting entity if it fails to comply with the requirements of rule 4123-17-15.4 of the Administrative Code.

(B) The administrator may deny or revoke the registration of a PEO or PEO reporting entity and rescind its status as a coemployer upon finding that the PEO or PEO reporting entity 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 of rules 4123-17-15 to 4123-17-15.5 of the Administrative Code.

(C) A PEO may appeal a denial or revocation of status under this rule pursuant to the administrative hearing procedure set forth in Chapter 119. of the Revised Code.

(D) 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.

(E) 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.

(F) When an employer contacts the bureau to determine whether a particular PEO is registered, if the administrator has denied or revoked that PEO'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 PEO has the right to appeal the administrator's decision.

Replaces: Part of 4123-17-15

Effective: 02/17/2014
R.C. 119.032 review dates: 02/01/2019
Promulgated Under: 119.03
Statutory Authority: 4121.12 , 4121.121 , 4121.30 , 4123.05 , 4125.02
Rule Amplifies: 4125.051 , 4125.06
Prior Effective Dates: 7/1/97; 11/22/04

4123-17-16 Premium security deposit.

(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 on at least an annual basis. 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.

Effective: 09/23/2013
R.C. 119.032 review dates: 06/14/2013 and 07/01/2018
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

4123-17-17 Auditing and adjustment of payroll reports.

(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

4123-17-18 Claim free discount.

(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.

(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 in the calendar year immediately preceding the policy year in which the discount is to be applied; 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 may investigate employers for compliance with the criteria of this rule.

Replaces: 4123-17-18

Effective: 07/01/2012
Promulgated Under: 111.15
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

4123-17-18.1 Early payment discount program.

(A) Private employers.

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

(2) The employer may participate in any other alternative rating program offered by the bureau unless otherwise specified by rule 4123-17-74 of the Administrative Code.

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

(a) 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 (C) of this rule.

(b) 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.

(c) 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.

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

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

(B) Public employers.

(1) Any public employer taxing district employer may qualify for the early payment discount.

(2) In order to qualify for the early payment discount, the employer must pay its total premium due to the bureau on or before May fifteenth of each year.

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

(C) Calculation of discount.

(1) The bureau will determine the discount rate for private and public employers 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) The early payment discount shall apply to the total blended premium paid by the employer.

Effective: 07/01/2013
Promulgated Under: 111.15
Statutory Authority: 4121.12 , 4121.121
Rule Amplifies: 4123.29 , 4123.34
Prior Effective Dates: 4/10/01, 7/21/08, 7/1/12

4123-17-19 Employer contribution to the marine industry fund.

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, 2014 as indicated in the appendix to this rule.

Click to view Appendix

Effective: 07/01/2014
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, 7/1/09, 7/1/10, 7/1/11, 7/1/12, 7/1/13

4123-17-20 Employer contribution to the coal-workers pneumoconiosis fund.

The administrator of workers' compensation, with the advice and consent of the workers' compensation board of directors, 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, 2014, as indicated in appendix A to this rule.

Click to view Appendix

Click to view Appendix

Effective: 07/01/2014
Promulgated Under: 111.15
Statutory Authority: 4121.12 , 4121.121
Rule Amplifies: 4123.34 , 4131.04
Prior Effective Dates: 7/1/90; 7/1/91; 7/1/92; 7/1/97; 7/1/98; 7/1/01, 7/1/11, 8/25/11

4123-17-22 Traveling expense.

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.

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

4123-17-23 Duties outside the state.

(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

4123-17-25 Military and naval service.

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.

(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

4123-17-26 Minimum annual administrative charge.

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

4123-17-27 Protest of an employer's experience.

A protest of an employer's experience can be submitted in writing, including 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: 09/23/2013
R.C. 119.032 review dates: 06/14/2013 and 07/01/2018
Promulgated Under: 119.03
Statutory Authority: 4121.12, 4121.121
Rule Amplifies: 4123.29, 4123.32, 4123.34
Prior Effective Dates: 11/26/79, 12/14/92, 10/16/08

4123-17-28 Correction of inaccuracies affecting employer's premium rates.

(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 rating year immediately proceding the current rating year, and to all rating years subsequent to the current 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.

Effective: 09/23/2013
R.C. 119.032 review dates: 06/14/2013 and 07/01/2018
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

4123-17-29 Disabled workers' relief fund; employers' assessments and self-insurers' payments.

(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: six cents per one-hundred-dollar unit of payroll, effective July 1, 2014;

(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 DWRF.

(2) In order to make DWRF payments to claimants having dates of injury or disability 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 DWRF.

(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.

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

(3) Upon default and a finding of noncompliance by the administrator of workers' compensation, reimbursement shall be made from the self-insuring employers' guaranty fund.

Effective: 07/01/2014
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, 7/1/08, 7/1/13

4123-17-30 Payroll limitations for corporate officers, sole proprietors, an individual incorporated as a corporation with no employees, members of partnerships, and family farm corporations.

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

4123-17-31 Long-term care loan fund program.

(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: 11/26/2013 and 11/01/2018
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

4123-17-32 Self-insuring employer assessment based upon paid compensation.

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, 2014, for the period July 1, 2014, to June 30, 2015, payable in two equal remittances by February 28, 2015, and August 31, 2015, 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 2013:

(1) Safety and hygiene fund: 0.0050.

(2) Administrative cost fund, BWC: 0.0871.

(3) Administrative cost fund, IC: 0.0668.

(4) Surplus fund (mandatory): 0.0630.

(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 2013:

Surplus fund (rehabilitation): 0.1300.

(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 2013:

Surplus fund (handicap): 0.2480.

(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 2013:

Surplus fund (disallowed claims reimbursement): 0.0173.

(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 2013:

(1) Administrative cost fund, BWC: 0.0871.

(2) Administrative cost fund, IC: 0.0668.

(3) Surplus fund (mandatory): 0.0630.

(H) If the paid compensation for a self-insuring employer for calendar year 2013 is less than thirteen thousand five hundred nineteen dollars and sixty cents, the minimum assessments shall be paid as follows:

(1) Safety and hygiene fund: $ 67.60.

(2) Administrative cost fund, BWC: $1, 177.56.

(3) Administrative cost fund, IC: $ 903.11 .

(4) Surplus fund (mandatory): $ 851.73.

If the paid compensation for calendar year 2013 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, 2014 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 2013 for a self-insuring employer which has opted to participate in the handicap reimbursement program is less than seven hundred sixteen thousand seven hundred sixty-three dollars and one cent, 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 thirteen thousand five hundred nineteen dollars and sixty cents in paid compensation for calendar year 2013 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. The bureau may, in its discretion, permit an employer to pay its total assessment obligation under this paragraph in a single payment, discounted for present value at a rate determined by the bureau. An employer electing to pay its assessment obligations in a single payment must continue to administer self-insured claims and pay compensation and benefits pursuant to paragraph (C) of rule 4123-19-05 of the Administrative Code.

(I) If an individual self-insuring employer has become self-insured in the last five years (on or after July 1, 2009) paid compensation shall be as defined in paragraph (B) of this rule and shall additionally include compensation paid in calendar year 2013 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, 2015, and August 31, 2015, 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 2013:

Self-insuring employer guaranty fund: 0.0470.

(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, 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 paragraph, "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: 07/01/2014
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, 1/1/94, 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, 7/1/09, 7/1/10, 7/1/11, 7/1/12, 4/22/13, 7/1/13

4123-17-33 Public employer taxing district industry group and limited loss ratio tables.

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 and B to be effective January 1, 2014 applicable to the payroll reporting period January 1, 2014 through December 31, 2014 for public employer taxing districts as indicated in appendices A and B to this rule.

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Effective: 01/01/2014
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, 1/1/10, 1/1/11, 1/1/12, 1/1/13

4123-17-33.1 Public employer taxing districts credibility table.

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, 2013, for public employer taxing districts as indicated in appendix A to this rule.

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Effective: 01/01/2013
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, 1/1/10, 1/1/11, 1/1/12

4123-17-34 Public employer taxing districts contribution to the state insurance fund.

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, 2014 applicable to the payroll reporting period January 1, 2014 through December 31, 2014 for public employer taxing districts as indicated in the appendix to this rule.

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Effective: 01/01/2014
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, 1/1/10, 1/1/11, 1/1/12, 1/1/13, 1/25/13

4123-17-35 Public employer state agency contribution to the state insurance fund.

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, 2013, applicable to the payroll reporting period July 1, 2013, through June 30, 2014, for public employer state (PES) agencies, including state universities and university hospitals, as indicated in the appendix 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, 2013, through June 30, 2014, for public employer state agencies, including state universities and university hospitals, at ten and one hundredths per cent of the contributions as indicated in the appendix to this rule. After the end of calendar year 2013, 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 the appendix to this rule.

(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) LSS rate calculation .

(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 losses used to calculate the contribution rate for future policy years.

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

(3) LSS reimbursement payments.

(a) A LSS 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 previously used in rate calculations . The settlement amount will not be included in the quarterly billings.

(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 division.

(4) Change in status.

(a) When a PES agency combines with another PES agency, the succeeding agency's participation in this program will not be affected.

(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. Participation 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 LSS program.

(a) A PES agency may request, in writing, to terminate a LSS 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 started participating in the LSS program or its participation was renewed for the policy year beginning July 1, 2011, the request must be submitted before January 1, 2014.

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

Effective: 07/01/2013
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, 7/1/09, 7/1/10, 7/1/11, 7/1/12

4123-17-36 Administrative cost contribution.

(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: 12.79 per cent of premium effective July 1, 2014.

(2) Public employer taxing districts: 8.25 per cent of premium effective January 1, 2014.

(3) Public employer state agencies: 10.63 per cent of premium effective July 1, 2014.

(E) Administrative cost rates for the industrial commission.

(1) Private employers: 1.87 per cent of premium effective July 1, 2014.

(2) Public employer taxing districts: 1.81 per cent of premium effective January 1, 2014.

(3) Public employer state agencies: 3.12 per cent of premium effective July 1, 2014.

Effective: 07/01/2014
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, 7/1/09, 7/1/10, 7/1/11, 7/1/12, 7/1/13

4123-17-37 Employer contribution to the safety and hygiene fund.

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 half of one per cent of paid premium for public employer taxing districts , one half of one per cent of paid premium for public employer state agencies, and one per cent of paid premium for private employers.

Effective: 07/01/2010
Promulgated Under: 111.15
Statutory Authority: 4121.12 , 4121.121
Rule Amplifies: 4121.37 , 4123.34
Prior Effective Dates: 7/1/90, 7/1/93, 7/1/98, 7/1/99, 7/21/08, 1/1/10

4123-17-38 Private employer contribution to the premium payment security fund.

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.

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

4123-17-40 Self-insured buy-out factors.

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

4123-17-41 Retrospective rating definitions applicable to any employer.

Rules 4123-17-41 to 4123-17-54 of the Administrative Code apply to individual employer retrospective rating. 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: 11/15/2010
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, 10/5/05

4123-17-42 Eligibility for retrospective rating.

(A) An employer that is either a private or public employer as defined in division (B)(1) of section 4123.01 of the Revised Code 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) As of the application deadline, the employer must be current with respect to all payments due the bureau, as defined in paragraph (A)(3) of rule 4123-17-14 of the Administrative Code.

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

(3) The employer must be in an active status as of the application deadline. The administrator may waive this requirement for a new business entity moving into Ohio.

(4) 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 "Retrospective Rating Minimum Premium Percentages Table." If estimated premium is less than the minimum experience-rated premium threshold listed on the "Retrospective 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.

(5) The employer shall maintain a safety program approved by the division of safety and hygiene.

(C) In addition to the requirements of paragraph (B) of this rule, for the tier I retrospective rating plan, a private employer must submit audited financial statements prepared in accordance with 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 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 I retrospective rating plan, a public employer must submit audited or reviewed financial statements prepared in accordance with generally accepted accounting principles (GAAP) to satisfy the following requirements:

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

(a) Significant asset size of the public employer in the state of Ohio;

(b) The public employer's debt structure, including current versus long term debt, recent drastic changes in debt, etc.;

(c) Whether the public employer has significant fluctuations in amounts reported on the balance sheet and statement of operations from one year to the next.

(d) The public employer's underlying or uninsured bond rating.

(2) The public 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 public 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.

(4) The public employer cannot be under fiscal watch or emergency pursuant to section 118.022 , 118.04 or 3316.03 of the Revised Code as of the application deadline for retrospective rating.

(E) In addition to the requirements of paragraph (B) of this rule, for the tier II retrospective rating plan, a private employer must submit audited financial statements prepared in accordance with generally accepted accounting principles (GAAP). A public employer must submit audited or reviewed financial statements prepared in accordance with GAAP or other comprehensive basis of accounting as permitted in Ohio auditor of state bulletin 2005-002.

For a private employer that does not demonstrate the ability to satisfy the financial criteria of paragraph (C) of this rule or a public employer that does not demonstrate the ability to satisfy the financial criteria of paragraph (D) of this rule, the financial statements provided by 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.

Effective: 07/01/2012
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, 10/10/01, 10/8/09, 9/12/09, 11/1/11

4123-17-42.1 [Rescinded]Eligibility for retrospective rating - public employer.

Effective: 11/15/2010
Promulgated Under: 111.15
Statutory Authority: 4121.12 , 4121.121
Rule Amplifies: 4123.29 , 4123.34
Prior Effective Dates: 10/8/09

4123-17-43 Application for retrospective rating plan.

(A) All operations of an employer electing retrospective rating are subject to retrospective rating.

(B) The application must be filed on a bureau application form for the 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.

(C) The application and all other required information must be filed by the application deadline in any bureau office. 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.

(D) All changes to the original application must be filed on another application form for the retrospective rating plan prior to the filing deadline. Any changes made must be completed in writing and signed by an officer of the company, and be filed prior to the filing deadline. Any changes received by the bureau of workers' compensation after the filing deadline will not be accepted. The latest application form or rescission received by the bureau prior to the filing deadline will be used in determining the premium obligation.

Effective: 11/15/2010
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

4123-17-44 Minimum premium.

(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.

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

4123-17-45 Initial computation.

(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

4123-17-46 Premium adjustments.

(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

4123-17-47 Final settlement.

(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.

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

4123-17-48 Penalties.

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.

Effective: 11/01/2011
Promulgated Under: 111.15
Statutory Authority: 4121.12 , 4121.121 , 4121.30
Rule Amplifies: 4123.29 , 4123.34
Prior Effective Dates: 7/1/88; 10/2/90; 7/1/94

4123-17-49 Handicap reimbursement.

(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.

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

4123-17-50 Catastrophes.

(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

4123-17-51 Termination and transfers.

(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

4123-17-52 Parameters of the retrospective rating plan.

(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

4123-17-53 Private employer retrospective rating plan minimum premium percentages.

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

4123-17-54 Public employer retrospective rating plan minimum premium percentages.

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 0.870.710.870.710.870.710.870.71

30,000 - 34,999 0.840.680.840.680.840.680.840.68

35,000 - 39,999 0.810.650.810.650.810.650.810.65

40,000 - 44,999 0.790.630.790.630.790.630.790.63

45,000 - 49,999 0.770.610.770.610.770.610.770.61

50,000 - 54,999 0.750.590.750.590.750.590.750.59

55,000 - 59,999 0.730.570.730.570.730.570.730.57

60,000 - 64,999 0.720.560.720.560.720.560.720.56

65,000 - 69,999 0.700.540.700.540.700.540.700.54

70,000 - 74,999 0.690.530.690.530.690.530.690.53

75,000 - 79,999 0.680.520.680.520.680.520.680.52

80,000 - 84,999 0.660.510.660.510.660.510.660.51

85,000 - 89,999 0.650.500.650.500.650.500.650.50

90,000 - 94,999 0.640.490.640.490.640.490.640.49

95,000 - 99,999 0.640.490.640.490.640.490.640.49

100,000 - 112,499 0.620.470.620.470.620.470.620.47

112,500 - 124,999 0.600.460.600.460.600.460.600.46

125,000 - 137,499 0.590.450.590.450.590.450.590.45

137,500 - 149,999 0.570.430.570.430.570.430.570.43

150,000 - 162,499 0.560.430.560.430.560.430.560.43

162,500 - 174,999 0.540.420.540.410.540.410.540.41

175,000 - 187,499 0.530.410.530.400.530.400.530.40

187,500 - 199,999 0.530.410.530.400.530.400.530.40

200,000 - 224,999 0.510.400.510.390.510.390.510.39

225,000 - 249,999 0.500.390.500.380.500.380.500.38

250,000 - 299,999 0.480.380.480.370.480.370.480.37

300,000 - 349,999 0.460.380.460.360.460.350.460.35

350,000 - 399,999 0.440.370.440.350.440.340.440.34

400,000 - 499,999 0.430.370.420.340.420.340.420.33

500,000 - 999,999 0.400.360.380.330.380.320.370.31

1,000,000 - 1,999,999 0.370.360.350.330.340.310.330.27

2,000,000 - 2,999,999 0.360.360.340.330.320.310.310.25

3,000,000 - 3,999,999 0.360.360.330.330.320.310.300.23

4,000,000 - 4,999,999 0.360.360.330.330.320.310.290.23

5,000,000 - 5,999,999 0.360.360.330.330.310.310.290.22

6,000,000 - 6,999,999 0.360.360.330.330.310.310.290.22

7,000,000 - 7,999,999 0.360.360.330.330.310.310.280.22

8,000,000 - 8,999,999 0.360.360.330.330.310.310.280.22

9,000,000 - 9,999,999 0.360.360.330.330.310.310.280.22

10,000,000 - 10,999,999 0.360.360.330.330.310.310.280.22

11,000,000 - 11,999,999 0.360.360.330.330.310.310.280.22

12,000,000 - 12,999,999 0.360.360.330.330.310.310.280.22

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 0.870.87

30,000 - 34,999 0.840.84

35,000 - 39,999 0.810.81

40,000 - 44,999 0.790.79

45,000 - 49,999 0.770.77

50,000 - 54,999 0.750.75

55,000 - 59,999 0.730.73

60,000 - 64,999 0.720.72

65,000 - 69,999 0.700.70

70,000 - 74,999 0.690.69

75,000 - 79,999 0.680.68

80,000 - 84,999 0.660.66

85,000 - 89,999 0.650.65

90,000 - 94,999 0.640.64

95,000 - 99,999 0.640.64

100,000 - 112,499 0.620.62

112,500 - 124,999 0.600.60

125,000 - 137,499 0.590.59

137,500 - 149,999 0.570.57

150,000 - 162,499 0.570.56

162,500 - 174,999 0.550.55

175,000 - 187,499 0.550.54

187,500 - 199,999 0.540.53

200,000 - 224,999 0.530.52

225,000 - 249,999 0.520.51

250,000 - 299,999 0.510.49

300,000 - 349,999 0.500.48

350,000 - 399,999 0.490.47

400,000 - 499,999 0.480.46

500,000 - 999,999 0.460.43

1,000,000 - 1,999,999 0.450.42

2,000,000 - 2,999,999 0.440.41

3,000,000 - 3,999,999 0.440.41

4,000,000 - 4,999,999 0.440.41

5,000,000 - 5,999,999 0.440.41

6,000,000 - 6,999,999 0.440.41

7,000,000 - 7,999,999 0.440.41

8,000,000 - 8,999,999 0.440.41

9,000,000 - 9,999,999 0.440.41

10,000,000 - 10,999,999 0.440.41

11,000,000 - 11,999,999 0.440.41

12,000,000 - 12,999,999 0.440.41

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

4123-17-55 Transitional work development grant and performance bonus.

(A) Definitions.

As used in this rule:

(1) "Application deadline" means the applicable application deadline set forth in appendix A or B to rule 4123-17-74 of the Administrative Code.

(2) "Client employer" has the same meaning as defined in paragraph (A)(2) of rule 4123-17-15 of the Administrative Code.

(3) "PEO" has the same meaning as defined in paragraph (A)(1) of rule 4123-17-15 of the Administrative Code.

(4) "Transitional work" has the same meaning as defined in paragraph (BB) of rule 4123-6-01 of the Administrative Code.

(5) "Transitional work developer" means the provider who develops the employer's transitional work program. A transitional work developer shall:

(a) Be certified by the bureau to participate in the health partnership program as one of the following provider types designated in rule 4123-6-02.2 of the Administrative Code:

(i) A vocational rehabilitation case manager,

(ii) An occupational therapist, or

(iii) A physical therapist.

(b) Complete bureau sponsored transitional work development training prior to delivering transitional work programs; and

(c) Have verified experience in developing transitional work programs according to the bureau's transitional work policy, or verified mentoring experience with a developer of transitional work services according to the bureau's transitional work policy.

(B) Eligibility requirements.

(1) To receive benefits under this rule, the employer must meet the following criteria:

(a) At the time of bureau review of the application for the program, the employer must be current with respect to all payments due the bureau, as defined in paragraph (A)(3) of rule 4123-17-14 of the Administrative Code.

(b) The employer must not have cumulative lapses in workers' compensation coverage in excess of forty days within the twelve months preceding the application date for the grant or the application deadline for the performance bonus.

(c) The employer must be in an active, reinstated, or debtor-in-possession policy status at the time of bureau review of application for the program.

(d) The employer must continue to meet all eligibility requirements during participation in the program.

(2) The following employers shall not be eligible for either a transitional work program development grant or a transitional work performance bonus under this rule:

(a) Employers paying the minimum administrative charge for the applicable payroll reporting period as set forth in rule 4123-17-26 of the Administrative Code.

(b) State agencies.

(c) Self-insuring employers providing compensation and benefits pursuant to section 4123.35 of the Revised Code.

(3) The following employers shall not be eligible to receive a transitional work program development grant under paragraph (C) of this rule:

(a) Employers reporting payroll for elective coverage only, as reported on the employer's most recent payroll report.

(b) Employers without at least one lost-time claim in the employer's experience period, as defined in paragraph (D) of rule 4123-17-03 of the Administrative Code.

(4) Notwithstanding paragraph (B)(3)(b) of this rule, an employer that has more than one but less than two full years of recorded premium shall be eligible to receive a grant under paragraph (C) of this rule, even if such employer does not have a lost-time claim in its claims history.

(5) An employer that is found to be ineligible for participation in the program may reapply for a subsequent program year.

(C) Transitional work program development grant.

(1) An employer interested in obtaining a transitional work program development grant shall apply to the bureau on a form provided by the bureau. 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) The bureau shall evaluate each application to determine the employer's eligibility to receive a transitional work program development grant, and shall have the final authority to approve a grant for an eligible employer and to determine the amount of the grant. If, upon review of an application, the bureau determines that it can assist the employer in developing a transitional work program, the bureau may deny the grant and provide assistance to the employer directly.

(3) An employer may be eligible for no more than one transitional work program development grant per policy number. An employer who previously received a grant from the bureau for development of a transitional work program shall be ineligible to receive a subsequent grant under this rule; however, the bureau shall provide assistance to employers as needed to update transitional work programs developed with previous grants.

(4) Grant amounts will be determined by the bureau based on employer size and the complexity of services needed for transitional work services. Factors which may determine appropriate grant amounts may include the employer's:

(a) Payroll;

(b) Job classifications;

(c) Job analyses needed; and

(d) Collective bargaining units.

(5) The bureau shall not reimburse an employer for costs associated with a transitional work developer's preparing and submitting a proposal to an employer, and shall not reimburse for costs determined by the bureau to be ineligible or unnecessary. The bureau may monitor the content and implementation of transitional work services.

(D) Transitional work performance bonus program.

An employer who has developed and implemented a transitional work program may be eligible to receive a transitional work performance bonus as provided for in this rule.

(1) An employer interested in participating in the transitional work performance bonus program shall apply to the bureau on a form provided by the bureau. 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) The bureau shall evaluate each application to determine the employer's eligibility to participate in the transitional work performance bonus program at the time of the application. The bureau shall have the final authority to approve an eligible employer for participation in the transitional work performance bonus program.

(3) The transitional work program performance bonus calculation shall occur at six months following the end of the applicable program year. The bureau will evaluate all claims of the employer with injury dates that fall within the applicable program year to determine:

(a) How many of those claims had the potential for transitional work services, and

(b) How many of the claims identified in paragraph (D)(3)(a) of this rule utilized transitional work services.

(4) The bureau will calculate the employer's percentage of claims with potential for transitional work services in which transitional work services were utilized.

(5) The employer will receive a performance bonus equal to the percentage calculated pursuant to paragraph (D)(4) of this rule multiplied by a percentage of the employer's pure premium for the applicable policy year as set forth in the appendix to rule 4123-17-75 of the Administrative Code. The performance bonus will be posted to the employer's account with the bureau.

(6) A PEO shall be eligible to receive a transitional work performance bonus under this rule for claims in which the PEO was the employer of record on the date of injury and transitional work services were available under a transitional work program of either the PEO or the client employer.

(7) An employer may appeal the bureau's transitional work performance bonus program application rejection or the bureau's transitional work performance bonus determination 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: 01/01/2013
Promulgated Under: 111.15
Statutory Authority: 4121.12 , 4121.121
Rule Amplifies: 4123.29 , 4123.34
Prior Effective Dates: 7/1/12

4123-17-56 Safety Grant Programs.

(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

4123-17-56.1 Workplace wellness grant program rule.

(A) For purposes of this rule:

(1) "Health risk factors" means physical and mental characteristics that can be modified, nearly always with much less cost compared to waiting for sickness and then attempting to treat the disease.

(2) "State-fund employer" or "employer" means a private state fund employer, a public employer taxing district, a marine industry fund employer, or a coal-workers' pneumoconiosis fund employer.

(B) Workplace wellness grant program.

(1) Pursuant to section 4121.37 of the Revised Code, the administrator may establish a program of workplace wellness grants for the prevention of occupational injuries and illnesses for which an employer is eligible under this rule. The workplace wellness grant may include grants to an employer to provide funds to address health risk factors to reduce the number and severity of workplace injuries and illnesses.

(2) The bureau shall determine whether the employer is eligible for the workplace wellness grant program under this rule. The bureau may limit participation in the workplace wellness grant program based upon the availability of bureau resources for the program and upon the merits of the employer's proposal. The bureau shall award grant funds for employers on a first come, first serve basis. The workplace wellness grant program is available to a state-fund employer that satisfies the following criteria:

(a) 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 bureau.

(b) The employer shall have and shall maintain continuous active state fund coverage to participate in the workplace wellness grant program.

(c) For grants to an employer to provide funds for the research and implementation of workplace wellness programs, the employer shall submit to the bureau an application for participation in the workplace wellness grant program. The employer shall demonstrate a need for workplace wellness grant program.

(d) The employer is not eligible for a workplace wellness program grant if the employer has an existing workplace wellness program. The bureau may provide a workplace wellness program grant to an employer to expand the employer's wellness program in order to establish a new wellness program. The bureau has the sole authority to determine whether a proposed workplace wellness program qualifies for a grant under this rule.

(3) The bureau shall assess the employer's wellness proposal and shall review the workplace wellness grant program application, including the baseline assessment of the worksite provided in the application.

(a) If the bureau accepts the employer into the workplace wellness grant program, the employer shall submit biannual and annual reporting to the bureau for a period of four years following the implementation of the wellness program. The employer shall develop an implementation strategy plan for the workplace wellness grant program.

(b) The bureau and employer shall enter into a written agreement detailing the rights, obligations, and expectations of the parties for performance of the workplace wellness grant program.

(c) The employer shall implement the wellness program within three months from the date that the bureau disburses the grant funds to the employer. The implementation of the wellness program cannot take place before the disbursement of the grant funds.

(4) The employer shall agree to not eliminate jobs or reduce employment due to the implementation of the workplace wellness program. 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 workplace wellness grant program.

(5) An employer who complies with the requirements of the workplace wellness 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 workplace wellness grant amount.

(b) The bureau may establish a limit for the amount of monies it disburses for the workplace wellness grant and this amount shall be established by written agreement with the employer.

(c) The bureau may require that the employer must execute its wellness program through an approved vendor.

(d) The bureau shall monitor the employer's use of the workplace wellness grant program amount and may recover the entire grant amount if the bureau determines that the employer has not used the grant for the purposes of the workplace wellness grant program or has otherwise violated the written agreement.

(6) Reconsideration of determination of eligibility.

(a) An employer may request reconsideration from a decision finding the employer did not meet the requirements provided in paragraph (B)(2) or (B)(3) 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.

(b) The employer may submit a request for reconsideration of the superintendent's decision to the adjudicating committee.

(c) The adjudicating committee shall consider the request and make a recommendation on the employer's eligibility to the administrator.

(d) The decision of the administrator shall be final.

(7) Upon the approval of the proposed wellness program, 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 workplace wellness grant funds toward the approved expenditures.

(8) The bureau shall evaluate the research data from the workplace wellness grant program on a periodic basis. The bureau may publish reports of the research to assist employers in preventing workplace injuries and illnesses.

(C) Continuing eligibility for the workplace wellness grant program once acceptance has been granted.

(1) An employer participating in the workplace wellness grant program shall be eligible to continue participating in the program only if the employer maintains active workers' compensation coverage according to the following standards:

(a) 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 bureau.

(b) 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 must not have cumulative lapses in workers' compensation coverage in excess of forty days within the prior twelve months.

(2) After the first year of enrollment, an employer participating in the workplace wellness grant program shall be eligible to renew its application and continue participation at the discretion of the policy established by the bureau.

(3) Applications submitted for the workplace wellness grant program may be processed and renewed by the bureau on a rolling basis.

(D) Disqualification from the workplace wellness grant program.

(1) An employer shall be immediately disqualified from the participation in the workplace wellness grant program if the employer is found by the bureau to have knowingly misrepresented information on the initial application for employee participation and compliance with program requirements.

As used in this paragraph, "knowingly" means that the employer had actual knowledge of the misrepresentation and was aware that the misrepresentation would cause a certain result.

(2) An employer shall be immediately disqualified from participation in the workplace wellness grant program if the bureau determines the employer has violated any state or federal statutes pertaining to confidential personal information and personal health information, including but not limited to the statutes and rules contained in rule 4123-10-04 of the Administrative Code.

(3) An employer shall be immediately disqualified from participation in the workplace wellness grant program if the bureau determines the employer has coerced employees to participate in the workplace wellness grant program. As used in this paragraph, "coerced" is defined as intimidating an employee to compel the individual to do some act against his or her will by the use of psychological pressure, physical force, or threats. The definition of coercion as stated in section 2905.12 of the Revised Code shall also apply to this paragraph.

An employer that is immediately disqualified from participation in the workplace wellness grant program under the three preceding paragraphs shall make restitution of all monies awarded by the bureau for participating in the program.

Effective: 01/20/2012
Promulgated Under: 111.15
Statutory Authority: 4121.12 , 4121.121
Rule Amplifies: 4123.29 , 4123.34

4123-17-56.2 Safety council rebate incentive program.

(A) Definitions.

For the purposes of this rule,

(1) "Local safety council" means an entity contracted with the bureau to provide a safety campaign in accordance with standards set forth by the superintendent of the division of safety and hygiene.

(2) "Program year" means July first to June thirtieth, inclusive.

(3) "Superintendent" means the superintendent of the division of safety and hygiene or the superintendent's designee.

(B) For each program year, the administrator may establish the following incentives for employer participation in a local safety council:

(1) Participation rebate.

(a) The superintendent shall determine the participation requirements for each program year and publish such program requirements no later than sixty days prior to the start of the program year.

(b) The participation bonus shall be equal to the amount identified in the appendix to rule 4123-17-75 of the Administrative Code times the employer's pure premium costs during the program year.

(2) Performance rebate.

(a) The superintendent shall determine the performance requirements for each program year and publish such program requirements no later than sixty days prior to the start of the program year.

(b) The performance bonus shall be equal to the amount identified in the appendix to rule 4123-17-75 of the Administrative Code times the employer's pure premium costs during the program year.

(C) Eligibility requirements.

(1) To receive a rebate as set forth in paragraph (B)(1) or (B)(2) of this rule the employer must meet the following criteria:

(a) The employer must be current with respect to all payments due the bureau, as defined in paragraph (A)(3) of rule 4123-17-14 of the Administrative Code.

(b) 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 must not have cumulative lapses in workers' compensation coverage in excess of forty days within the prior twelve months.

(2) An employer shall not be eligible to receive a rebate as set forth in paragraph (B)(1) or (B)(2) of this rule if:

(a) The employer is a self-insuring employer providing compensation and benefits pursuant to section 4123.35 of the Revised Code.

(b) The employer is a state agency.

(c) The employer is participating in a discount program designated as incompatible with the rebate under rule 4123-17-74 of the Administrative Code.

(3) A PEO shall not be eligible to receive benefits under this rule unless all of the following requirements are met:

(a) The PEO and each of the PEO's client employers meet all eligibility and program requirements.

(b) The PEO electronically submits affirmation that the PEO and each of the PEO's client employers has enrolled in a local safety council as of July thirty-first of the applicable program year.

(c) The PEO submits a list of each of the client employers with whom it has an agreement as of May first of the applicable policy year.

(i) The list shall be electronically submitted on a form prescribed by the bureau, and shall include each client employer's name, address, federal tax identification number, bureau of workers' compensation risk number; and the amount of payroll, listed by manual class code, reported by the PEO on behalf of each client employer.

(ii) If the bureau determines the PEO has manipulated the client list for purposes of obtaining benefits under this rule, the PEO shall not be eligible to receive such benefits.

(iii) The bureau shall hold the list required under this paragraph as confidential pursuant to section 4125.05 of the Revised Code.

(d) The forms and deadlines for meeting the requirements of paragraphs (C)(3)(b) and (C)(3)(c) of this rule shall be prescribed by the superintendent.

Effective: 01/01/2013
Promulgated Under: 111.15
Statutory Authority: 4121.12 , 4121.121
Rule Amplifies: 4123.29 , 4123.34
Prior Effective Dates: 7/1/12

4123-17-56.3 Industry-specific safety program.

(A) Definitions.

(1) "Eligibility determination year" means the last full policy year for which payroll information is available.

(2) "Program year" means the policy year for which the employer seeks to obtain the industry-specific safety discount.

(3) "Loss prevention activities" means any of the following:

(a) Industry-specific safety classes prescribed by the division of safety and hygiene;

(b) Individual safety consulting with staff from the division of safety and hygiene or a sponsor approved by the division of safety and hygiene to conduct such consulting, and

(c) The division of safety and hygiene's annual safety congress.

(B) An employer may be eligible for an industry-specific safety bonus if:

(1) The employer completes a safety risk assessment prescribed by the division of safety and hygiene and provides any follow-up data requested by the division, and

(2) The employer completes loss prevention activities as follows:

(a) If the employer reports payroll less than or equal to one hundred thousand dollars in the initial eligibility determination year, the employer participates in any one loss prevention activity;

(b) If the employer reports payroll greater than one hundred thousand dollars and less than or equal to three hundred thousand dollars in the initial eligibility determination year, the employer participates in any two loss prevention activities;

(c) If the employer reports payroll greater than three hundred thousand dollars in the initial eligibility determination year, the employer participates in any three loss prevention activities.

In determining the requirements under this section for new employers without a full year of recorded premium, the bureau may calculate and use the employer's expected payroll.

(3) Completion of the requirements of this section shall be determined by the division of safety and hygiene.

(4) Availability of individual safety consulting with staff from the division of safety and hygiene will be at the discretion of the division of safety and hygiene.

(C) Eligibility requirements.

(1) To receive the industry-specific safety program bonus under this rule, the employer must make application to the bureau by the applicable application deadline set forth in appendix A or B to rule 4123-17-74 of the Administrative Code and must meet the following criteria as of the application deadline:

(a) The employer must be current with respect to all payments due the bureau, as defined in paragraph (A)(3) of rule 4123-17-14 of the Administrative Code;

(b) 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 must not have cumulative lapses in workers' compensation coverage in excess of forty days within the prior twelve months.

(2) An employer shall not be eligible to receive benefits under this rule if:

(a) The employer pays the minimum administrative charge for the applicable payroll reporting period as set forth in rule 4123-17-26 of the Administrative Code.

(b) The employer is a state agency.

(c) The employer is a self-insuring employer providing compensation and benefits pursuant to section 4123.35 of the Revised Code.

(3) A PEO shall not be eligible to receive benefits under this rule unless all of the following requirements are met:

(a) The PEO and each of the PEO's client employers meet all eligibility and program requirements.

(b) The PEO electronically submits affirmation that the PEO and each of the PEO's client employers has made application for the program consistent with the requirements of paragraph (C)(1) of this rule.

(c) The PEO submits a list of each of the client employers with whom it has an agreement as of May first of the applicable policy year.

(i) The list shall be electronically submitted on a form prescribed by the bureau, and shall include each client employer's name, address, federal tax identification number, bureau of workers' compensation risk number, and the amount of payroll, listed by manual class code, reported by the PEO on behalf of each client employer.

(ii) If the bureau determines that the PEO has manipulated the client list for purposes of obtaining benefits under this rule, the PEO shall not be eligible to receive such benefits.

(iii) The bureau shall hold the list required under this paragraph as confidential pursuant to section 4125.05 of the Revised Code.

(d) The forms and deadlines for meeting the requirements of paragraphs

(C)

(3)

(b) and (C)(3)(c) of this rule shall be prescribed by the superintendent.

(4) After the first program year in which an employer receives the industry-specific safety program bonus, the employer may receive the bonus in subsequent years if the employer meets the following requirements:

(a) A If the employer reports payroll less than or equal to one hundred thousand dollars in the applicable eligibility determination year, the employer participates in any one loss prevention activity;

(b) If the employer reports payroll greater than one hundred thousand dollars and less than or equal to three hundred thousand dollars in the applicable eligibility determination year, the employer participates in any two loss prevention activities;

(c) If the employer reports payroll greater than three hundred thousand dollars in the applicable eligibility determination year, the employer participates in any three loss prevention activities.

(D) The industry-specific safety program bonus shall be equal to the amount identified in the appendix to rule 4123-17-75 of the Administrative Code times the employer's pure premium costs during the program year.

Effective: 09/27/2013
Promulgated Under: 111.15
Statutory Authority: 4121.12 , 4121.121
Rule Amplifies: 4123.29 , 4123.34
Prior Effective Dates: 7/1/12, 1/1/13

4123-17-57 Premium for construction industry.

(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.

Eff 1-1-95
Rule promulgated under: RC 111.15
Rule authorized by: RC 4121.12 , 4121.30
Rule amplifies: RC 4123.34

4123-17-58 Drug-free safety program (DFSP) and comparable program.

(A) Definitions.

For purposes of this rule:

(1) "Application deadline" means the applicable deadline set forth in appendix A or B to rule 4123-17-74 of the Administrative Code.

(2) "Client employer" has the same meaning as defined in paragraph (A)(2) of rule 4123-17-15 of the Administrative Code.

(3) "Comparable program" means a program referred to in section 153.03 of the Revised Code.

(4) "Drug-free safety program" or "DFSP" means the bureau's loss prevention and safety program to prevent and reduce the risk of workplace accidents and injuries attributed to the use and abuse of alcohol and other drugs, including prescription, over-the-counter, and illegal drugs.

(5) "PEO" has the same meaning as defined in paragraph (A)(1) of rule 4123-17-15 of the Administrative Code.

(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 dangerous to the physical well-being of or jeopardize the security of the employee, co-workers, customers or the general public 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 and recommend or perform hiring or firing procedures.

(8) "Superintendent" means the superintendent of the division of safety and hygiene or the superintendent's designee.

(B) Eligibility requirements.

(1) To receive benefits under this rule, the employer must meet the following criteria as of the application deadline:

(a) The employer must be current with respect to all payments due the bureau, as defined in paragraph (A)(3) of rule 4123-17-14 of the Administrative Code ;

(b) The employer must not have cumulative lapses in workers' compensation coverage in excess of forty days within the twelve months preceding the application deadline ;

(c) The employer must be in an active, reinstated, or debtor-in-possession policy status.

(2) The following employers shall not be eligible for benefits under this rule:

(a) State agencies ;

(b) Self-insuring employers providing compensation and benefits pursuant to section 4123.35 of the Revised Code.

(3) A PEO shall not be eligible to receive benefits under this rule unless the PEO and each of the PEO's client employers meet all eligibility and program requirements.

(4) An employer determined to be ineligible for participation in the DFSP based on the bureau's review of the employer's submitted application may appeal such determination to the adjudicating committee pursuant to section 4123.291 of the Revised Code.

(5) An employer that is found to be ineligible for participation in the DFSP may reapply for a subsequent program year.

(C) Basic DFSP level.

To implement a basic DFSP, an employer shall make annual application to the bureau by the application deadline and implement the program elements set forth in paragraphs (C)(1) to (C)(6) of this rule. The requirements and timeframes for completion of each element shall be determined by the superintendent.

(1) Safety - The DFSP shall include, but is not limited to the following:

(a) Completing and submitting the bureau's online safety assessment;

(b) Ensuring each supervisor completes accident-analysis training; and

(c) Utilizing online accident-analysis reporting on the bureau's website.

(2) Policy - Employers are required to put in place a written DFSP policy.

(3) Employee education - The DFSP shall include annual education for all employees.

(4) Supervisor skill-building training - The DFSP shall include annual training for all supervisors in support of enforcing the employer's written DFSP policy and procedures.

(5) Drug and alcohol testing - The DFSP program shall include alcohol and other drug testing which conforms to the federal testing model promulgated by the United States department of health and human services. The employer shall implement and pay for testing required by DFSP participation, but is not required to pay for re-testing requested by an employee and follow-up testing. Testing shall occur as specified by the bureau including, but not limited to the following:

(a) Pre-employment and new-hire drug testing;

(b) Post-accident alcohol and other drug testing;

(c) Reasonable suspicion alcohol and other drug testing; and

(d) Return-to-duty and follow-up alcohol and other drug testing.

(6) Employee assistance - The DFSP shall include an employee assistance plan.

(D) Advanced DSFP level.

To implement an advanced DFSP, an employer shall make annual application to the bureau by the application deadline and implement the program elements set forth in paragraphs (D)(1) and (D)(2) of this rule. The requirements and timeframes for completion of each element shall be determined by the superintendent.

(1) The employer shall meet all of the requirements of a basic DFSP as provided in paragraph (C) of this rule.

(2) The employer shall do all of the following:

(a) Ensure that its written DFSP policy clearly reflects how random drug testing will be implemented and how additional employee assistance will be provided ;

(b) Ensure conducting fifteen per cent or higher random drug testing of the employer's workforce each program year ;

(c) Pre-establish a relationship for, and pay the costs of, a substance assessment of an employee who tests positive, comes forward voluntarily to indicate he or she has a substance problem, or is referred by a supervisor ;

(d) Timely submit a safety action plan based on the results of the completed safety assessment which outlines specific safety process improvements the employer intends to implement during the remainder of the program year ;

(e) Commit to not terminate the employment of an employee who tests positive for the first time, who comes forward voluntarily to indicate he or she has a substance problem, or who is referred by a supervisor for an assessment.

(E) Comparable program.

(1) Self-insuring employers and state-fund employers not participating in the DFSP shall submit an application for approval of a comparable program.

(2) Prior to providing labor services or on-site supervision of such labor services under a public improvement project as defined in division (A)(9) of section 153.03 of the Revised Code, employers participating in the comparable program shall:

(a) Develop, implement, and provide to all employees a written substance use policy the written policy required by division (B)(2)(a) of section of 153.03 of the Revised Code ;

(b) Complete all employee education required by division (B)(2)(d) of section of 153.03 of the Revised Code ; and

(c) Complete all supervisor training required by division (B)(2)(e) of section of 153.03 of the Revised Code.

(F) Progress reporting and renewal requirements.

(1) In order to qualify for renewal, an employer shall have implemented all requirements of its basic or advanced level DFSP by the implementation date specified by the bureau.

(2) The employer shall submit an annual report detailing program implementation and reporting annual statistics on a form provided by the bureau. The requirements and timeframes for completion of the annual report shall be determined by the superintendent.

(a) If the employer is applying for renewal in the DFSP, the annual report shall be deemed the employer's annual application, and the employer shall identify which DFSP level is requested for the following program year ;

(b) The employer shall provide any follow-up documentation required by the bureau and shall maintain on-site statistics as required by the bureau ;

(c) The report required by this section and any other information submitted by the employer in meeting DFSP requirements shall be considered part of the annual statement submitted to the bureau as required by section 4123.26 of the Revised Code. The bureau shall hold such information as confidential pursuant to section 4123.27 of the Revised Code.

(3) In conjunction with the annual report required under paragraph (F)(2) of this rule, a PEO participating in the DFSP must submit a client employer list.

(a) The list shall include all client employers with whom the PEO had an agreement as of thirty days prior to the filing deadline for the annual report ;

(b) The list shall include each client employer's name, address, federal tax identification number, bureau of workers' compensation risk number; and the amount of payroll, listed by manual class code, reported by the PEO on behalf of each client employer ;

(c) If the bureau determines the PEO has manipulated the client list for purposes of obtaining benefits under this rule, the PEO shall not be eligible to receive such benefits ;

(d) The bureau shall hold the list required under this section as confidential pursuant to section 4125.05 of the Revised Code.

(G) The bureau may remove an employer from participation in the DFSP for failure to fully implement a DFSP in compliance with the approved program level requirements. The bureau shall send written notice of cancellation to the employer . An employer removed from the DFSP under this section may reapply for the DFSP for the next program year. The bureau may deny the application based on circumstances of previous participation.

(H) An employer completing program requirements may be eligible for a bonus equal to the amount identified in the appendix to rule 4123-17-75 of the Administrative Code times the employer's pure premium costs during the program year. Completion of program requirements shall be determined by the superintendent.

(I) Participation in this program under this rule is voluntary. Nothing contained in this rule shall affect, modify, or amend any collective bargaining agreement or alter the rights or obligations of an employer, an employee, a client employer, PEO, or shared employee under applicable federal or state law. Provisions of a collective bargaining agreement that prevent implementation of program criteria will preclude employer participation in the program.

(J) Pursuant to section 4121.37 of the Revised Code, the administrator may establish a grant program to offset, in whole or in part, costs incurred by employers that implement a basic or advanced DSFP and meet such grant program's eligibility requirements.

Effective: 07/01/2014
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, 05/21/09, 7/1/10, 11/15/10, 7/1/12, 1/1/13

4123-17-58.1 [Rescinded]Drug-free workplace (DFWP) discount program for small employers.

Effective: 07/01/2010
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, 5/21/09

4123-17-59 Fifteen thousand dollar medical-only program.

(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 and the employer agrees to pay bills within thirty days of receipt of the bill, 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 five 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 one year 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 for claims with a date of injury prior to June 30, 2009. Providers must accept the bureau fee schedule as payment in full for claims with a date of injury on or after June 30, 2009. A certified health care provider shall extend to an employer who participates in this program the same rates for services rendered to an employee of that employer as the provider bills the administrator for the same type of medical claim processed by the bureau and shall not charge, assess, or otherwise attempt to collect from an employee any amount for covered services or supplies that is in excess of that rate. 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: 07/01/2014
Promulgated Under: 111.15
Statutory Authority: 4121.12 , 4121.121
Rule Amplifies: 4123.29
Prior Effective Dates: 3/1/95, 7/22/06, 9/10/07, 7/1/10

4123-17-60 Annuity factors.

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 appendixes A, B, C, D, and E to this rule. The basis and interest factor of each annuity factor table is indicated on the appendix.

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Effective: 12/31/2010
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, 12/31/07, 12/31/09

4123-17-61 Criteria for group experience rating.

(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 manual classifications 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 , as 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.

(a) The bureau may allow an employer to move to a more homogeneous group , 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 identified in the appendices to rule 4123-17-74 of the Administrative Code, when the employer:

(i) Is an employer without a full year of recorded premium;

(ii) Is reclassified as a result of an audit; or

(iii) Fully or partially combines with another employer.

(b) An individual employer member of a continuing group who initially satisfied the homogeneous requirement shall not be disqualified from participation in the continuing group for failure to continue to satisfy such requirement.

(3) The group of employers must consist of at least one hundred individual 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 policy year for which the application for group rating is made.

(4) As of the deadline for application for group rating set forth in the appendices to rule 4123-17-74 of the Administrative Code, each employer seeking to enroll in a group for workers' compensation coverage must meet the following requirements:

(a) The employer must be current with respect to all payments due the bureau, as defined in paragraph (A)(3) of rule 4123-17-14 of the Administrative Code;

(b) 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; and

(c) The employer cannot have cumulative lapses in workers' compensation coverage in excess of forty days within the prior twelve months.

(5) Cancellations, transfers, and combinations.

(a) An employer whose coverage status becomes cancelled or combined during the rating year may not continue to participate in group rating beyond the payroll period including the effective date of the cancellation or combination, unless the date of cancellation or combination is determined to be January first or July first, in which case the employer shall be removed from group as of the actual date of cancellation or combination.

(b) An employer that obtains initial coverage after the group rating application deadline as defined in the appendices to rule 4123-17-74 of the Administrative Code and for which a transfer of experience is indicated under rule 4123-17-02 of the Administrative Code 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.

Effective: 09/27/2013
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, 6/22/09, 11/1/11

4123-17-61.1 Sponsorship certification requirements.

(A) The following certification requirements shall apply to all sponsoring organizations that seek to make application for either the group rating plan , as provided for in rule 4123-17-61 of the Administrative Code, or the group retrospective rating plan 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 each 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) . Once 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, as well as groups in the current group experience rating program under this rule beginning the next rating year.

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 offer a discount to either a private or public employer either seeking to participate in a group-experience rating plan or that exceeds the combined result of the lowest experience modifier and its associated break-even factor for the future policy year until those factors are approved by the bureau's board of directors. Those parties also may not provide marketing material that is either false or unattainable relating to the process of forming groups under the group-retrospective rating plan for a future 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 when combining the lowest experience modifier and its associated break-even factors 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 an upcoming policy year.

(i) For sponsors that filed group rosters with the bureau for the policy year, "capacity" is defined as prohibiting a sponsoring association from exceeding the total number of employers in their current or most recent groups, adding new employers for groups they may form in the policy year of the sanction, and affiliating with any other group sponsors for the policy year of the sanction.

(ii) For sponsors that have not filed group rosters with the bureau for the current policy year, "capacity" means they will not be able to form groups and cannot affiliate with other group sponsors for the upcoming 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 upcoming 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 each year regarding sanctions rendered under this paragraph and corrective actions taken by the bureau with respect to this rule.

Effective: 07/01/2010
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, 8/10/09, 10/5/09

4123-17-62 Application for group experience rating.

(A) Sponsoring organization requirements.

(1) A sponsoring organization shall make annual application for group experience rating by submitting an employer roster for group rating plan (AC-25) for each group it sponsors. Each AC-25 shall:

(a) Be signed each year by an officer of the sponsoring organization to which the members of the group belong;

(b) Identify each individual employer to be included in the group policy year for which the group application is made; and

(c) Identify whether, in the previous policy year, each employer was:

(i) Enrolled in the same group,

(ii) Not enrolled in the same group, but enrolled in a different group sponsored by the sponsoring organization, or

(iii) Not enrolled in the same group, and not enrolled in a different group sponsored by the sponsoring organization.

(2) In the manner specified by the bureau, the sponsoring organization shall annually identify all employers that were enrolled in the group in the previous policy year but are not enrolled in the group for the policy year for which the current application is made, and specify whether the employer is enrolled in another group of the same sponsoring organization.

(3) The bureau may request from individual employers or the sponsoring organization any additional information necessary for the bureau to rule upon the application for group experience rating. Failure or refusal of the sponsoring organization to provide the requested information in the manner requested by the bureau shall be sufficient grounds for the bureau to reject the application and refuse the group's participation in group experience rating.

(4) A sponsoring organization's application for group experience rating is effective for a single policy year. Continuation of a group for subsequent years requires timely filing of an application on a yearly basis and meeting eligibility requirements set forth in rule 4123-17-61 of the Administrative Code.

(B) Employer requirements.

An employer electing to participate in group experience rating must file an application for group rating (AC-26) with the sponsoring organization of the group in which the employer seeks to participate. If the sponsoring organization elects to include the employer in its group, the sponsoring organization must file the AC-26 form electronically with the bureau by the group experience rating application deadline set forth in the appendices to rule 4123-17-74 of the Administrative Code.

(1) An employer's AC-26 shall remain in effect for all subsequent policy years when the employer remains in the same group or another group sponsored by the same sponsoring organization.

(2) The employer must file an AC-26 if the employer applies for group experience rating with a different sponsoring organization or was not group-experience rated in the previous rating year.

(3) When an employer files a new AC-26 or multiple AC-26 forms during the application period, the latest-filed AC-26 shall establish the employer's intentions for group experience 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 experience rating or is rejected for failure to meet group eligibility requirements; or

(d) The employer fails to meet individual eligibility requirements set forth in paragraph (B) of rule 4123-17-61 of the Administrative Code.

(C) For private employers, the sponsoring organization shall file applications on or before the date identified in appendix A to rule 4123-17-74 of the Administrative Code. For public employers, the sponsoring organization shall file applications on or before the date identified in appendix B to rule 4123-17-74 of the Administrative Code.

(1) Except as provided in rule 4123-17-69 of the Administrative Code, a sponsoring organization may not add an employer to a group after the application deadline. A sponsoring organization will be permitted to correct a clerical error that results in an employer being omitted from a group roster if:

(a) The sponsoring organization has made an error in reporting the name or risk number of the employer on the sponsoring organization's AC-25; or

(b) The sponsoring organization included the employer on the sponsoring organization's AC-25, but failed to file the employer's AC-26 with the bureau prior to the application deadline. The sponsoring organization must provide sufficient documentation, as determined by the bureau, that the employer timely filed its AC-26 with the sponsoring organization.

(2) A sponsoring organization that has applied for group experience rating may not voluntarily terminate the application during the bureau's evaluation period.

(3) Any changes to the sponsoring organization's original application must be filed in a manner prescribed by the bureau prior to the application deadline. Any rescissions made must be completed in writing, signed by an officer of the sponsoring organization to which the members of the group belong. Any changes received by the bureau after the application deadline will not be honored. The latest application form or rescission received by the bureau prior to the application deadline will be used to determine the premium obligation for the group.

(D) 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.

(1) 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 set forth in appendix A to rule 4123-17-74 of the Administrative Code.

(2) 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 set forth in appendix B to rule 4123-17-74 of the Administrative Code.

(3) If an employer notifies the bureau that a sponsoring organization has not complied with this paragraph 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.

(E) When the bureau determines that individual employers in a proposed group do not meet the eligibility requirements set forth in rule 4123-17-61 of the Administrative Code, the bureau will notify the individual employers and the sponsoring organization of its determination. The sponsoring organization may continue in its application for group coverage without the disqualified employers, but the group must meet minimum requirements of rule 4123-17-61 of the Administrative Code.

(F) A sponsoring organization may request that an employer be removed from its group for a gross misrepresentation made on the employer's 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, and is limited to any of the following:

(a) The sponsoring organization discovers that the employer applicant for group experience rating has recently merged with one or more entities without disclosing such merger on the employer's application for membership in the group, and such merger adversely affects the experience modification (EM), as defined in rule 4123-17-03 of the Administrative Code, of the group.

(b) The sponsoring organization discovers that the employer applicant for group experience 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 EM of the group.

(2) Requests for removal of an employer pursuant to this paragraph must be submitted within thirty days of the bureau's notification to the sponsoring organization that a rate adjustment has occurred. The sponsoring organization must notify the employer of its request to remove the employer from the group for gross misrepresentation.

(3) The sponsoring organization must provide sufficient documentation, as determined by the bureau, to support its request to remove an employer from a group.

(4) The employer shall be removed from the group only with the bureau's approval.

Replaces: 4123-17-62

Effective: 09/27/2013
Promulgated Under: 111.15
Statutory Authority: 4121.12 , 4121.121 , 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; 8/10/09, 9/12/09, 11/1/11

4123-17-63 Eligibility for group experience rating-size criteria.

(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.

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

4123-17-64 Group experience rate calculations.

(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

4123-17-64.1 [Rescinded]Private employer group experience break even factor.

Effective: 07/01/2012
Promulgated Under: 111.15
Statutory Authority: 4121.121 , 4121.13 , 4121.30
Rule Amplifies: 4123.29
Prior Effective Dates: 7/1/09, 7/1/10, 7/1/11

4123-17-64.2 Public employer taxing district group rating break even factor.

The administrator will apply an adjustment factor to all group rated employer experience modifiers (EM) as indicated in appendix A to this rule.

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Effective: 01/01/2013
Promulgated Under: 111.15
Statutory Authority: 4121.121 , 4121.13 , 4121.30
Rule Amplifies: 4123.29
Prior Effective Dates: 1/1/10, 1/1/11, 1/1/12

4123-17-65 Experience retention for group experience rate calculation purposes.

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.

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

4123-17-66 Termination and transfers for group experience rating.

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 fund 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 be included in the experience of the group for experience rating purposes. Upon returning to the state insurance fund the employer shall provide the bureau with a payroll, a list of all claims incurred while the employer was self-insured and all payments made with respect to those claims, and any additional information required by the bureau to calculate the employer's experience.

(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.

Effective: 04/22/2013
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; 10/11/94; 11/8/99; 7/1/01

4123-17-67 Representation for group experience rating.

(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 group representative must be made by submission of a completed form AC-24, and any change or termination of the authorized group representative can be made only by a subsequent submission of form AC-24. Only an officer of the group may sign an AC-24.

(C) Notwithstanding the provisions of paragraph (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.

Effective: 11/15/2010
Promulgated Under: 111.15
Statutory Authority: 4121.12 , 4121.121
Rule Amplifies: 4123.29
Prior Effective Dates: 10/2/90, 10/11/94, 11/8/99

4123-17-68 Group experience and group retrospective safety program requirements.

(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 primary or affiliated sponsoring organization of a group experience or group retrospective plan shall document its program to improve accident prevention and claims handling for the members in the group with the group application, and, for an existing group reapplying for group coverage annually, shall document the effectiveness of prior programs and any proposed improvements to these programs. This analysis shall include identification of the most common injuries among group members and strategies aimed at increasing awareness and prevention of these injuries.

(1) A bureau division of safety and hygiene loss prevention representative shall review the sponsor's safety requirements annual report within sixty days of receipt. The safety and hygiene representative shall contact the primary or affiliated group sponsor or its authorized representative to assist in further developing appropriate safety strategies if there are deficiencies in the report. All primary and affiliated sponsoring organizations shall be required to sponsor a minimum of eight hours of safety training during the rating year for members of their group. Training shall be hosted by the sponsor or the sponsor's third party administrator. Training should be designed in increments of at least two hours. Training should be industry specific where possible. Webinars and online training hosted by the sponsor will qualify to fulfill this requirement. The sponsor must document the number of employers in attendance at safety training with a goal of at least fifty per cent membership attendance. If the same agenda is offered repeatedly in different regional sites, hour to hour credit will be granted. A bureau representative may attend training to ensure the requirement is being met.

(2) If an employer that participates in group rating or group retrospective rating plan sustains a claim within the "green year" period , the employer shall complete either of the following:

(a) The bureau's online accident analysis form and the bureau's associated online safety class, or

(b) Two hours of safety training approved by the bureau. Such training can be offered by the sponsoring organization, the sponsoring organization's third party administrator, or the bureau.

The sponsor will notify members of this requirement and maintain recordkeeping to track completion of this requirement. The sponsor will submit to the bureau a list of members completing the training required by this rule. The bureau shall reserve the right to request additional information from the sponsor to ensure compliance.

(3) The bureau safety and hygiene division shall make a recommendation to the bureau employer programs unit on whether the group's safety requirements annual report is acceptable for the following policy year. A copy of the recommendations and findings of the safety and hygiene division shall be communicated to the sponsoring organization or its authorized representative at the same time. The employer programs unit shall consider this recommendation in making its decision whether to approve the group rating application and at the time of sponsor recertification.

(4) The bureau safety and hygiene division shall evaluate the sponsor's safety requirements annual report at the sponsoring organization level and not at the individual member level. The bureau safety and hygiene safety representative may conduct member visits to confirm the sponsoring organization requirements are met.

(5) If the bureau's employer programs unit does not approve a group for group rating based upon the sponsor's safety activities, the sponsoring organization may request a hearing before the adjudicating committee pursuant to rule 4123-14-06 of the Administrative Code.

(6) Primary and affiliated sponsoring organizations shall publish in the first quarter of the rating year, for the knowledge of the members in their group, a safety accountability letter outlining the group rating safety requirements and responsibilities of all associated parties.

(D) The sponsoring organization shall provide information regarding safety resources to members in their group. Communication and education strategies of the sponsoring organization may include use of the following strategies: web sites, webinars, claims review and analysis, newsletters, seminars, professional consultants, videos, personal contact, brochures, booklets, manuals, identifying key personnel and training in safety management for the sponsoring organization staff and/or its members. The bureau safety and hygiene division representative will be added to all member distribution lists to monitor safety education activity.

(E) 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 assist the group with its development of safety strategies.

(3) Safety and hygiene and the sponsoring organization may sponsor joint seminars.

(4) The safety and hygiene representative shall provide a list of resources and expertise within each region upon request.

(5) The sponsoring organization shall promote bureau safety and hygiene services to its members.

(6) Safety and hygiene may provide training sessions and written safety and health materials.

(7) Bureau safety and hygiene division consultation services may be utilized by member companies for customized safety management assistance.

(8) Safety and hygiene and the sponsoring organization may develop joint programs in response to member needs.

(F) 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: 01/01/2013
Promulgated Under: 111.15
Statutory Authority: 4121.12 , 4121.121
Rule Amplifies: 4123.29
Prior Effective Dates: 7/1/96, 7/1/01, 3/9/09, 7/1/10, 7/1/12

4123-17-69 Grow Ohio incentive program.

(A) For purposes of this rule:

(1) "Continuing eligibility evaluation date" means each June first and December first of the program eligibility period.

(2) "Initial application for rating" means the employer's initial application for rating provided for in paragraph (A) of rule 4123-17-13 of the Administrative Code.

(3) "Initial payroll period" means the payroll period in which a new employer's coverage becomes effective, or the payroll period determined by the bureau to be the new employer's initial payroll period for purposes of the grow Ohio incentive program based on criteria set forth in policy established by the bureau.

(4) "Initial rating year" means the rating year including the date on which the new employer's coverage becomes effective.

(5) "New employer" means an employer creating one or more jobs in the state of Ohio on or after July 1, 2011, and for which any of the following is true:

(a) The employer is a new business entity made amenable to Ohio workers' compensation laws by such job creation; or

(b) The employer is an out of state employer that has not had prior operations in Ohio and has not had prior workers' compensation insurance coverage in Ohio.

(6) "Program eligibility period" means:

(a) For a private employer the new employer's initial payroll period and the four consecutive payroll periods thereafter.

(b) For a public employer, the new employer's initial payroll period and the two consecutive payroll periods thereafter.

(B) Grow Ohio incentive program.

(1) To encourage the development of jobs in Ohio, the administrator shall provide all new employers eligible for the grow Ohio incentive program a twenty-five per cent premium discount, as described in paragraph (B)(2) of this rule, or, if elected by the new employer, a waiver to allow application for the group experience rating program, as set forth in paragraph (B)(3) of this rule.

(2) Twenty-five per cent premium discount.

(a) The administrator shall apply the twenty-five per cent premium discount to the new employer's total blended premium on the employer's payroll report;

(b) The discount shall be applied to the premiums assessed on the new employer for the duration of the program eligibility period, unless:

(i) The employer elects, either through the one-time exception set forth in paragraph (B)(3) of this rule or through the annual application cycle for group rating established in rule 4123-17-62 of the Administrative Code, to participate in the group experience rating program.

A new employer that exits the group experience rating program during the program eligibility period and is not otherwise prohibited from participation in the grow Ohio incentive program by this rule shall be eligible to receive the discount for any remaining payroll periods in the program eligibility period.

(ii) The employer elects to participate in a program that is incompatible with the grow Ohio incentive program under rule 4123-17-74 of the Administrative Code.

(iii) The employer is ineligible for continued participation in the program under paragraph (D) of this rule.

(c) The discount shall not:

(i) Be creditable against the premium security deposit required by rule 4123-17-16 of the Administrative Code;

(ii) Apply to any prior-to-coverage premiums;

(iii) Apply to any findings of premium deficiencies resulting from a premium audit pursuant to rule 4123-17-17 of the Administrative Code, if the bureau determines that the employer has misrepresented payroll or failed to submit payroll for any period;

(iv) Apply to the minimum administrative charge set forth in rule 4123-17-26 of the Administrative Code.

(3) Application for group experience rating.

(a) If a new employer elects to apply for the group experience rating program under this rule, the administrator shall waive the deadlines set forth in rule 4123-17-62 of the Administrative Code and allow the new employer to apply for the group experience rating program. A new employer participating in the group experience rating program must file an AC-26 form for the group with the sponsoring organization.

(b) A sponsoring organization shall not permit a new employer to participate in a group unless the new employer meets group homogeneity requirements set forth in rule 4123-17-61 of the Administrative Code. A sponsoring organization shall notify the bureau of the addition of the new employer to a group within thirty days of the date the bureau assigns a risk number to the new employer. The sponsoring organization shall electronically submit to the bureau the new employer's AC-26 with a statement identifying the group in which the new employer is being placed for the employer's initial rating year.

For employers making the election under paragraph (B)(3)(a) of this rule between the twenty-ninth day before the applicable group experience rating deadline set forth in rule 4123-17-74 of the Administrative Code and the last day of the initial rating year, inclusive, the sponsoring organization shall also, within thirty days of the date the bureau assigns a risk number to the new employer, electronically submit to the bureau the new employer's AC-26 with a statement identifying the group in which the new employer is being placed for the rating year immediately following the employer's initial rating year.

(c) The new employer's participation in the group experience rating program in rating years subsequent to the rating year or rating years for which the new employer was admitted to a group under the administrator's waiver of the group rating deadline under this section is subject to all requirements for participation in the group experience rating program set forth in rules 4123-17-61 to 4123-17-68 of the Administrative Code.

(C) Initial eligibility for the grow Ohio incentive program.

(1) The following employers shall not be eligible to participate in the grow Ohio incentive program:

(a) A professional employer organization as defined in rule 4123-17-15 of the Administrative Code.

(b) A self-insuring employer providing compensation and benefits pursuant to section 4123.35 of the Revised Code, or a state fund employer who has previously provided compensation and benefits pursuant to section 4123.35 of the Revised Code.

(c) A public employer that is not one of the following:

(i) A community school established under Chapter 3314. of the Revised Code;

(ii) A public-private partnership securing workers' compensation insurance under section 4123.03 of the Revised Code.

(d) An employer for which a combination or transfer of experience is indicated under rule 4123-17-02 of the Administrative Code.

(e) An employer that the bureau determines, after reviewing the information submitted with the initial application for rating is essentially the same employer, regardless of entity type, for which risk coverage previously had been provided.

(f) An employer that elects to transfer, for the purposes of individual experience rating in Ohio, the individual experience modifier as was applied to that employer's operations in another state pursuant to rule 4123-17-03.1 of the Administrative Code.

(g) An employer that elects to participate in a program that is incompatible with the grow Ohio incentive program under rule 4123-17-74 of the Administrative Code.

(2) An employer determined to be ineligible for the grow Ohio incentive program under paragraph (C)(1)(c), (C)(1)(d), or (C)(1)(e) of this rule based on the bureau's review of the information submitted with the initial application for rating may appeal such determination to the adjudicating committee under section 4123.291 of the Revised Code.

(D) Continuing eligibility for the grow Ohio incentive program.

(1) An employer participating in the grow Ohio incentive program shall be eligible to continue its participation in the program beyond the payroll period immediately subsequent to the employer's initial payroll period only if, as of the last day of such payroll period, the employer has completed the safety program requirements set forth in policy established by the bureau.

(2) An employer participating in the grow Ohio incentive program shall be eligible to continue its participation in the program only if, as of each continuing eligibility evaluation date , the employer holds active workers' compensation coverage according to the following standards:

(a) The employer must be current with respect to all payments due the bureau, as defined in paragraph (A)(3) of rule 4123-17-14 of the Administrative Code.

(b) 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 must not have cumulative lapses in workers' compensation coverage in excess of forty days within the prior twelve months.

(3) An employer shall be immediately disqualified from participation in the grow Ohio incentive program if the employer is found by the bureau to have knowingly misrepresented information on the initial application for rating.

As used in this paragraph, "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 information on the initial application for rating where the employer's determination of how to report was:

(a) Based on the employer's reasonable interpretation of a law, rule, or manual classification;

(b) Based on written advice received from the bureau.

An employer immediately disqualified from participation in the grow Ohio incentive program under this paragraph shall make restitution of all discounts received from participating in the program.

(4) An employer shall be immediately disqualified from participation in the grow Ohio incentive program if the bureau determines the employer has failed to comply with rule 4123-17- 14.1 of the Administrative Code.

An employer immediately disqualified from participation in the grow Ohio incentive program under this paragraph shall make restitution of all discounts received from participating in the program in every payroll period in which the bureau determines the employer failed to comply with rule 4123-17- 14.1 of the Administrative Code.

(5) An employer shall be immediately disqualified from participation in the grow Ohio incentive program if the employer is removed from a group for a gross misrepresentation on its application for the group experience rating program under paragraph (G) of rule 4123-17-62 of the Administrative Code.

Effective: 07/01/2013
Promulgated Under: 111.15
Statutory Authority: 4121.12 , 4121.121
Rule Amplifies: 4123.29
Prior Effective Dates: 1/1/11, 1/1/13, 3/18/13

4123-17-70 [Rescinded]Ten step business plan for safety; certified sponsors.

Effective: 07/01/2012
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, 7/1/09

4123-17-71 One claim program.

(A) Definitions.

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 will enter the employer's experience for the first time .

(2) "Program eligibility period" means the four policy years in which an employer has a significant claim in its experience period.

(3) "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) as defined in rule 4123-17-03 of the Administrative Code.

(B) Application and withdrawal processes.

An employer's participation in the OCP is voluntary. The employer shall apply to participate in the OCP for each year of the program eligibility period. The bureau shall have the final authority to approve an eligible employer for initial and continued participation in the OCP.

(1) 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 that payroll period.

(2) If the employer withdraws from the OCP and has any remaining years in the program eligibility period, 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 initial application for the OCP, the employer must be enrolled in the group experience rating program . At the time of initial application and each renewal application, the employer shall meet the following program requirements:

(1) The employer must be current with respect to all payments due the bureau, as defined in paragraph (A)(3) of rule 4123-17-14 of the Administrative Code.

(2) 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.

(3) The employer shall not have cumulative lapses in workers' compensation coverage in excess of forty days within the prior twelve months .

(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.

(a) As a medical - only claim exits the employer's experience period, the employer may include a new medical - only claim.

(b) The total combined costs of these claims must be below the employer's TLL.

(3) An employer may participate in the OCP on no more than one significant claim every four years from the date of the employer's initial participation in the program.

(4) Once a claim has been designated as the significant claim in initial enrollment for a program eligibility period, an employer is not permitted to change the claim designated as the significant claim.

(5) Settled and subrogated claims will be included in the employer's total claim count.

(6) In the first year of the program eligibility period, the employer shall participate in an industry-specific half-day safety program prescribed by the division of safety and hygiene. In subsequent years of the program eligibility period in which the employer elects to participate in the OCP, the employer shall complete an online training class prescribed by the division of safety and hygiene.

(E) Program benefits.

(1) For employers participating in the OCP prior to July 1, 2012, the bureau will credit an employer that meets all the criteria with a forty per cent discount from the employer's base rate in each year of the program eligibility period.

(2) For employers whose first year of the program eligibility period is the policy year commencing July 1, 2012 or thereafter, the bureau will credit an employer that meets all the criteria with a discount from the employer's base rate as follows:

(a) In the first year of the program eligibility period, twenty per cent;

(b) In the second year of the program eligibility period, fifteen per cent;

(c) In the third year of the program eligibility period, ten per cent;

(d) In the fourth year of the program eligibility period, five per cent.

(3) If an employer participating in OCP would have a lower experience modifier (EM) under the EM cap set forth in rule 4123-17- 03.2 of the Administrative Code, the bureau shall apply the EM cap instead of the OCP discount.

(F) Removal from program.

If the employer fails to meet the eligibility or general requirements of paragraph (C) or (D) of this rule, 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 .

(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: 09/27/2013
Promulgated Under: 111.15
Statutory Authority: 4121.12 , 4121.121
Rule Amplifies: 4123.29 , 4123.34
Prior Effective Dates: 1/1/05, 2/12/09, 1/1/10, 11/15/10, 7/1/12

4123-17-72 Deductible rule.

(A) Definitions.

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 the maximum amount an insured participating in the deductible program must reimburse the bureau for each claim that occurs during the policy year.

(a) "Small deductible" means a deductible less than or equal to ten thousand dollars.

(b) "Large deductible" means a deductible greater than ten thousand dollars.

(3) "Experience rated premium" means the premium obligations of an employer for the policy year excluding DWRF and administrative cost assessments. This may include any experience rated premium related to policy combinations.

(4) "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.

(5) " Base rate" means the rate that employers who are not experience rated pay as a percentage of their payroll.

(6) "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.

(7) "Premium" means money paid (due) from an employer for workers' compensation insurance. It does not include money paid as fees, fines, penalties or deposits.

(8) "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.

(1) An employer shall be eligible to participate in the deductible program only if the employer meets all of the following requirements:

(a) As of each continuing eligibility evaluation date, the employer holds active workers' compensation coverage according to the following standards as of the original application deadline or anniversary date of participation:

(i) The employer must be current with respect to all payments due the bureau, as defined in paragraph (A)(3) of rule 4123-17-14 of the Administrative Code.

(ii) 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.

(iii) If the employer selects a small deductible, the employer may not have cumulative lapses in workers' compensation coverage in excess of forty days within the preceding twelve months. If the employer selects large deductible, the employer may not have cumulative lapses in workers' compensation coverage in excess of fifteen days within the preceding five years.

(b) 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. An employer that is a subsidiary of another corporate entity may use the parent corporate entity's credit score in meeting this requirement if the parent corporate entity meets financial criteria for the deductible program and executes a contract of guaranty with respect to the subsidiary's participation in the program.

(c) The bureau may require an employer to adopt additional risk mitigation measures as a prerequisite for participation in the program. These measures may include, but are not limited to: adoption of an alternative payment plan, providing securitization in the form of a letter of credit or surety bond, and, for employers electing a large deductible, selection of an aggregate stop-loss limit.

(2) The following employers shall not be eligible to participate in the deductible program:

(a) State agencies.

(b) A self-insuring employer providing compensation and benefits pursuant to section 4123.35 of the Revised Code.

(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;

(6) Twenty-five thousand dollars;

(7) Fifty thousand dollars;

(8) One hundred thousand dollars;

(9) Two hundred thousand dollars.

(D) In choosing a small deductible , the employer may not choose a deductible amount that exceeds twenty-five per cent of their experience rated premium obligation 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. In choosing a large deductible , the employer may not choose a deductible amount that exceeds forty per cent of their experience rated premium obligation for the most recent full policy year. For self-insured employers re-entering the state fund system, the bureau will use the paid workers' compensation benefits from the last full policy year in place of experience rated premium.

BWC may estimate a full year's premium should only a partial year be available or if no premium is available in the most recent full policy year.

(E) An employer selecting a large deductible will undergo additional credit analysis and must submit financial information to the bureau during the enrollment period preceding each policy year they elect to participate in the program.

(1) An employer choosing a deductible level of twenty-five thousand dollars or fifty thousand dollars must submit reviewed or audited financials for at least the three most recent fiscal years. The financials must be prepared in accordance with generally accepted accounting principles.

(2) An employer choosing a deductible level of one hundred thousand dollars or two hundred thousand dollars must submit audited financials for at least the three most recent fiscal years. The financials must be prepared in accordance with generally accepted accounting principles.

(F) An employer may request an annual aggregate stop-loss limit option in combination with large deductible levels . If the employer requests the aggregate stop-loss limit option, the bureau shall limit the employer's deductible billings for injuries which occur during the associated policy year to three times the deductible level chosen. However, the bureau may reject the employer's request to participate in the aggregate stop-loss limit option if the bureau determines that, because of the employer's premium or estimated premium size, the employer would receive a discount under this rule that would exceed the employer's maximum aggregate stop-loss liability.

(G) The employer shall file the application provided by the bureau and any other documentation required for enrollment in the deductible program by the applicable application deadline set forth in appendix A or B to rule 4123-17-74 of the Administrative Code.

The bureau shall not permit an employer to enroll in a deductible program outside of the application deadline, except that the bureau will consider an 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.

(H) 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 (G) of this rule.

(I) Except as provided in paragraph (M) of this rule, 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.

(J) 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. For small deductible levels , the amount to be included in the employer's experience for a policy year shall be any claims costs for injuries incurred in that policy year less any deductible billed to the employer under this rule. For large deductible levels , the bureau shall include the entire claims cost for injuries incurred in a policy year in the employer's experience for that 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 other monies owed the bureau 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.

(K) The bureau will apply the premium reduction calculation under the deductible program directly to the 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. The bureau will calculate the reduction in accordance with the appendices of 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's hazard groupings 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 and the associated experience premium 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.

(L) 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 (G)(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 (H) 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.

(M) The bureau may remove an employer participating in the deductible program from the program with thirty days written notice to the employer for any of the following reasons:

(1) The employer participates in any plan or program that is not compatible with the deductible program under rule 4123-17-74 of the Administrative Code.

(2) The bureau certifies a balance due from the employer to the attorney general .

(3) 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) The employer engages in misrepresentation or fraud in conjunction with the deductible program application process.

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Effective: 01/01/2013
Promulgated Under: 111.15
Statutory Authority: 4121.12 , 4121.121 , 4121.30
Rule Amplifies: 4123.29
Prior Effective Dates: 3/9/09, 7/1/09, 3/11/10, 7/1/10, 11/15/10, 6/10/11, 11/1/11, 7/1/12

4123-17-73 Group retrospective rating program.

(A) Definitions.

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" means the total premium paid by or on behalf of an employer for a given policy year, excluding the assessments for the disabled workers' relief fund and the administrative cost fund. In determining standard premium, total premium paid will not be reduced by any rebates or dividends issued pursuant to rule 4123-17-10 of the Administrative Code.

(12) "Application deadline" means the application deadline for group retrospective rating as set forth in appendices A and B to rule 4123-17-74 of the Administrative Code.

(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 A 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 an employer without a full year of recorded premium;

(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 standard premium in excess of one million dollars, as determined by the administrator based upon the last full policy year for which premium information is available.

(a) For 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) As of the application deadline, the employer must be current with respect to all payments due the bureau, as defined in paragraph (A)(3) of rule 4123-17-14 of the Administrative Code.

(b) As of the application deadline 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. An employer who has been included on a group experience rating roster for the upcoming policy year may not elect to participate in group retrospective rating after the deadline for group experience rating set forth in rule 4123-17-74 of the Administrative Code.

(4) An employer must be homogeneous with the industry group of the retro group as defined in paragraph (C)(2) of this rule.

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.

(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) 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 in the sixty days prior to the application deadline, 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 participation. 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) 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.

(L) 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.

(M) 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.

(N) 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.

(O) 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.

(P) 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.

(Q) 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 set forth in appendix A to this rule.

(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 as defined in appendix C to this rule.

(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.

(R) 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 or the sixty days preceding the application deadline for the upcoming policy year, wherein the predecessor was a participant in or applicant for 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.

Successor: enrolled in same 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 the same group retro plan, the successor shall be responsible for any and all existing or future liabilities 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. If the predecessor had at any time participated in a different 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.

(6) Successor: cancels coverage and was enrolled in group retro program.

Predecessor: no predecessor.

If the successor cancels coverage and there is no predecessor, the premium and losses of the canceling employer will remain with the retro group for future retrospective premium calculations. The resulting refund or assessment will be collected from the remaining members of the retro group.

Group retro sponsors and authorized representatives have the right to represent the interest of the canceled employer on behalf of the group with regard to claims which occurred during the year or years the employer was active in a retro group sponsored by the organization.

(7) Successor and/or predecessor: open group retro policy years in the evaluation period.

If the successor and predecessor are not currently enrolled in the group retro program, but either or both have open group retro policy years in the evaluation period, 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.

(8) Partial transfer.

If an entity partially succeeds another entity and the predecessor entity has any group retro policy years in the evaluation period, the predecessor entity will retain any rights to assessments or refunds. If the successor is enrolled in the group retro program, payroll reported and claims incurred on or after the date of the partial transfer will be the responsibility of the successor under its group retro plan.

(9) Successor: files a petition for bankruptcy.

Predecessor: no predecessor.

If a current or previously group retro program employer with open retro policy years files a petition for bankruptcy under chapter seven or chapter eleven of the federal bankruptcy law, that employer shall notify the bureau legal division 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 state insurance fund and other related funds.

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Effective: 07/01/2014
Promulgated Under: 111.15
Statutory Authority: 4121.12 , 4121.121
Rule Amplifies: 4123.29 , 4123.34
Prior Effective Dates: 5/21/09, 7/1/09, 9/12/09, 3/22/10, 11/18/10, 11/1/11, 7/1/12

4123-17-74 Deadline dates and compatibility information for employer programs.

This rule defines employer program deadlines, miscellaneous dates, and compatibility between programs. Specifics may be found in the following appendices:

Appendix A: Private employer program deadlines and miscellaneous dates.

Appendix B: Public employer taxing district program deadlines and miscellaneous dates.

Appendix C: Employer program compatibility.

This rule supersedes other rules referencing program deadlines and compatibility.

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Effective: 07/01/2014
Promulgated Under: 111.15
Statutory Authority: 4121.12 , 4121.121
Rule Amplifies: 4123.29 , 4123.34
Prior Effective Dates: 11/15/2010, 7/1/11, 11/1/11, 7/1/12, 4/1/13, 7/1/13

4123-17-75 Destination: excellence discount program.

(A) The following discounts and bonuses comprise the destination: excellence discount program:

(1) The go green discount established in rule 4123-17-14.3 of the Administrative Code;

(2) The lapse-free discount established in rule 4123-17-14.4 of the Administrative Code;

(3) The claim-free discount established in rule 4123-17-18 of the Administrative Code;

(4) The transitional work performance bonus established in rule 4123-17-55 of the Administrative Code;

(5) The safety council participation bonus established in rule 4123-17-56.2 of the Administrative Code;

(6) The safety council performance bonus established in rule 4123-17-56.2 of the Administrative Code; and

(7) The industry-specific safety discount established in rule 4123-17-56.3 of the Administrative Code.

(8) The drug-free safety program discount established in rule 4123-17-58 of the Administrative Code.

(B) The discounts associated with destination: excellence are as set forth in the appendix of this rule. The administrator shall review the level of the discounts associated with the destination: excellence program on an annual basis and make recommendation to the board of directors regarding the appropriate level of discount for each policy year.

(C) Application of discounts

(1) Discounts earned through participation in destination: excellence cannot reduce an employer's premium due below the amount of the minimum administrative charge for the applicable payroll reporting period as set forth in rule 4123-17-26 of the Administrative Code.

(2) Rate adjustments made to an employer's account subsequent to the application of discounts for an employer's participation in the destination: excellence program will not result in recalculation of such discounts.

(3) Bonuses for participation in destination: excellence shall not be issued to employers paying only the minimum administrative charge in the applicable payroll period as set forth in rule 4123-17-26 of the Administrative Code.

(4) Rate adjustments made to an employer's account subsequent to the issuance of bonuses for an employer's participation in the destination: excellence program may result in recalculation of such bonuses.

(D) An employer may voluntarily withdraw from any destination: excellence program by providing written notice to the employer services division of the bureau. Any discounts earned during the policy year in which an employer withdraws from a destination: excellence program must be repaid to the bureau.

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Effective: 07/01/2014
Promulgated Under: 111.15
Statutory Authority: 4121.12 , 4121.121
Rule Amplifies: 4123.29 , 4123.34
Prior Effective Dates: 7/1/12, 1/1/13, 9/27/13, 12/7/13

4123-17-76 Cancellation of workers' compensation coverage.

(A) The administrator of the bureau of workers' compensation may cancel an employer's workers' compensation coverage if all of the following criteria are met:

(1) The employer's policy is in lapsed status;

(2) The employer's policy has an accounts receivable balance of less than two hundred dollars;

(3) The employer has failed to submit a payroll report in accordance with rule 4123-17-14 of the Administrative Code, for two consecutive payroll periods; and

(4) The employer's policy has no allowed claims filed against it within the past two years.

(B) The effective date of cancellation shall be the last date of the most recent completed payroll period.

(C) The administrator, for good cause shown, may retroactively cancel an employer's workers' compensation coverage. For purposes of this rule, "good cause" shall have the same meaning as in paragraph (B) of rule 4123-14-03 of the Administrative Code.

Effective: 08/10/2014
Promulgated Under: 111.15
Statutory Authority: 4121.12 , 4121.121
Rule Amplifies: 4123.29