Chapter 4123-19 | General Procedures for State Insurance Fund; Self-Insuring Employers

Rule 4123-19-01 | Definitions.

• Effective: January 1, 2023
• Promulgated Under: 119.03

(A) "Benefits" means medical, surgical, nursing, and hospital attention and services and medicines, and funeral expenses as provided in sections 4123.52, 4123.55 to 4123.62, and 4123.64 to 4123.67 of the Revised Code.

(B) "State insurance fund employer" are hereby defined as those employers who pay their full premium into the state insurance fund.

(C) "Self-insuring employers" are hereby defined as those employers who demonstrate sufficient financial ability to carry their own insurance; who do not desire to insure the payment thereof, except as provided in division (B) of section 4123.82 of the Revised Code; who secure authority from the administrator to pay compensation and benefits directly; who pay into the state insurance fund an assessment as established by a rule of the bureau adopted in accordance with section 111.15 of the Revised Code; who pay to the bureau a contribution to the self-insuring employers' guaranty fund pursuant to section 4123.351 of the Revised Code; and who provide an additional security, where required by the bureau, in the amount or form that may be specified by the bureau.

(D) "Self-insurance" is a privilege granted or denied by the administrator. Once granted the privilege of self-insurance, the employer determines the first level of a claim and must have employees with a working knowledge of current Ohio workers' compensation law and all rules and regulations of the bureau and the industrial commission. A self-insuring employer may, without any prior order from the industrial commission or the bureau, grant or refuse to grant any claim made under the Ohio Workers' Compensation Act. In granting a claim or awarding payment of compensation or benefits, the employer may provide to its employees compensation or benefits that are greater than those required by law. The employer may not pay compensation or benefits less than that which is required by law.

Last updated January 1, 2023 at 9:15 AM

Supplemental Information

Authorized By: 4121.12, 4121.121, 4121.30, 4123.05
Amplifies: 4123.01, 4123.30, 4123.35
Five Year Review Date: 12/1/2027
Prior Effective Dates: 5/9/1990, 11/19/1993, 8/1/2019

Rule 4123-19-03 | Where an employer desires to secure the privilege to pay compensation and benefits directly.

• Effective: April 1, 2024
• Promulgated Under: 119.03

(A) All employers granted the privilege to pay compensation and benefits directly shall demonstrate sufficient financial strength and administrative ability to assure that all obligations under section 4123.35 of the Revised Code will be met promptly. The administrator of workers' compensation shall deny the privilege to pay compensation and benefits directly, where the employer is unable to demonstrate its ability to promptly meet all the obligations under the rules of the industrial commission and the bureau and section 4123.35 of the Revised Code. The administrator of workers' compensation shall consider, but shall not be limited to the factors in divisions (B)(1) and (B)(2) of section 4123.35 of the Revised Code where they are applicable in determining the employer's ability to meet all obligations under section 4123.35 of the Revised Code.

The administrator of workers' compensation shall review all financial records, documents, and data necessary to provide a full financial disclosure of the employer, including but not limited to, the balance sheets and a profit and loss history for the current year and the previous four years. The administrator of workers' compensation shall consider whether the employer has demonstrated the financial ability to pay any and all claims obligations. Unless an applicant obtains waiver under paragraph (D) of rule 4123-19-03.1 of the Administrative Code, financial records submitted to the bureau must be audited by a certified public accountant, in accordance with generally accepted accounting principles, and shall include the certified public accountant's audit opinion.

(1) The administrator of workers' compensation may waive certain requirements of divisions (B)(1) and (B)(2) of section 4123.35 of the Revised Code pursuant to rule 4123-19-03.1 of the Administrative Code.

(2) The administrator of workers' compensation shall not grant the status of self-insuring employer to the state, except that the administrator may grant the status of self-insuring employer to a state institution of higher education, including its hospitals.

(B) The employer shall secure from the bureau proper application form(s) for completion. The completed application shall be filed with the bureau at least ninety days prior to the effective date of the employer's requested status as a self-insuring employer. The administrator of workers' compensation may require that the application be accompanied by an application fee as established by bureau resolution to cover the cost of processing the application in accordance with section 4123.35 of the Revised Code. The application shall not be deemed complete until all required information is attached thereto. Prior to presentation to the administrator of workers' compensation, applicable items listed in divisions (B)(1) and (B)(2) of section 4123.35 of the Revised Code shall be made available to the bureau and shall be reviewed by the bureau.

(C) The bureau shall accept only application forms which provide answers to all questions asked and furnish all required information.

(D) Return of the completed forms required by this rule and any additional information required by the bureau to process the employer's application should be submitted at least ninety days prior to the effective date of the employer's requested status as a self-insuring employer.

(1) If the administrator determines to grant the privilege of self-insurance, the bureau shall issue a finding of fact, which has been prepared by the bureau and signed by the administrator of workers' compensation, subject to all conditions outlined in paragraph (M) of this rule.

(2) If the administrator of workers' compensation determines not to grant the privilege of self-insurance, the bureau shall so notify the employer, whereupon the employer shall be required to continue to pay its full premium into the state insurance fund.

(E) All employers that have secured the privilege to pay compensation and benefits directly, will be required to make contributions as determined by the administrator of workers' compensation to the self-insuring employers' guaranty fund established under section 4123.351 of the Revised Code, and if an additional security is required by the bureau, the amount form of the additional security may be specified by the bureau. If the additional security is in the form of a surety bond, the bond shall be from a company approved by the bureau and authorized to do business in the state of Ohio by the Ohio department of insurance. The surety bond shall be in the form prescribed by the bureau. If the additional security is in the form of a letter of credit, the letter of credit must be provided by a federally insured financial institution. The penalized amount of such additional security is to be fixed by the administrator of workers' compensation.

(F) The surety bond or additional security furnished by the employer shall be for an amount and period as established by the bureau and may be periodically reviewed and reevaluated by the bureau. The surety bond or additional security shall provide on its face that the surety shall be responsible for the payment of all claims where the cause of action, as determined by the date of injury or date of occupational disease, arose during the liability of the surety bond or additional security. The liability under the surety bond or additional security and the rights and obligations of the surety shall be limited to reimbursement for the amounts paid from the surplus accounts of the state insurance fund by reason of the default of the self-insuring employer in accordance with division (B) of section 4123.82 of the Revised Code; however, in the event of such self-insuring employer's default, the bureau shall first seek reimbursement from the surety bond or additional security, which shall be first liable and exhausted, before payment is made from the self-insuring employers' guaranty fund established under section 4123.351 of the Revised Code. Upon default of the self-insuring employer, it shall be the responsibility of the administrator of workers' compensation to represent the interests of the state insurance fund and the self-insuring employers' guaranty fund. The administrator of workers' compensation, on behalf of the self-insuring employers' guaranty fund, has the rights of reimbursement and subrogation and shall collect from a defaulting self-insuring employer, or other liable persons, all amounts the bureau has paid or reasonably expects to pay from the self-insuring employers' guaranty fund on account of the defaulting self-insuring employer.

(G) The security herein required to be given by the employer shall be given to the state of Ohio, for the benefit of the disabled employees or the dependents of deceased employees of the employer filing the same, and shall be conditioned for the payment by the employer of such compensation to disabled employees or the dependents of deceased employees of such employer, and the furnishing to them of benefits equal to or greater than is provided by the Ohio workers' compensation law and for the full compliance with the rules, regulations, and procedures of the industrial commission and the bureau.

(H) If another or parent corporation or entity owns fifty per cent or more of the stock of an employer, the bureau may, in its discretion, require the employer to furnish a contract of guaranty executed by the ultimate domestic parent corporation or entity. The bureau shall require an alternative form of security if it does not require a contract of guaranty executed by the ultimate domestic parent corporation or entity.

(I) Employees having one or more years of experience as a workers' compensation administrator for a self-insuring employer in Ohio shall be deemed sufficiently competent and knowledgeable to administer a program of self-insurance. A self-insuring employer that employs a workers' compensation administrator who have less than one year of experience as a workers' compensation administrator in Ohio shall not have its status as a self-insuring employer affected pending notification by the bureau as to whether mandatory attendance of the employer's workers' compensation administrator at a bureau training program is required. If the bureau determines that the employer's workers' compensation administrator is not able to administer a self-insuring program, the bureau may direct mandatory attendance of the employer's workers' compensation administrator at a bureau training program until such time as the bureau determines that the employer's workers' compensation administrator is sufficiently competent and knowledgeable to run such a workers' compensation program. The cost of the bureau's training of the workers' compensation administrator(s) under this rule will be borne by the self-insuring employer or self-insuring employer applicant. By accepting the privilege of self-insurance, an employer acknowledges that the ultimate responsibility for the administration of workers' compensation claims, in accordance with the law and rules of the bureau and the industrial commission, rests with that employer. The self-insuring employer's records and compliance with the bureau and the industrial commission rules shall be subject to periodic audit by the bureau.

A self-insuring employer or applicant shall designate one of its Ohio employees who is knowledgeable and experienced with the requirements of the Ohio Workers' Compensation Act and rules and regulations therein, as Ohio administrator of its self-insuring program. This rule is not intended to prevent the hiring of an attorney or representative to assist the employer in the handling and processing of workers' compensation claims. The requirement for an Ohio administrator may be waived at the discretion of the bureau. The name and telephone number of the Ohio administrator, or non-Ohio administrator where the Ohio requisite has been waived, shall be posted by the employer in a prominent place at all the employer's locations. The Ohio administrator's duties shall include, but not be limited to:

(1) Acting as liaison between the employer, the bureau, and the industrial commission, and providing information to the agency upon request;

(2) Providing assistance to claimants in the filing of claims and applications for benefits;

(3) Providing information to claimants regarding the processing of claims and the compensation and benefits to which claimants may be entitled, including eligibility and filing requirements;

(4) Providing the various forms to be used in seeking compensation or benefits;

(5) Accepting or rejecting claims for benefits; and

(6) Approving the payment of compensation and benefits to, or on behalf of, claimants, pursuant to paragraph (L) of this rule.

(J) Employers that are granted the privilege of paying compensation and benefits directly, in accordance with these rules and regulations, shall:

(1) File with the bureau via the bureau's website a report of paid compensation annually on or before the last day of February each year;

(2) Maintain a record of all injuries and occupational diseases resulting in more than seven days of temporary total disability or death occurring to its employees and report the same to the bureau upon forms to be furnished by the bureau; and

(3) Observe all the rules, regulations, and procedures of the industrial commission and the bureau with reference to determining the amount of compensation and benefits due to the disabled employee or the dependents of deceased employees, and payment of the same.

(K) If a self-insuring employer fails to timely file its annual report of paid compensation, the bureau may estimate the amount of paid compensation and assess the employer based on this estimate pursuant to rule 4123-17-32 of the Administrative Code. If the employer subsequently provides the bureau with actual paid compensation figures, the bureau shall adjust the paid compensation and any assessment accordingly. A self-insuring employer that is no longer a self-insuring employer in Ohio and has failed to timely file a report of paid compensation shall be subject to this rule.

(L) Minimal level of performance as a criterion for granting and maintaining the privilege to pay compensation and benefits directly.

(1) The employer must be able to furnish or make arrangements for reasonable medical services during all working hours. A written explanation of what arrangements have been made or will be made to provide medical treatment shall be supplied with the application for self-insurance.

For an employer desiring to be first granted the privilege of self-insured status, the employer shall provide to the bureau for the bureau's approval the employer's plan for the following:

(a) Criteria for the selective contracting of health care providers;

(b) Plan structure and financial stability for the medical management of claims;

(c) Procedures for the resolution of medical disputes between an employee and the employer, an employee and a provider, or the employer and a provider, prior to an appeal under section 4123.511 of the Revised Code;

(d) Upon the request of the bureau, provide a timely and accurate method of reporting to the administrator of workers' compensation necessary information regarding medical and health care service and supply costs, quality, and utilization; and,

(e) Provide an employee the right to change health care providers.

(2) The employer shall promptly pay the fees of outside medical specialists to whom the industrial commission or the bureau shall refer claimants for examination or where the industrial commission or the bureau refers the claim file for review and opinion by such specialist except as provided by law in cases where the claim was subsequently disallowed. Such fees shall be paid within the time limits provided for payment of medical bills under paragraph (L)(5) of this rule.

(3) Every employer shall keep a record of all injuries and occupational diseases, including contested or denied claims, and shall report all claims with more than seven days of total disability or death, including contested or denied claims, to the bureau and to the employee or the claimant's surviving dependents in accordance with rule 4123-3-03 of the Administrative Code. For all claims reported to the bureau, the employer shall electronically update and report the allowed conditions on the bureau's website within fourteen days of the employer's acceptance of a condition or following the appeal period of the final administrative order if the condition was contested. Claims resulting in seven days or less of total disability shall be reported to the employee.

(4) The employer shall provide to the claimant and upon request, shall file with the bureau or the industrial commission, medical reports relating thereto and received by it from the treating physician and physicians who have seen the claimant in consultation for the allowed injury or occupational disease, or any injury or occupational disease for which a claim has been filed. The claimant shall provide to the employer and, upon request, shall file with the bureau or the industrial commission, medical reports relating thereto and received from the treating physician and physicians who have seen the claimant in consultation for the allowed injury or occupational disease or any injury or occupational disease for which a claim has been filed. The claimant shall honor the employer's request for appropriate written authorization to obtain medical reports to the extent that such reports pertain to the claim.

(5) Within thirty days after receipt of a hospital, medical, nursing, or medication bill duly incurred by the claimant, the employer shall either pay such bill, or if the employer contests any of such matters, shall notify the provider, the employee, and, only upon request, the bureau or industrial commission in writing. Such written notice shall specifically state the reason for nonpayment. The employer's notification to the employee shall indicate that the employee has the right to request a hearing before the industrial commission. If the matter is heard by the industrial commission, the employer shall pay compensation and benefits due and payable under an order as provided by section 4123.511 of the Revised Code. Payments issued more than fourteen days from receipt of an order allowing compensation will be considered non-compliant with this requirement. If the employer allows a claim for benefits and compensation without a hearing, the employer shall pay such benefits and compensation no later than twenty-one days from acquiring knowledge of the claim or the claimant's filing of the C-84 form, whichever is later.

(6) The employer shall acknowledge a written request for a change of physicians within seven days of receipt of the request that includes the name of the physician and proposed treatment. The employer may advise the injured worker of an impractical situation concerning the injured worker's choice of physician, such as the provider is retired, is deceased, is no longer licensed, is under license suspension, is incarcerated, has affirmatively refused to treat the claimant or serve as the physician of record, is not a physician as defined in paragraph (P) of rule 4123-6-01 of the Administrative Code, or is otherwise unavailable to treat the claimant. The employer cannot impede the claimant's freedom to choose a treating physician for the allowed conditions in the claim.

(7) The employer shall approve or deny a written request for treatment within ten days of the receipt of the request. The employer cannot deny a treatment request, or contest payment of any bill for the treatment, if the employer did not respond within ten days of receipt of the treatment request. The employer cannot deny a treatment request, or contest payment of any bill for the treatment, if the employer did not respond within ten days of receipt of the treatment request.

(8) The employer shall make its records and facilities available to the employees of the bureau at all reasonable times during regular business hours. A public employer shall make the reports required by section 4123.353 of the Revised Code available for inspection by the administrator of workers' compensation and any other person at all reasonable times during regular business hours.

(9) The employer shall pay all compensation as required by the workers' compensation laws of the state of Ohio. By becoming self-insured, the employer agrees to abide by the rules and regulations of the bureau and the industrial commission and further agrees to pay compensation and benefits subject to the provisions of these rules. The employer shall proceed to make payment of compensation or benefits without any previous order from the bureau or the industrial commission and shall start such payments as required under the Workers' Compensation Act unless the employer contests the claim. The employer may allow for compensation payments to be available through debit card, electronic funds transfer, or direct deposit with the claimant's authorization.

(10) The employer may notify the bureau's medical section and the claimant at least sixty days prior to the completion of the payment of two hundred weeks of compensation for temporary total disability with the request that the claimant be scheduled for examination by the medical section. Payment of temporary total disability compensation after two hundred weeks shall continue uninterrupted until further order of the industrial commission up to the maximum required by law, unless the claimant has returned to work, or the treating physician has made a written statement that the claimant is capable of returning to his former position of employment or has reached maximum medical improvement or that the disability has become permanent, or, after hearing, an order is issued approving the termination of temporary total disability compensation.

(11) Upon written request by the claimant or claimant's representative, the employer shall make available for review all the employer's records pertaining to the claim. Such review is to be made at a reasonable time, not to exceed three business days, and place. The claimant, upon written request, shall provide the employer or its representative with an appropriate written authorization to obtain records pertaining to the claim.

(12) Upon written request by the claimant or claimant's representative, the employer shall provide copies of the employer's records pertaining to the claim within three business days. Extensions may be granted to the employer, but not to exceed fourteen days from the date of the request, with agreement of the claimant or claimant's representative. An employer may provide copies in electronic form, or through electronic access to the records, with agreement of the requesting party. Except as provided for in this rule, an employer may not assess a fee or charge the claimant or the claimant's representative for the cost of providing a copy of the employer's records pertaining to the claim. Where the employer has previously provided a copy of the record or records pertaining to the claim to the claimant or the claimant's representative, the employer may charge a fee for the copies. The employer's fee shall be based upon the actual cost of furnishing such copies, not to exceed twenty-five cents per page.

(13) The employer shall inform a claimant, and the bureau, in writing, within thirty days from the filing of the claim with the employer, as to what conditions the employer has recognized as related to the injury or occupational disease and what conditions, if any, the employer has denied. The same timeframe applies to medical only claims.

(14) The employer shall post notices of its self-insuring status indicating the location for the filing of a claim and the job title and department of the employees designated by the employer to be the person or persons responsible for the processing of workers' compensation claims.

(15) A public employer, except for a board of county commissioners described in division (G) of section 4123.01 of the Revised Code, a board of a county hospital, or a publicly owned utility, who is granted the status of self-insuring employer pursuant to section 4123.35 of the Revised Code shall comply with the section 4123.353 of the Revised Code.

(16) A self-insuring employer is prohibited from entering into a professional employer organization agreement as defined in section 4125.01 of the Revised Code, or an alternate employer organization agreement as defined in section 4133.01 of the Revised Code, as a client employer.

(M) If a state insurance fund employer or a succeeding employer, as described in rule 4123-17-02 of the Administrative Code, applies for the privilege of paying compensation and benefits directly, by transferring from the state insurance fund to self-insurance, the actuary of the bureau shall determine the amount of the liability of such employer to the bureau for its proportionate share of any deficit in the fund. To determine an employer's liability under this rule, the actuary of the bureau shall develop a set of factors to be applied to the pure premium paid by an employer on payroll for a seven-year period, as described in this paragraph. The factors shall be based on the full past experience of the industrial commission and the bureau as reflected in the most recent calendar year end audited combined financial statement of the industrial commission and the bureau, and shall also accommodate any projected change in the financial condition of the fund for the current calendar year, or any additional period for which an audited combined financial statement is unavailable. The factors shall be revised annually effective July first based on the most recent calendar year audited combined financial statement and the projected change in the financial condition of the fund in the current calendar year or any additional period for which an audited combined financial statement is unavailable. The annually revised factors shall be adopted by rule 4123-17-40 of the Administrative Code. Factors effective July first of each year shall apply to all applications for self-insurance filed on or after July first of that year through June thirtieth of the following year. The revised factors shall be applied to the pure premium paid by the employer on payroll for the seven calendar accident years ending December thirty-first of the year preceding the year in which the factors are adopted under rule 4123-17-40 of the Administrative Code. In the event the audited combined financial statement of the industrial commission and the bureau reveals that no deficit exists, or in the event the application of the factors adopted by rule 4123-17-40 of the Administrative Code yields a negative number, the employer will incur no liability under this paragraph, but will not receive any refund for prior premiums paid except for those matters specifically addressed in paragraph (M)(2) of this rule. As used in this rule, "pure premium paid" means premiums actually paid under a base rating plan or an experience rating plan and minimum premium paid under a retrospective rating plan. It does not include premiums billed for actual claims costs, including reserves at the end of ten years, under a retrospective rating plan. Obligations under a retrospective rating plan remain the responsibility of the employer regardless of the employer's status. The same principles shall apply to cases of a merger by a self-insuring employer and a state insurance fund employer under the self-insuring employer's status. In addition, the following provisions shall apply:

(1) Within thirty days of the receipt from the employer of the necessary forms and of a separate statement of assets and liabilities, the bureau will forward to the employer a letter stating the amount of liability (if any) due the state insurance fund as outlined in this rule and a copy of the computation of such liability (if any).

(2) Within thirty days of the date of mailing of the letter by the bureau as outlined in paragraph (M)(1) of this rule, the employer shall reply by a letter, acknowledging that the employer agrees with the amount of liability specified in the letter and that there are no protests or claims hearings pending which could affect the amount of the liability. If any such matters are pending and would affect the liability, they must be detailed and set forth in the letter from the employer. This letter must also acknowledge that any protest letters, applications for disability relief as provided in section 4123.343 of the Revised Code, or other requests affecting the employer's state fund insurance experience filed subsequent to the date of this letter shall be considered invalid for both rebate of premium on state insurance fund experience and the calculation of liability cited in this rule. This letter must also specify the suggested effective date of the transfer to self-insurance which the employer requests, subject to paragraph (B) of this rule which requires that the effective date must be at least ninety days after the date the application forms are received by the bureau. Failure to comply with the requirements set forth herein shall terminate further consideration of the application.

(3) Subsequent to the approval of the employer's self-insured status and the effective date thereof by the administrator of workers' compensation, the bureau shall issue a settlement sheet statement containing the adjustment required above and billing for an advance deposit as required by other rules of the bureau. The employer shall pay the amounts required by this paragraph, pay the contribution to the self-insuring employers' guaranty fund under section 4123.351 of the Revised Code, submit a performance surety bond or additional security, if required by the bureau, and estimated final payroll report as a state insurance fund employer, all within thirty days of the date of the mailing of the self-insured certificate.

(4) The final adjustments of all premiums due the state insurance fund for the final payroll reports and final bureau audit, if any, as well as the pending protests letters, applications for disability relief as provided in section 4123.343 of the Revised Code, or other requests affecting the risk's state insurance fund experience as specified in paragraph (M)(2) of this rule, shall all be settled and paid within six months from the date of transfer from the state insurance fund to self-insured status. Employer's records must be made available promptly for final audit which must also be completed within six months from the date of the transfer from the state insurance fund to self-insurance.

(N) If there is any change involving additions, mergers, deletions of entities, or ownership changes of a self-insuring employer, which would materially affect the administration of the employer's self-insuring employer program or the number of employees included in such program, the employer shall notify the bureau's self-insured department within thirty days after the change occurs. Based upon the information provided or additional information requested by the bureau, the bureau will determine the effect of the change on the employer's self-insuring employer status, the adequacy of the employer's contribution to the self-insuring employers' guaranty fund, and the need for additional security.

(O) If a public employer granted the privilege of self-insurance elects to provide coverage for volunteers and probationers performing services for the political subdivision, the employer shall include such volunteers and probationers as employees to be covered under the self-insurance policy. A public employer's coverage of a work-relief employee under Chapter 4127. of the Revised Code shall be included in the public employer's self-insurance policy.

(P) If a self-insuring employer or applicant elects to secure excess loss coverage which undertakes to indemnify a self-insuring employer against all or part of such employer's loss as provided for in division (B) of section 4123.82 of the Revised Code, that self-insuring employer or applicant shall:

(1) Name the bureau as a beneficiary to the excess loss coverage contract in the event the bureau takes over administration and payment of the claims of the self-insuring employer or applicant;

(2) Provide a complete copy of the excess loss coverage contract, including the declaration page, to the bureau's self-insured department; and

(3) In the event of default by the self-insuring employer or applicant, the excess loss coverage must indemnify the bureau for all compensation, benefits, and disabled workers' relief fund costs incurred on claims covered by the excess loss coverage contract.

(Q) If a self-insuring employer or applicant elects to secure excess loss coverage which undertakes to indemnify a self-insuring employer against all or part of such employer's loss as provided for in division (B) of section 4123.82 of the Revised Code, this election cannot be used to satisfy any security requirements of self-insurance as provided in sections 4123.35 and 4123.351 of the Revised Code.

Last updated April 3, 2024 at 1:28 PM

Supplemental Information

Authorized By: 4121.12, 4121.121, 4121.30, 4123.05
Amplifies: 4123.35, 4123.58
Five Year Review Date: 12/1/2027
Prior Effective Dates: 2/17/1981, 11/17/1986 (Emer.), 1/10/1987, 10/30/2006, 8/15/2007, 4/28/2014, 8/18/2017, 1/1/2022

Rule 4123-19-05 | Where a self-insuring employer becomes a state insurance fund employer.

• Effective: January 1, 2023
• Promulgated Under: 119.03

(A) This rule applies to a self-insuring employer that transfers to the state insurance fund.

(B) Where a self-insuring employer becomes a state insurance fund employer, the employer shall be rated at the appropriate experience modifier to the employer's basic premium rate. A self-insuring employer, or a subsidiary, or a part thereof, that returns to the state insurance fund as a state insurance fund employer shall provide the administrator with compensation and benefits costs for itself and for any subsidiaries by claim, and payroll by manual classification and year, and any other information as the administrator may require. The self-insuring employer shall submit this information by the date set by the administrator, and in a format determined by the administrator. This information must be submitted each year following the employer's return to the state insurance fund, for as many years as required by the administrator to develop the employer's state fund experience modification factor. The employer may be required to submit additional information to the administrator if the administrator determines that additional information is needed to develop the employer's state fund experience modification factor. The administrator shall use this information to develop a state fund experience modification factor based in whole or in part on the employer's self-insured experience.

(C) Failure to provide the required information will result in assignment of an experience modification factor of two and ineligibility for employer programs for the self-insuring employer that returns to the state insurance fund, until such time as the required information is provided or a state insurance fund experience modification factor is developed based fully on the employer's state insurance fund experience. This provision does not apply to a client employer of a self-insured alternate employer organization or self-insured professional employer organization.

(D) The adjustment of the self-insurance premium of such employer shall be computed on an earned premium basis as of the date of transfer from self-insurance to the state insurance fund, which adjustment shall be controlled by the rules controlling the ordinary premium adjustment.

(E) A self-insuring employer that transfers to the state insurance fund shall continue to administer self-insured claims for dates of injury, disease, or death during the period of self-insurance, and the employer shall be responsible to continue to pay compensation and benefits directly. Further, the employer shall remain obligated to pay to the bureau the self-insuring employer assessment calculated on the basis of the paid compensation for such claims attributable to the individual self-insuring employer according to the provisions of division (J) of section 4123.35 of the Revised Code and the provisions of rule 4123-17-32 of the Administrative Code. An employer that has had its self-insurance status revoked, not renewed, or cancelled, and the employer is not required to enter the state insurance fund, must comply with the provisions of rule 4123-17-32 of the Administrative Code.

Last updated January 3, 2023 at 9:51 AM

Supplemental Information

Authorized By: 4121.12, 4121.121, 4121.30, 4123.05
Amplifies: 4123.35
Five Year Review Date: 12/1/2027
Prior Effective Dates: 8/22/1986 (Emer.), 5/9/1990, 8/1/2019

Rule 4123-19-06 | Procedures for revocation of self-insuring status.

• Effective: January 1, 2023
• Promulgated Under: 119.03

(A) The bureau may direct that a public hearing be held on the question of revocation of a self-insuring employer's privilege of self-insurance if the employer that has elected with the approval of the bureau to pay compensation and benefits, directly thereafter fails in any one of the following:

(1) Continued failure to file medical reports requested by the bureau or industrial commission or to submit reports to the injured worker required under law or rule;

(2) Continued failure to pay compensation or benefits in accordance with any law or bureau or industrial commission rules in a timely manner;

(3) Failure to provide reasonable medical facilities;

(4) Continued failure to pay all costs of administration including fees of medical specialists to whom the industrial commission or the bureau refers claimants for physical examinations or refers claim files for review and opinion, or failure to pay claimant's travel expenses within thirty days as required by law or rule;

(5) Continued failure to keep a record of all injuries and occupational diseases resulting in more than seven days of temporary total disability or death or involving seven days or less of lost time where it appears that there will be permanent partial disability compensable under division (A) of section 4123.57 of the Revised Code, or where the employer denies the claim, and to report the same to the bureau, and to furnish a copy of such report to the employee it concerns or to his surviving dependents;

(6) Continued failure to pay compensation within two weeks or benefits including failure to respond to a written request for authorization to change physicians within seven days, failure to approve or deny a written request for treatment within ten days, failure to pay hospital, medical, nursing, or medication bills duly incurred by the claimant within the period of thirty days after receipt of a fee bill, unless the employer contests any of such matters, in which event the employer shall promptly notify the employee in writing, as well as the provider, for requests to change physicians or for treatment requests of for fee bill, and, only upon request, the bureau or the industrial commission of such contest, specifically stating the reason for contesting such matter, and notifying the employee of the right to request a hearing before the industrial commission;

(7) Failure to make its records and facilities available to employees of the bureau;

(8) Repeated failure to permit a claimant, dependents of a deceased worker, or their representatives, to review all of the employer's medical records pertaining to the claim at all reasonable times and places within three business days of receiving a request;

(9) Repeated failure to timely provide a claimant, dependents of a deceased worker, or their representatives, copies of claim file records in accordance with paragraph (L)(12) of rule 4123-19-03 of the Administrative Code;

(10) Repeated failure to inform a claimant or dependents of a deceased worker and the bureau, in writing, as to what conditions it has recognized as related to his injury or occupational disease and what, if any, conditions it denies;

(11) Harassing, dismissing, or disciplining employees who have made complaints to the bureau;

(12) Failure to pay contributions to the self-insuring employers' guaranty fund as set forth in section 4123.351 of the Revised Code; or,

(13) Repeated failure to comply strictly with any rule, regulation or order prescribed by the industrial commission or the bureau.

(B) Should the bureau have reason to believe that the self-insuring employer has failed to comply with any of the matters listed in paragraph (A) of this rule involving the employer's financial strength or administrative ability to meet its obligations as a self-insuring employer, the bureau shall refer the matter for a public hearing on the question of revocation of the employer's privilege of self-insurance. Such public hearing shall be conducted before the self-insured review panel in accordance with the provisions of rule 4123-19-14 of the Administrative Code for issues involving the financial strength or the administrative ability of the employer to operate a self-insured workers' compensation program. The public hearing shall be conducted before the self-insuring employers evaluation board in accordance with the provisions of rule 4123-19-13 of the Administrative Code for issues involving unresolved complaints by injured workers or allegations of misconduct by the self-insuring employer.

(C) The employer and its representative shall be notified in writing that such a public hearing will be held and shall be furnished with copies of any complaint or report from the employees of the bureau. For matters to be heard before the self-insured review panel, the bureau shall mail a notice of hearing to the employer and its representatives, setting forth the date, time, and place of the hearing not less than twenty one days before such hearing. For matters to be heard before the self-insuring employers evaluation board, the bureau shall mail a notice of the hearing to the claimant and the claimant's representative if the issue is a complaint. The notice shall be mailed not less than fourteen days before such hearing.

(D) At the hearing the testimony given shall be taken by a court reporter and copies of the transcript of such testimony shall be furnished to the self-insuring employer, the claimant, their representatives, the administrator, and the members of the self-insured review panel or the self-insuring employers evaluation board.

(1) Should the self-insured review panel find that the self-insuring employer has materially violated any part of this rule or is incapable of operating a self-insuring program, or refuses to conform to the rules and regulations of the industrial commission and the bureau, then the administrator will forthwith issue a revocation of authority to pay compensation and benefits directly.

(2) Should the self-insuring employers evaluation board recommend to the administrator that an employer's privilege of self-insurance be revoked, the administrator shall promptly and fully implement such recommendation without further hearing.

(3) An employer that has been revoked pursuant to paragraph (D)(1) or (D)(2) of this rule shall be required to pay forthwith its eight months' advance estimated premium into the state insurance fund.

(E) The bureau may, at its discretion and after proper hearing, revoke the self-insuring status of a unit of a parent company when the evidence presented at the hearing clearly shows that the unit is operating at a different location from the parent company, and its actions causing the revocation were not directed nor authorized by the parent company.

Last updated January 3, 2023 at 9:51 AM

Supplemental Information

Authorized By: 4121.12, 4121.121, 4121.30, 4123.05
Amplifies: 4123.35, 4123.352
Five Year Review Date: 12/1/2027
Prior Effective Dates: 12/17/2001, 10/30/2006, 1/1/2022

Rule 4123-19-08 | Renewal of self-insuring risks.

• Effective: January 1, 2023
• Promulgated Under: 119.03

(A) The privilege of an employer to pay compensation and benefits directly, must be renewed annually. Beginning with the effective date of this rule, prior to renewal of the employer's privilege of self-insurance, the bureau shall re-evaluate the employer's financial strength and administrative ability as described in rule 4123-19-03 of the Administrative Code. The bureau will consider past performance of the self-insuring employer as an additional factor in determining whether to renew the privilege of self-insurance. Waivers granted for good cause by the administrator pursuant to paragraph (H) of rule 4123-19-03 of the Administrative Code will continue in effect indefinitely unless there is a significant change, in the opinion of the bureau.

(B) Self-insuring employers desiring to continue paying compensation and benefits directly shall secure from the bureau a copy of the appropriate form of application which shall be completed and returned in the manner prescribed to the bureau. The employer may also be required to include a reporting of the amount of payments made and the amount of reserves established for the aforementioned claims as sufficient to cover future liabilities. The properly completed renewal forms shall be signed by the Ohio self-insuring program administrator who has been designated by the employer to the bureau or an officer of the company and filed ninety days prior to the renewal date.

(C) The application forms and the employer's financial statement shall be reviewed by the bureau. In order to renew its status as a self-insuring employer, the employer shall establish the following to the bureau's satisfaction that:

(1) The employer has fulfilled the minimal level of performance standards that an employer is required to meet before being granted permission to pay compensation and benefits directly as provided in paragraph (L) of rule 4123-19-03 of the Administrative Code; .

(2) The employer has substantially resolved all outstanding complaints filed with the bureau;

(3) The employer has achieved a satisfactory rating in its most recent audit report; and

(4) If the employer elects to secure excess loss coverage which undertakes to indemnify a self-insuring employer against all or part of such employer's loss as provided for in division (B) of section 4123.82 of the Revised Code, the employer is required to comply with paragraph (P) of rule 4123-19-03 of the Administrative Code. If the employer has previously submitted a complete copy of the excess loss coverage contract, and there have been no material changes to the excess loss coverage, the employer may submit the declaration page of the excess loss coverage with the renewal application. The bureau may require additional information concerning excess loss coverage upon review of the declaration page.

(D) Upon compliance with these requirements, the administrator may approve the renewal application. If the application is granted, the bureau will notify the applicant within thirty days prior to the renewal date. In this notification, the bureau shall specify the contribution to the self-insuring employers' guaranty fund and the amount and form of the additional security, if required.

(E) If the employer, upon receipt of notification of additional security as provided in paragraph (D) of this rule, promptly provides the bureau with the security in the amount and form specified by the bureau, the bureau thereafter will issue the employer a revised findings of fact and certificate which will be sent to the employer by the bureau.

(F) In the event the bureau finds that the minimum criteria set forth in the rules have not been met, the bureau shall give written notice to the applicant that the privilege to pay compensation and benefits directly, will not be renewed. The notice shall give the employer two weeks to exercise the right to a public hearing before the self-insured review panel, in accordance with the provisions of rule 4123-19-14 of the Administrative Code. If no hearing is requested or if the self-insured review panel or, on appeal, the administrator upholds the non-renewal, the applicant shall forthwith be required to:

(1) Pay its full premium into the state insurance fund for the intervening period from the date of the expiration of the last renewal date to the date of the final order of non-renewal; and

(2) Obtain a binder for state fund coverage as of the expiration date of its last renewal.

(G) If an employer's privilege to pay compensation and benefits directly is not renewed, the employer must secure coverage through the state insurance fund for any ongoing operations. If such employer does not secure state fund coverage, that employer shall be deemed an amenable but noncomplying employer pursuant to sections 4123.01 to 4123.99 of the Revised Code.

(H) If, for any reason, the administrator cannot approve the employer's application for renewal prior to the expiration of its present authorization, an extension may be granted until such time as the final disposition of the application for renewal can be made.

Last updated January 3, 2023 at 9:52 AM

Supplemental Information

Authorized By: 4121.12, 4121.121, 4121.30, 4123.05
Amplifies: 4123.32, 4123.35
Five Year Review Date: 12/1/2027
Prior Effective Dates: 7/1/1962, 1/2/1978, 11/26/1979

Rule 4123-19-09 | In regard to complaints filed by employees against self-insuring employers under the provisions of section 4123.35 of the Revised Code.

• Effective: January 1, 2023
• Promulgated Under: 119.03

(A) The bureau shall receive all complaints, regardless of the source, concerning any employer engaged in paying compensation and benefits directly to its employees. The bureau shall transfer to the self-insuring employers evaluation board only those complaints which are not resolved. An employer shall respond in writing to a complaint within fourteen days of receipt thereof, and the employer's response shall be made a part of the complaint file. Failure of an employer to timely respond in writing to the complaint within fourteen days may result in a valid complaint determination.

(B) The administrator shall investigate and process all complaints against a self-insuring employer through the bureau's self-insured department. The self-insured department may address any violations by a self-insuring employer that are discovered during the course of the investigation of a complaint, regardless if the violation is initially reported. However, the bureau may dismiss a complaint based upon the employer's action or lack of action with respect to events that occurred more than two years prior to the filing of the complaint, unless the facts could not have been reasonably known to the claimant.

(C) The bureau shall maintain a file of all complaints that relate to the employer, together with any information filed by the employer as to such complaints. A copy of all complaints shall become a part of the self-insuring employer's file and shall be available at the time of renewal consideration. The bureau shall evaluate each complaint and take appropriate action as follows:

(1) If the bureau records for such employee does not contain full information as to the matter which is the subject of the complaint, the bureau may attempt to obtain such information by correspondence with the self-insuring employer, the claimant, and their authorized representatives, if any.

(2) The bureau may also audit the program of the employer in the manner provided in section 4123.35 of the Revised Code.

(D) Following receipt of all necessary information, including but not limited to bureau records, correspondence from the employee and the employer, or an audit by the bureau, the bureau may dismiss the complaint as invalid or find that the complaint has been resolved. Any unresolved complaint against a self-insuring employer shall be referred to the board for further action in accordance with the provisions of rule 4123-19-13 of the Administrative Code. If the bureau determines that a complaint is invalid or resolved and decides not to present the complaint to the board, the claimant may request that the complaint be presented to the administrator or the board for further consideration. If the bureau determines that a complaint is valid, a self-insuring employer may request that the complaint be presented to the administrator or the board for further consideration.

(E) All requests by claimants or self-insuring employers in accordance with paragraph (D) of this rule shall be filed within fourteen days of receipt of the bureau's decision. Failure to timely file the request shall be grounds for dismissal of the request, and the bureau's decision shall be final.

(F) Complaints referred to the bureau as provided in this rule shall be retained in the employer's file for a period of four years from the date of resolution.

(G) No employer that elects to pay compensation and benefits directly shall harass, dismiss, or otherwise discipline an employee for making a complaint. Upon receipt of information that such harassment, dismissal or other disciplinary action has been taken, the bureau shall assign the matter for hearing pursuant to the provisions of rule 4123-19-13 of the Administrative Code before the members of the board. If the board finds that such employer is guilty of harassing, dismissing or otherwise disciplining the claimant for making the complaint, the board shall levy a reasonable financial penalty under the circumstances as the board deems appropriate, payable by the employer to the surplus fund.

(H) Repeated violations of this rule shall be grounds for revocation of the employer's privilege to pay compensation and benefits, directly.

Last updated January 3, 2023 at 9:52 AM

Supplemental Information

Authorized By: 4121.12, 4121.121, 4121.30, 4123.05
Amplifies: 4123.35, 4123.352
Five Year Review Date: 12/1/2027
Prior Effective Dates: 8/8/2003

Rule 4123-19-10 | In regard to audits by the bureauof workers' compensation.

• Effective: January 1, 2023
• Promulgated Under: 119.03

(A) The bureau shall audit the programs of employers who elect to pay compensation directly in the following situations:

(1) On a random basis;

(2) Whenever the bureau has grounds for believing that an employer is not in full compliance with the rules of the industrial commission or the bureau or the provisions of Chapter 4123. of the Revised Code;

(3) Upon request from the self-insured review panel or the self-insuring employers evaluation board.

(B) Such audits shall include the employer's methods of furnishing benefits; the employer's payment of compensation or benefits to claimants and dependents and whether this is being done in a proper and timely manner; whether the employer has promptly filed all reports required under the rules of the industrial commission and the bureau and the provisions of Chapter 4123. of the Revised Code. Such audits may also be used to evaluate whether the employer is providing medical examinations and evaluations in a timely manner; and whether the employer has harassed, dismissed, or otherwise disciplined employees who have filed complaints against such employer with the bureau.

(C) The bureau shall report its findings on such audits to the employer, the self-insured review panel, or the self-insuring employers evaluation board, where the panel or board had requested the audit, and shall evaluate such findings and take such action as is indicated.

Last updated January 3, 2023 at 9:52 AM

Supplemental Information

Authorized By: 4121.12, 4121.121, 4121.30, 4123.05
Amplifies: 4123.35, 4123.352
Five Year Review Date: 12/1/2027
Prior Effective Dates: 5/9/1990, 12/17/2001, 10/30/2006

Rule 4123-19-11 | Fixing time limits beyond which the failure of a self-insuring employer to provide for the necessary medical examinations and evaluations may not delay a decision on a claim.

• Effective: January 1, 2023
• Promulgated Under: 119.03

(A) When a self-insuring employer has provided or arranged for a necessary medical examination or evaluation, in accordance with paragraph (A) of rule 4121-03-09 of the Administrative Code, the self-insuring employer shall promptly notify the industrial commission of such action.

(B) Failure of a self-insuring employer to provide for or arrange for the scheduling of such necessary medical examinations and evaluations within the period of fifteen days from the notification shall not delay a decision in the claim.

Last updated January 3, 2023 at 9:52 AM

Supplemental Information

Authorized By: : 4121.12, 4121.121, 4121.30, 4123.05
Amplifies: 4123.35
Five Year Review Date: 12/1/2027
Prior Effective Dates: 5/9/1990, 12/17/2001

Rule 4123-19-12 | Grounds for holding public hearings to evaluate the program for self-insuring employers.

• Effective: January 1, 2023
• Promulgated Under: 119.03

The administrator shall hold a public hearing to evaluate the program for self-insuring employers in the following situations:

(A) If there has been a substantial amendment of the statutes relating to self-insuring employers;

(B) If decisions are rendered by the supreme court of Ohio which materially change the interpretation of such statutes or invalidate material portions of the rules of the industrial commission or the bureau; or

(C) If there is substantial evidence that the self-insuring employers are not complying with the laws of the state of Ohio or the rules and procedures of the bureau or the industrial commission.

Last updated January 3, 2023 at 9:53 AM

Supplemental Information

Authorized By: 4121.12, 4121.121, 4121.30, 4123.05
Amplifies: 4123.35
Five Year Review Date: 12/1/2027
Prior Effective Dates: 5/9/1990

Rule 4123-19-13 | Self-insuring employers evaluation board.

• Effective: January 1, 2023
• Promulgated Under: 119.03

(A) Section 4123.352 of the Revised Code establishes a self-insuring employers evaluation board. The board shall consist of three members:

(1) The member of the industrial commission representing the public, serving ex officio, as chairman.

(2) A member of the Ohio self-insurers association appointed by the governor with the advice and consent of the senate.

(3) A member of labor appointed by the governor with the advice and consent of the senate.

(4) Not more than two of the members shall be of the same political party.

(5) For purposes of administration, the board shall be part of the bureau. The bureau shall furnish the necessary office space, staff, and supplies. The board shall meet as the board determines or as requested by the bureau.

(B) All unresolved complaints or allegations of misconduct against a self-insuring employer shall be referred to the board by the bureau.

(1) The board shall investigate and may order the employer to take corrective action in accordance with such schedule as the board fixes.

(2) A board determination need not be made by formal hearing but must be issued in written form and contain the signatures of at least two members.

(3) If after a hearing pursuant to Chapter 119. of the Revised Code and the rules of the industrial commission and the bureau, the board determines an employer has failed to correct deficiencies within the time fixed by the board, or is otherwise violating Chapter 4123. of the Revised Code or the rules of the industrial commission or the bureau, the board shall recommend to the administrator:

(a) Revocation of the employer's privilege of self-insurance;

(b) Probation;

(c) A civil penalty not to exceed ten thousand dollars for each violation of the law or rules, payable into the self-insuring employers' guaranty fund; or

(d) Any other appropriate penalty.

(4) A board recommendation to revoke an employer's privilege of self-insurance must be by unanimous vote.

(5) A penalty other than revocation shall be by majority vote of the board and will be the responsibility of the bureau to monitor for compliance.

(6) The bureau shall promptly and fully implement recommendations from the board for disciplining a self-insuring employer.

Last updated January 3, 2023 at 9:53 AM

Supplemental Information

Authorized By: 4121.12, 4121.121, 4121.30, 4123.05
Amplifies: 4123.35
Five Year Review Date: 12/1/2027
Prior Effective Dates: 8/22/1986 (Emer.), 11/17/1986 (Emer.)

Rule 4123-19-14 | Self-insured review panel.

• Effective: January 1, 2023
• Promulgated Under: 119.03

(A) The administrator may delegate the authority granted to the administrator under Chapters 4121. and 4123. of the Revised Code for determining self-insuring employer matters as may be authorized. For this purpose, the administrator may appoint a self-insured review panel to provide advice to the administrator and the self-insured department of the bureau and provide employers with hearings on matters referred to the panel, or as requested by the employer. The bureau shall refer all unresolved issues involving the financial strength or the administrative ability of the employer to operate a self-insured workers' compensation program to the panel for a hearing.

(B) The panel shall consist of three members appointed by the administrator who have expertise or experience in matters relating to self-insuring employers.

(C) The panel shall hold meetings and hearings to determine matters referred to it by the administrator or the self-insured department for a review. The panel may issue decisions without formal hearing, and may advise the administrator or the self-insured department on issues referred to it. The panel shall afford an employer the opportunity for a formal hearing before the panel upon request.

(D) If an employer requests a hearing before the panel, or the panel determines that a hearing is in the best interests of the employer or the state insurance fund, the panel shall mail a notice of hearing to the employer and its representatives, setting forth the date, time, and place of the hearing. The notice shall be mailed not less than twenty-one days before the date of such hearing. In justifiable cases, an emergency hearing may be arranged with the panel.

(E) The panel shall keep a record of its dockets and proceedings. The panel's decisions shall be reduced to writing and mailed to all interested parties and shall state the evidence upon which the decision was based and the reasons for the panel's actions. The decision of the panel shall be the decision of the administrator. If the employer files a written appeal within fourteen days of the employer's receipt of the panel's decision, at the administrator's discretion, the administrator may reconsider the decision of the panel, and may conduct a formal hearing for such purpose.

(F) The administrator may authorize the panel to consider the following matters:

(1) Granting or denying an application for the privilege to pay compensation and benefits directly;

(2) Non-renewals of self-insured status;

(3) Revocation of self-insuring employer status;

(4) Issues of a self-insuring employer's adequacy of contribution to the self-insuring employers' guaranty fund or need for additional security under section 4123.351 of the Revised Code; and

(5) Any other self-insuring employer matter as authorized and delegated by the administrator under Chapters 4121. and 4123. of the Revised Code.

Last updated January 3, 2023 at 9:53 AM

Supplemental Information

Authorized By: 4121.12, 4121.121, 4121.30, 4123.05
Amplifies: 4123.35, 4123.351, 4123.352
Five Year Review Date: 12/1/2027
Prior Effective Dates: 8/18/2017

Rule 4123-19-15 | Assessment for self-insuring employers' guaranty fund.

• Effective: January 1, 2023
• Promulgated Under: 119.03

(A) The bureau shall require self-insuring employers to pay a contribution to the self-insuring employers' guaranty fund as provided in this rule. The contributions due from self-insuring employers shall be established at rates as low as possible but such as will ensure sufficient monies to guarantee the payment of any claims against the fund. All self-insuring employers who are paying compensation as defined by division (L) of section 4123.35 of the Revised Code, whether active or inactive as a self-insuring employer, are required to pay a contribution to the fund as provided in this rule.

(B) The bureau shall maintain a minimum balance of funds in the fund of one and one-quarter times the prior year's payments from the fund as determined at the end of each calendar year to ensure sufficient monies to guarantee the payment of any claims against the fund. When the bureau determines that there are insufficient funds in the fund and an assessment is necessary to ensure the minimum balance in the fund, the bureau shall assess all self-insuring employers an annual contribution as determined by the administrator to maintain the minimum balance. Annual contributions will not be assessed to all self-insuring employers when the bureau determines that the fund exceeds the minimum amount necessary to guarantee the payment of any claims against the fund, except as provided in paragraph (C) of this rule. The administrator may offer a rebate to self-insuring employers who use the bureau's electronic payment and e-notification offerings.

(C) In addition to any contribution required of all self-insuring employers as provided in paragraph (B) of this rule, the contribution to the self-insuring employers' guaranty fund shall be as follows:

(1) New self-insuring employers, for each of the first three years of self-insurance, shall be assessed six per cent of base rated premium as reported on the most recent full policy year's payroll submitted as a subscriber to the state insurance fund. This assessment shall not apply to entities added to the coverage of an existing self-insuring risk after the first three years of self-insurance of the existing risk. If the applicant has not been a subscriber to the state insurance fund for a full policy year, the applicant shall submit to the administrator payroll amounts, manual classifications, and such other information as the administrator may require to calculate the applicant's base rated premium for the previous policy year, had the applicant been operating in Ohio as a subscriber to the state insurance fund.

(2) A self-insuring employer identified as a high-risk employer by the bureau shall be assessed six per cent of the previous year's paid compensation as reported to the bureau or shall be required to provide appropriate security as defined in rule 4123-19-03 of the Administrative Code.

(3) The assessment shall not be less than five thousand dollars for any twelve-month period of coverage. All annual premiums to the self-insuring employers' guaranty fund are due and shall be collected within forty-five days from the receipt of the bureau's invoice. Self-insuring employers not making timely payments shall be subject to revocation of self-insuring employer status.

(D) As used in this rule, the bureau shall determine whether a self-insuring employer is a high-risk employer based upon a review of the self-insuring employer's certified financial records submitted with the application for self-insuring employer renewal. The bureau's analysis and determination may include, but is not limited to, a review of the self-insuring employer's equity to debt ratio, return on equity, Z-score, Moody's rating, or other nationally recognized financial rating of the long-term stability of a company.

Last updated January 3, 2023 at 9:53 AM

Supplemental Information

Authorized By: 4121.12, 4121.121, 4121.30, 4123.05
Amplifies: 4123.35, 4123.351
Five Year Review Date: 12/1/2027
Prior Effective Dates: 12/17/2001, 3/1/2006

Rule 4123-19-16 | Self-insured construction projects.

• Effective: January 1, 2023
• Promulgated Under: 119.03

(A) As used in this rule:

(1) "Responsible self-insuring employer" or "responsible employer" means the self-insuring employer or the public school employer that enters into a construction contract and applies for permission to self-insure the construction contract. The responsible employer is the entity responsible for the cost of the construction project and generally will be the owner of the project. The responsible employer is the payor under the contract. "Responsible self-insuring employer" or "responsible employer" may include a self-insuring general contractor or construction manager whose principal source of business is the execution of construction projects.

(2) "Public school employer" means an employer defined in division (R) of section 4123.35 of the Revised Code that enters into a construction contract exceeding twenty five million dollars and applies for permission to self-insure the construction contract, whether or not the employer is a self-insuring employer.

(3) "General contractor" means a self-insuring employer that has entered into a contract with an owner to perform more than fifty per cent, by value, of the work on a construction project.

(4) "Construction manager" means a self-insuring employer that has entered into a contract with an owner to provide substantially the same services described in division (A) of section 9.33 of the Revised Code in connection with a construction project. Regardless of any contrary terms of section 9.33 of the Revised Code, for purposes of this rule, the term "construction manager" is not limited to public projects and may apply even if the construction manager also performs construction work on the project.

(5) "Contracting employer" or "subcontracting employer" means any employer, whether state fund or self-insured, that has contracted either directly with a responsible self-insuring employer or with a contracting or subcontracting employer to perform construction services on the construction project. The contracting employer is the payee under the contract, except for where the contracting employer has subcontracted with another contracting employer.

(B) The purpose of this rule is to establish standards by which the administrator of workers' compensation may permit a responsible self-insuring employer to self-insure a construction project entered into by the responsible self-insuring employer pursuant to division (O) of section 4123.35 of the Revised Code.

(C) The administrator of workers' compensation's authority to grant self-insured status for a construction project is permissive. The bureau may establish criteria for granting self-insured status to ensure the financial stability and claims continuity of the workers' compensation program. The burden of proof is on the responsible self-insuring employer to satisfy the requirements of divisions (O), (P), and (Q) of section 4123.35 of the Revised Code, including designation of a safety professional and employment of an ombudsperson for the construction project, and such other requirements as the administrator of workers' compensation may establish by this rule or other policy for granting permission to self-insure a construction project.

(D) A responsible employer filing an application to self-insure a construction project shall be a self-insuring employer under the Ohio workers' compensation statutes, except that a public school employer may be a state fund employer. A public school employer shall be self-insured for the construction project only and shall maintain state fund coverage for its employees.

(E) In order for a responsible employer to be considered for self-insurance under division (O) of section 4123.35 of the Revised Code, the responsible employer must submit an application within ninety days prior to the desired effective date including, but not limited to, the following information:

(1) Dates the construction project is scheduled to begin and end, including the site(s) of the construction project;

(2) The estimated cost of the project;

(3) The contracting and subcontracting employers whose employees are to be self-insured by the responsible employer, including estimated payroll and any changes to the list of contracting and subcontracting employers during the duration of the project that shall be sent to the bureau within two business days;

(4) The provisions of a safety program specifically designed for the project;

(5) A statement as to whether a collective bargaining agreement governing the rights, duties, and obligations of each of the parties to the agreement with respect to the project exists between the responsible self-insuring employer and a labor organization.

(6) The administrator of workers' compensation may require other information as needed to aid in the decision-making process.

(F) If the administrator of workers' compensation approves the application, the administrator of workers' compensation shall mail to the responsible self-insuring employer a certificate granting the privilege to self-insure the construction project. Upon approval, the responsible employer is responsible for the administration and payment for the life of the claim of all claims under Chapters 4121. and 4123. of the Revised Code for the employees of any contracting employers and subcontracting employers covered under the certificate who receive injuries or are killed in the course of and arising out of employment on the project, or who contract an occupational disease in the course of employment on the project.

(G) The responsible employer is entitled to all of the protections provided under Chapters 4121. and 4123. of the Revised Code with respect to the employees of the contracting and subcontracting employers covered under the certificate as if the employees were employees of the responsible employer.

(H) The contracting and subcontracting employers included under the certificate are entitled to the protections provided under Chapters 4121. and 4123. of the Revised Code with respect to the contracting and subcontracting employer's employees who are employed on the construction project which is the subject of the certificate.

(I) The contracting and subcontracting employers included under the certificate shall identify in their payroll records for audit and compliance purposes the employees who are considered the employees of the responsible employer listed in that certificate for purposes of Chapters 4121. and 4123. of the Revised Code, and the amount that those employees earned from employment on the project that is subject to the certificate. The contracting or subcontracting employer shall exclude the payroll for its employees under the construction project from its payroll report, and the administrator of workers' compensation shall not consider the payroll when determining those contracting or subcontracting employers' premiums or assessments required under Chapters 4121. and 4123. of the Revised Code.

(J) The responsible employer shall include in the amount of paid compensation it reports pursuant to division (L) of section 4123.35 of the Revised Code, the amount of paid compensation that the responsible employer paid pursuant to division (O) of section 4123.35 of the Revised Code.

(K) For a public school employer, the bureau may grant the privilege of participating as a self-insuring employer for a construction project under this rule on a one year basis, and shall consider the project for renewal annually pursuant to rule 4123-19-08 of the Administrative Code.

(1) Additional security.

(a) A public school employer shall be required to make contributions as determined by the administrator of workers' compensation to the self-insuring employers' guaranty fund established under section 4123.351 of the Revised Code. In addition, the employer shall provide additional security as required by the bureau in the amount or form that may be specified by the bureau. At a minimum, the additional security shall be one hundred twenty-five per cent of the expected workers' compensation losses of the construction project as determined by the bureau. The security shall be in force on or before the administrator of workers' compensation grants the privilege to self-insure the construction project. In the event the initial calculation of expected losses is shown to be less than the actual losses, additional security shall be provided as required by the bureau.

(b) The public school employer shall assign the additional security required by this rule to the bureau for the benefit of the disabled employees or the dependents of deceased employees of the public school employer for the construction project. In addition, the security shall be applied to disabled workers' relief fund payments to employees of the construction project and administrative expenses of the bureau in the management of such claims of employees of the construction project.

(c) Notwithstanding the authority of the bureau to seek reimbursement from the self insuring employers' guaranty fund, or from surety, excess loss insurance, and any other sources provided by the employer, the legal obligation to pay the costs of injuries, occupational diseases, and deaths incurred under the construction project remains with the public school employer.

(2) Disabled workers relief fund.

A public school employer shall be required to pay the ultimate costs of disabled workers relief fund payments to employees of the construction project, no matter the status of the construction project at the time the disabled workers' relief fund payments are made to the employees of the construction project.

(3) Excess loss insurance.

A public school employer may purchase excess loss insurance subject to the provisions concerning excess loss insurance in rules 4123-19-03 and 4123-19-08 of the Administrative Code. In the event the excess loss insurance is purchased, all rights to recovery from that insurance must be assignable to the bureau in the event of bankruptcy of the public employer school facility employer.

(4) Reducing the costs of the construction project.

As a condition precedent to the bureau granting the privilege to self-insure the construction project, the highest elected official(s) of the public school employer shall certify to the bureau the costs savings of self-insuring the construction project. The certification shall include data as required by the bureau, including but not limited to a cost analysis showing the costs of insuring the project with the Ohio state insurance fund and the costs of self insuring the project.

(5) Safety plan.

A safety professional shall be assigned to each construction project. The safety professional shall be responsible for ensuring that activities are performed in accordance with the site-specific health and safety plan ("HASP") and training of site personnel.

A site-specific HASP shall be created prior to the start of the project and shall, at a minimum, contain the following elements:

(a) Identify all recognized site hazards associated with each phase of the project. Particular attention should be given to fall hazards, trenching operations, and electrical hazards.

(b) Identify key personnel and alternates responsible for site safety and health and the appointment of a site safety and health officer. Roles and responsibilities of the key personnel and alternates must be defined.

(c) Evaluate the risks associated with each operation and identify the appropriate control measures to be taken to minimize or eliminate those risks.

(d) Address training requirements for both routine and non-routine activities.

(e) Include contingencies in the HASP, which may include: communications, both internal and external, first aid provisions and providers; identification of nearest medical facility; post emergency phone numbers; and site control to prevent access by unauthorized personnel.

(f) Include employee involvement, such as involvement in inspections, incident investigations, and hazard analyses.

(g) Collect documentation of information, such as hazard inspections, audits of the HASP, injury/illness data, incident investigations, industrial hygiene surveys, maintenance records, and job hazard analyses.

(6) Organizational plan criteria.

The public school employer shall:

(a) Identify a self-insured program administrator to be knowledgeable in the rules and laws of Ohio self-insurance for workers' compensation;

(b) Identify its plan to obtain timely payroll information for all contractors and subcontractors covered, to ensure timely calculation and distribution of injured worker compensation and benefits; its methodology for payment of compensation and benefits; and its method of educating each contractor and its employers as to proper claim reporting and access to medical care procedures;

(c) Designate where claim files will be located;

(d) Provide to the bureau for approval the employer's plan for medical management of claims as required by paragraph (L)(1) of rule 4123-19-03 of the Administrative Code;

(e) Plan to ensure accurate accounting of workers covered under the construction project; and

(f) Identify the bank used for the workers' compensation account.

(7) Ombudsperson duties.

The public school employer shall employ an ombudsperson for the construction project. The ombudsperson shall:

(a) Have experience in workers' compensation or the construction industry, or both;

(b) Communicate with and provide information to employees who are injured in the course of, and arising out of, employment on the construction project;

(c) Investigate the status of a claim upon the request of an employee; and

(d) Provide information to claimants, third party administrators, employers, and other persons in protecting their rights under the workers' compensation laws and rules.

Last updated January 3, 2023 at 9:54 AM

Supplemental Information

Authorized By: 4121.121, 4121.13, 4121.30
Amplifies: 4123.29, 4123.35
Five Year Review Date: 12/1/2027
Prior Effective Dates: 12/15/1998, 4/9/2003 (Emer.), 7/14/2003