Ohio is one of the few states that does not allow private insurers to participate in the workers’ compensation system, although it permits larger employers to “self-insure” to administer and pay their own claims directly.
Legislation introduced two weeks ago might change that. Ohio House Bill 268, introduced June 12, 2017, proposes additional options for employers to become self-insured.
A big barrier to self-insurance in Ohio is the requirement that the employer maintain a certain number of assets within the state. The sufficiency of those assets is regularly reviewed by the administrator. The proposed legislation would waive a review of assets for employers holding a Moody’s rating of B3 or better.
The legislation would require employers obtaining a waiver of an asset review to pay into a newly established self-insured employers’ guarantee fund, and post an additional security if the administrator deems necessary.
Ohio law currently prohibits employers from purchasing insurance coverage to indemnify themselves against losses below $50,000 for any single claim. It also prohibits insurance companies from directly participating in the settlement, adjudication or payment of claims.
The proposed legislation does away with the $50,000 requirement and allows employers to be indemnified against all losses. It also removes the prohibition against insurance companies’ direct administration of claims.
It remains unclear whether this legislation will gain any traction. However, it opens the debate about whether more Ohio employers should have the option of insuring themselves outside the state-run Bureau of Workers’ Compensation.
Rich is an attorney with Scheuer Mackin Breslin LLC, a statewide Ohio law firm committed to advising and representing employers in their workers’ compensation and related interests.