News and Updates
Category: 2020 Group Retro
Disappointed with Your 2020 Group Retro Refund?
You’re not alone. Now that BWC is releasing the first Group Retro checks (and a few assessments) for the 2020 policy year, many Ohio employers are underwhelmed by the results. In the earlier days of Group Retro, it wasn’t unheard of to see refunds over 50%. Spooner certainly had its heyday in the program, with some of our industry groups reaching close to the maximum return of 63%. In the last ten years, we’ve seen several factors begin to chip away at these big returns: increased loss development factors, fewer premium dollars in pools due to Premium Size Factor Reductions, and more recently – the move to a new reserve calculating system called ACES. The first two changes caused average returns to dip into the 40% ranges, but huge reserves from ACES delivered a sucker punch that left only five of the best performing groups with returns over 40%. Five of the hardest-hit pools will receive an assessment, which means paying back anywhere between 15-25% of their 2020 premiums to BWC. All other groups in the middle of the best and worst averaged returns of less than 24%. For some, that’s less than half of their historical performance average. We’ve been tracking the impact of ACES on Group Retro for a while now, and several TPAs (including Spooner) have voiced their concerns to BWC regarding the dwindling returns. While the complaints were taken under advisement, BWC chose to make such minor changes to the reserve calculations t
The Good, the Bad & the Ugly: 2020 Group Retro Performance
Since the 2020 policy year wrapped, we’ve mentioned the lackluster performance of several Group Retro pools. These poor returns, as well as a few assessments, are occurring largely in part to BWC’s move to the ACES reserves system, and aren’t necessarily tied to the performance of any one TPA. Luckily, Spooner’s pools remain steady (this is the good), but they may not be the returns we’ve seen in years past. On July 28, we received what will be the final numbers used to calculate the first round of Group Retro returns for those enrolled during the2020-2021 policy year. Out of 53 groups across all industries, only five performed above the 40% mark. This is increasingly important to remember as you shop 2023-24 programs this summer, and you’re seeing 50-60% returns being promised. The remainder lingered between 10-38% (the bad), with a few more in the red – meaning employers in those pools will be assessed, i.e. billed for their share of the difference (the ugly). Many decision makers don’t make note of the “maximum assessment” when they complete their Group Retro paperwork. This is a percentage disclosed that equates to how much of that year’s premium you’ll be responsible to pay back to Ohio BWC if the performance of your Group Retro pool is worse than expected. Here’s a real-life example of one of the groups being assessed. This particular pool was assigned a 20% maximum assessment,
