The end of the Ohio BWC policy year will be ending on June 30th, which means it’s time to start thinking about your payroll True Up. Whether you’re an employer who reported late, not at all, or were unable to pay a resulting balance – you’re one of thousands who may have been removed from Group Rating, Group Retro or several other programs as a result. BWC takes timely reporting and balance payment very seriously, so it’s important that Ohio employers do as well! 

Most employers are familiar with the process and requirements by now, but here’s a recap for new policyholders and the uninitiated: 

• BWC’s policy year runs July 1 through June 30. 
• Ohio BWC uses payroll from two years prior to determine your premiums. If you’re a new policyholder, the payroll projection made on your application is used to calculate premiums.
• When the policy year ends, policyholders have from July 1 until August 15 to report their actual payroll from the past policy year
• Actual payroll is compared to projections that your premiums were based on, and there are three potential outcomes: break even, the employer owes BWC or BWC owes the employer. 
• Any balance owed by the employer must be paid at the time of reporting to be considered current and in good standing. There are currently no options for payment plans outside of the balance being turned over to the Ohio Attorney General’s office. 
• BWC’s billing hierarchy dictates that any payments made will be applied to True Up balances first, even if you’re attempting to make  your regular premium installment. 

Some businesses will end up owing BWC unless operations have remained the same or scaled back. The chances are low that the payroll totals from this year will match those from over a year ago. Over the last several years, BWC has increased their payroll audit activity. We’ve noticed that large credits due back to the employer after True Up seem to increase the likelihood of an audit. While BWC stated the benchmark can change each year - True Up credits in excess of $25,000 with a variance of 40% or more (in payroll from one year to the next) will likely be reviewed or audited before the credit is released.   

There are ways to avoid these pitfalls, though. You don’t have to wait until July to give BWC a more accurate payroll estimate. You can make adjustments to your estimated payroll throughout the year by contacting BWC at 1-800-644-6292. Your TPA should also be able to help you with a mock True Up. Spooner provides this service to our clients toward the end of the policy year to help them prepare for any potentially large payments that would be owed to BWC after the process. Since you’re expected to pay balances at the time of reporting – it’s nice to have an idea what’s in store so that your finances are in order. 

It’s not unusual for employers to be alarmed when they receive notification that they’ll be audited. We receive a lot of calls about this, but since a BWC payroll audit involves looking at previous years’ payroll records – there’s little that Spooner’s team can do to help you prepare. The best course of action is to touch base with your client services representative following the audit. If an employer feels that BWC’s reclassifications were inaccurate, there may be an opportunity for Spooner to make an appeal on their behalf. 

For employers that are tired of guessing at annual payroll to determine premiums, there are better options for Ohio workers’ comp coverage. Find out how SuretyHR lets employers pay premiums based on real time payroll runs, avoid BWC reporting deadlines, and focus their energy on running their business.