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Why We Fight (For Your Group Retro Refunds)


Many Ohio employers have rejoiced over the big checks issued by Ohio BWC in the last few years, a boast that the state’s strategies that have yielded enough to share dividends with policyholders. While it’s easy to understand the excitement when you’re getting five, six, or even seven figure checks from BWC – we all know there’s no such thing as a free lunch.  Many of the businesses gladly cashed those checks not realizing that Ohio BWC wouldn’t be sending checks for refunds earned from the Group Retrospective (retro) program for the 2018 and 2019 policy years.  Employers who participate in the Group Retro program are rebated after the policy year ends, based on their group’s actual performance throughout the year. The pool establishes a premium level throughout the policy year - and when the actual losses come in lower than that, the consortium members are rebated their share of the difference. 

While no vendors were provided with the total that Group Retro refunds would have been for those years, Spooner’s actuarial department estimates that Group Retro refund totals for all participating policyholders during those years would have been as follows:
•    $190,000,000 for the 2018 policy year  
•    $155,000,000 for the 2019 policy year 

These projections include what would be all three years of refund payments for each policy year, not just the first year refund. The Group Retrospective program typically pays out three total refunds per year enrolled – the first following one year after the end of the policy year, and two more in the two subsequent years.
Hundreds of millions of dollars isn’t small chunk of change to BWC or anyone else – but let’s take a moment to put those figures into perspective. During the month of April 2021, BWC’s net position grew by $551M from investment income – so that alone could have paid for the group retro refunds. 

In April of 2020, BWC announced that it would be paying out dividends to policyholders equal to 100% of 2018 premiums paid into the state fund - $1.6 billion.  Just months later, they announced another dividend payout to employers for the equivalent of 100% of 2019 policy year premiums- $1.34 billion. In the final quarter of 2020, BWC announced they would distribute dividends of $5 billion, equal to roughly 372% of 2019 employer premiums. They could have paid out the Group Retro refunds (as their own by-laws state they should) and still provided $7,655,000,000 in dividends to Ohio businesses.  

Let’s also consider that the aforementioned $8 billion is not the first “Billion Back” that Ohio BWC has distributed.  It’s not unusual for BWC to return dividends after a year of “great investments” and low claims costs/frequency.  In year’s past, they’ve given dividends that equate to 66%, 88%, etc. of previous year’s premiums.  Yet in all previous years, they did not reduce or withhold Group Retro refunds.  When Spooner requested an explanation for the sudden change, we were told that Group Retro refunds were considered to be encompassed in those dividends. This is interesting, considering two different parts of the Ohio Revised Code (ORC) govern how both are to be distributed, and not affected by one another. Needless to say, Spooner does not consider this an acceptable explanation and we filed formal complaint with BWC after informing our clients. We also contacted other TPAs with Group Retro consortiums in Ohio asking if they’d like to join our fight to bring our collective clients the refunds they deserve, but all of them declined.

We are currently awaiting results from our second BWC hearing. While BWC claimed in our October 2020 hearing that they already had the authority to withhold Group Retro refunds - by our second hearing in April 2021, a change had been made to Ohio Revised Code in April 2021 that actually grants them that authority.  Why would you need to be granted a power that you supposedly already had? 
When there is more info available, Spooner’s Group Retro clients can expect to be contacted by their client services manager.  Businesses in other Group Retro pools can continue checking back here or signing up for our newsletter for continued updates on 2018 and 2019 Group Retro refunds. 

Here is our argument with the BWC:

•    Ohio Revised Code 4123.321 provides the manner in which the Board of Directors shall return excess surplus to employers and that they shall do so in the form of either cash refunds or a reduction of premiums, regardless of when the premium obligations were accrued.

            o    Ohio Administrative Code 4123-17-10 also gives the Board of Directors the discretion and authority to determine whether there is an excess of premium, and whether to return the excess premium to employers and the nature of cash refunds or reduction of premiums.

•    Ohio Administrative Code 4123-17-73 spells out the manner in which group retro refunds or assessments are calculated, distributed, or collected.  

•    We do not believe that the Board of Directors, through the approved dividend proposal or the authority granted to the Board through the above statutes, has the authority to change the statutory requirements of 4123-17-73 (Group Retro Program).  None of what is written gives the Board the ability to change other parts of the Ohio Administrative Code. 

•    We have attempted to obtain clarification of this position through the Employer Programs Unit on where the Board gets the authority to withhold Group Retro refunds and have yet to be provided an answer regarding the decision to end all Group Retro assessments and refund calculations for the 12-, 24-, and 36-month adjustment periods that should begin this fall and if they do have the authority - where in the Ohio Revised Code/Ohio Administrative Code is that granted?

•    The dividend is a cash refund that is defined as 100% of premium paid in the 2018 policy year but it is not a reduction of premium for the policy year. Without a reduction of premium for the 2018 policy year – the BWC is compelled to pay out refunds as provided under 4123-17-73.  


Most Recent

Are Missing Group Retro Refunds Complicating Your Budget for 2022?

Posted By Brandy King
November 09, 2021 Category: Ohio BWC, Workers Comp, Group Retro, Retro Refunds, 2018 Policy Year, PEO

Back in August, we told you that Ohio BWC wouldn’t be paying Group Retrospective refunds to employers who participated in Retro during the 2018 and 2019 policy years.  For the past 12 years, many businesses have counted on those checks to budget for the coming year. Normally, Retro refunds would have showed up last month (October), but this time those employers were left empty-handed.  Companies that were anticipating tens of thousands (hundreds of thousands, in some cases) in Retro Refunds are now faced with an end of year shortfall and difficulty budgeting.  Our actuarial department estimates that Group Retro refund totals for all participating policyholders during the 2018 and 2019 policy years would have been as follows: •    $190,000,000 for the 2018 policy year   •    $155,000,000 for the 2019 policy year  That’s $345 Million in refunds not being paid back! If you are concerned with how the state is managing your premium dollars - and more importantly, your refunds - you have options. Self-insuring is one option, or you can look into a partnership with SuretyHR through our Self-Insured PEO program. This provides a lot of the same savings and benefits of self-insuring for workers’ comp, but without the risk and financial burden of directly paying excess

BWC to Host Open Forum on ACES

Posted By Brandy King
October 07, 2021 Category: ACES, Ohio BWC, Workers Compensation, Ohio BWC, Ohio Workers Compensation, Underwriting, ACES, MIRA II, EMR, Insurance Premiums

On October 14, BWC will host an open forum with TPAs to discuss the impact of their new reserve system called ACES.  Spooner’s goal is to convince BWC that this system is overestimating reserves for lost time claims (as well as some medical only claims) that will have a dramatic effect on Group Retro refunds for the 2020 policy year and future years. This could also have a negative impact on employers’ EMRs for the 2023 policy year. BWC implemented this new system of calculating reserves in January 2021. As early as June, we began noticing reserves jumping to nearly 4-5 times what they would have been under the previous system and industry standard, MIRA II. We shared another update in August, after reviewing the first round of results for 2020 Group Retro and finding that 68% of pools could face a first year assessment, as opposed to getting a refund from the program.  These open forums held by BWC are a platform for TPAs to voice concerns over certain policy and procedure changes that may negatively impact Ohio businesses. Spooner is an Ohio business, and our family of companies make it a priority to fight for policy changes that will have a positive impact on the business community that we’re so proud to be a part

Is Our Company Required To Train Employees in First Aid and CPR?

Posted By Brandy King
October 07, 2021 Category: OSHA, First Aid, CPR, AED, Medical Treatment, First Responder Training, Safety Training, Safety, Compliance

One question that our safety team gets across nearly all industries is, “Am I required to have my employees certified to perform first aid and CPR?” OSHA requires that in the absence of an infirmary, clinic, or hospital within near proximity to the workplace – one or more staff members should be adequately trained to provide first aid. While the standards do not specify exactly how close by, OSHA has long interpreted the term "near proximity" to mean that emergency care must be available within no more than 3-4 minutes from the workplace. One option these standards provide employers is to ensure that a member of the workforce has been trained in first aid. This option is a feasible and low-cost way to protect employees, as well as putting the employer clearly in compliance with the standards. OSHA recommends that every workplace include one or more employees who are trained and certified in first aid, including CPR. While AED training is not specifically addressed or required by the standard, including that in your CPR training is recommended.   The team at Spooner Safety will now be offering first aid and CPR training to businesses that would like to certify members of their team as either a requirement or best practice. Please contact Jeremy Smith at 440-249-5696 | Ext: 154 for more

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