Did You Know Ohio Legislature Is Proposing Significant Change To Workers’ Compensation?

Did you know there are some significant changes being proposed in the Ohio legislature to Workers’ Compensation?

This week our guest bloggers, Henry and Colleen Arnett, attorneys from Livorno & Arnett Co., LPA, tell about the changes being proposed.

Thanks, Henry and Colleen!

WORKERS’ COMPENSATION BILLS PENDING IN THE HOUSE

Henry Arnett, Esq., and Colleen Arnett, Esq.

Livorno & Arnett Co, LPA

livornoandarnett.com

Recently several new bills have been proposed regarding Workers’ Compensation claims in Ohio.  This article will briefly summarize some of the more significant provisions of House Bills 268, 269, 380, and 459.

CHANGES FOR SELF-INSURED EMPLOYERS

House Bill 268 is sponsored by Representative Henne, has 12 co-sponsors and is pending in the Committee on House Insurance. In Ohio, employers may provide workers’ compensation coverage for their employees in two ways: (1) paying premiums into the State Insurance Fund, and the Bureau of Workers Compensation pays compensation to injured workers and reimburses medical providers or (2) by employers paying compensation, benefits, and medical expenses directly, also known as self-insurance. HB 268 allows all self-insuring employers to purchase private workers’ compensation insurance, a significant change from current law.  Also, current law prohibits insurers from directly or indirectly representing the employer in any settlement, adjudication, determination, allowance or payment or workers’ compensation claims, but this bill would eliminate that prohibition.

Additionally, current law requires an employer to have enough assets located in Ohio to insure the payment of claims to qualify for self-insuring status, whereas HB 268 waives that asset requirement if the employer holds a rating of B3 or higher according to Moody’s or a comparable rating from a similar agency. The bill also would create the Self-Insuring Employers’ Guaranty B Fund, which would consist of contributions and other payments made by employers granted self-insuring status as a result of the waiver. This fund would be used to secure compensation and benefits for employees in the event of an employer’s default.

Self-insured status is also affected by House Bill 459, which states that groups of employers who have sufficient financial ability to pay their obligations under the Workers’ Compensation Law and can abide by the Administrator’s rules may be granted self-insuring status. Self-insured status under current law is granted only to individual employers. HB 459 is sponsored by Representative Henne, has six co-sponsors and is pending in the House Insurance Committee.

HOUSE BILL 269 CHANGES

HB 269, is also sponsored by Representative Henne, has 25 co-sponsors and is pending in the House Insurance Committee. This bill does a number of things, including renaming the Bureau of Workers’ Compensation the Office of Worker Safety and Rehabilitation, as well as renaming other entities.

Currently, permanent total disability (PTD) can be paid until the injured worker’s death, assuming the worker remains unable to engage in sustained remunerative employment. Under the bill, if an injured worker is injured or contracts an occupational disease within one year before the worker attains full retirement age, or after he/she has reached that age, PTD benefits are payable only for two years and are then terminated.

For other individuals, HB 269 replaces PTD with extended benefit (EB) compensation when an employee attains full retirement age for the position in which the employee was employed at the time of their injury or occupation disease. The “full retirement age” will be set at either (1) the age at which an employee is eligible for an unreduced retirement allowance or benefit from an existing state pension system or any municipal pension system, or (2) the age at which the employee reaches full retirement age under the Social Security Act. EB compensation is calculated by multiplying the PTD compensation by a percentage that varies based on the number of years the employee received PTD.

For some PTD recipients, the reduction may be substantial.  The amount of the EB compensation varies, anywhere from 10% of what PTD compensation would be, up to 100% of that amount, depending on how long the individual was on PTD. There is no relationship between the amount of the reduction and the amount of retirement benefits received by the injured worker; the changes made to PTD compensation, its elimination or replacement by EB, are based solely on the employee’s age and relationship to when the employee could retire, not whether the employee actually retires at that age or the amount received in retirement benefits.

This bill requires EB compensation payable to an employee to be increased by 2% each year but prohibits an employee receiving EB from participating in the Disabled Workers’ Relief Fund.

The bill also requires the Administrator to develop a written return to work plan for an employee receiving temporary total disability compensation. If the worker fails to comply with the plan, the temporary total disability payments would be stopped. The bill also requires the Administrator to provide incentives to employers to participate in loss prevention programs.

Additional death benefits are awarded in the form of a $35,000 lump sum payment, along with a limited scholarship for dependents.

ALIENS

Current Ohio Workers’ Compensation Law defines “employee” as every person in the service of any person, firm, or private corporation, including public service corporation, that employs one or more persons regularly in the same business or in or about the same establishment under any contract of hire, express or implied, oral or written, including aliens. Current law does not define “aliens.” Under House Bill 380, the definition of employee with respect to aliens is limited to include only aliens authorized to work by the U.S. Department of Homeland Security or its successor. It excludes an “unauthorized alien,” which is defined as an alien who is not authorized to be employed in accordance with the Immigration Reform and Control Act, and an “illegal alien” which is defined as an alien who is deportable if apprehended. Under this bill, an employer may not elect to obtain coverage under the Workers’ Compensation Law for an illegal or unauthorized alien. HB 380 is sponsored by Representatives Seitz and Householder and has 27 co-sponsors. It is pending in both the Committee on Senate Insurance and Financial Institutions and the Committee on House Insurance.

Readers are urged to go to the Ohio General Assembly website  (https://www.legislature.ohio.gov/legislation/search-legislation) to review all provisions of the bills and their current status.

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About CALMC Blog

Columbus Area Labor-Management Committee is a not-for-profit organization dedicated to involving employers and employees to preserve jobs, resolve workplace issues, and promote labor-management cooperation. Visit our website at http://calmc.org
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