Workers Compensation Insurance in Ohio

Every day, millions of Americans head to their workplaces. The last thing on their minds is a workplace injury because they believe the employer has in place adequate safety measures. However, workplace safety numbers paint a grim picture. The National Safety Council says a worker suffers injury every 7 seconds on the job. In 2018, 5,250 workers died from a work-related injury in the country. This was a 2% increase from 2017’s total of 5,147 workers. 

Workplace injuries can devastate the individual and their families. This is where a workers’ compensation insurance comes in handy.  In Ohio, the Workers’ Compensation Law system created in 1911 seeks to protect employees in case of injuries at work. This system provides medical care and income replacement benefits to workers injured on or who fall ill because of their job.

This guide explores Ohio workers compensation law in detail to help both employers and employees to make the right decisions in case of workplace injuries.

Ohio Workers’ Compensation Law in Detail

Unlike in other states, the workers’ compensation system here is a monopolistic state fund. This means employers can only buy workers’ compensation insurance through a government-operated fund. If your company has other employees outside Ohio, you will have to consider additional coverage to meet the state’s workers’ coverage requirements.

How Workers’ Compensation Works in Ohio

Before buying workers compensation insurance in Ohio, an employer must understand how this works. Ohio boasts the country’s largest state-funded workers’ compensation system. Unlike other states, the Ohio worker’s compensation system is a no-fault and exclusive insurance system for workplace injuries.

An employee injured at work qualifies for workers’ compensation benefits for medical bills and a portion of lost wages. The no-fault provision is a big plus for workers as it means they don’t have to prove that their employers caused their injury.

Workers here get a guarantee of coverage against injuries in this system. However, they give up the right to sue their employer for negligence. They also don’t claim compensation for pain and suffering or as punitive damages as happens in normal workers’ compensation litigation.

All worker’s compensation claims have to go through the state BWC or Industrial Commission (IC). For a claim to lead to a settlement, there are four requirements:

  1. An employer/employee relationship: This relationship must exist for the claimant to be rightfully entitled to benefits as an employee.
  2. The injury must be accidental in character and result: The employee should have been followingworkplace protocol and procedure during the accident and not flouting the rules.
  • The injury must have happened in the course of employment, meaning while at work.
  1. The injury must have happened out of the employment, meaning it happened due to a risk or hazard directly related to employment.

Who Needs Workers’ Comp Insurance in Ohio

According to Ohio law, it is a requirement for every business with employees to carry workers’ compensation insurance purchased through a state agency.

There’s an exception for employers of domestic workers, including babysitters, housekeepers, and gardeners, earning less than $160 per calendar quarter. If you pay more than this amount to your domestic workers for 13 weeks, you still need to purchase Ohio workers compensation.

Volunteers do not fall under the classification of workers and don’t qualify for workers’ compensation insurance. However, if their work is under a public employer within the state, they should be covered under workers’ comp insurance.

Workers’ compensation coverage is also optional for LLCs acting as partnerships, family farm corporate officers, sole proprietors, partners, an LLC acting as a sole proprietor, and individuals working as a corporation without employees.

For part-time employees, an employer must still carry workers’ compensation insurance in Ohio. The only difference for part-time employees comes in the calculation of employee benefits in case of injuries. There’s a formula used to calculate the benefits based on the hours worked.

To avoid falling foul of the worker’s compensation law, employers should correctly classify people working for them either as employees or independent contractors. The distinction makes all the difference when it comes to the requirement for workers’ compensation insurance.

One becomes an employee if the employer manages their working hours, resources, travel routes, and quality of performance. This means they work in your company and as such, you have to provide workers’ comp coverage.

Employers should obtain not only such cover but also post notice of the same.  The employer should report to the Ohio Bureau of Workers’ Compensation (BWC) within a week of learning about an injury to one of their workers.

Penalties for Not Having Workers’ Comp Insurance in Ohio

The Ohio Bureau of Workers’ Compensation (BWC) administers Workers’ Comp Insurance in the state. It is the primary state body mandated to handle workers’ comp claims.

The agency also monitors adherence with workers compensation Ohio laws and has strict penalties for companies or organizations that fail to comply. They also penalties for those businesses that allow coverage to lapse thus putting employees in danger. Companies also face penalties if they do not submit a payroll report on time.

The Ohio Bureau of Workers’ Compensation sets a premium for each employer every year and promptly sends a payment schedule. In coming up with the premiums, BWC considers the company’s estimated payroll. They then re-evaluate this every July and adjust it to reflect the actual payroll amount.

Employers in Ohio pay premiums directly to the Ohio BWC which makes it easier to monitor compliance with workers’ compensation laws.

Penalties are as follows:

  • 1% of the premium due ($3 minimum to $15 maximum) for failure to file a payroll report on time.
  • A $30 flat fee for failing to pay the premium on time. There’ also a charge of up to 15% of the premium due depending on how late BWC Ohio receives the premium.
  • Reimbursement of all costs to the BWC where an employee makes a claim to the BWC and the agency accepts the claim yet the employer has no coverage.
  • Without worker’s compensation insurance, an injured worker can sue you directly for all damages and expenses related to the injury.
  • BWC files assessment liens for nonpayment of premiums. The agency will also claim costs when there is a lapse in coverage.

The Ohio Bureau of Workers’ Compensation (BWC) is keen to ensure compliance with the Ohio workers compensation law. For any business operating in the state, it is cheaper and more convenient to buy the required coverage to avoid legal disputes.

Average Cost for Workers’ Compensation Insurance in Ohio

The cost of insurance will depend on several factors, top among them the level of risk for specific occupations. Ohio relies on the National Council on Compensation Insurance (NCCI) Manual to classify different occupations according to the risk level.

The estimated employer costs for workers’ compensation insurance in Ohio are $0.75 per $100 in covered payroll. This is according to the National Academy of Social Insurance [PDF].

After an accident, the employer sends a report to the Ohio Bureau of Workers’ Compensation and must include the NCCI codes. This helps BWC determine the cost of insurance.

Death Benefits under Ohio Workers’ Compensation Law

Ohio workers compensation also includes death benefits awarded to dependents of a covered deceased worker. Death benefits are 66.67% of the deceased worker’s average weekly wage. The death benefits also include up to $5,500 for burial expenses.

Dependents include:

  • The spouse
  • A child under 18 years
  • A child under 25 years and still in school or a
  • A disabled child of any age unable to earn a living.

Anyone else who relied on the deceased worker for financial support might as wholly or partially dependent. The BWC analyzes each case individually. The agency also determines how to allocate benefits among dependents.

The spouse generally receives benefits until death. If they remarry, the BWC pays a two years’ worth of benefits in a single lump sum.

Settlements for Workers’ Comp in Ohio

 After suffering an occupational injury, an employee can file a workers’ comp claim on their company’s policy. The insurance company evaluates the claim and comes up with a disability payment plan and medical bill funds. The employee can accept the offer on the table or pursue a larger workers’ compensation settlement.

The employer should stay involved to avoid being mentioned in the case later on. The settlement case can result in a lump sum, a payment plan/ a structured settlement, or a mistrial. A partial settlement is also possible where the employee settles disability and wage loss benefits but retains the right to receive future medical treatment.

What Are Limitations for Workers’ Compensation Claims in Ohio

For both regular benefits claims and workers’ compensation death benefits in Ohio, the statute of limitations is one year from the time of injury or death.

Where Can You Get Workers’ Comp Insurance?

Workers’ compensation insurance in Ohio is only through the state itself and not private insurance companies. To apply for workers’ compensation, you should fill BWC’s Form U-3 online and pay the minimum $120 application fee.

There’s also the additional option to self-insure but this is not ideal for small businesses due to the large amounts required to cover potential claims.

Final Thoughts

Ohio workers compensation is mandatory for any business with an employee with a few exceptions. However, this worker’s comp insurance system is complex and new businesses struggle to comply. It is important to learn the basics of the worker’s comp insurance to protect yourself and your business in case of workplace injuries.