Employers should be aware of two new premium plans that will make significant changes to how their workers’ compensation works. Ken Finley, a senior rate analyst with V & A Risk Services, a strategic partner with Ohio Employee Health Partnership, says employers should look into how the new “split plan” rating and the Drug Free Safety Program will affect them.
“The Ohio Bureau of Workers’ Compensation is ‘sunsetting’ the Drug Free Workplace Program,” Finley says. “Employers that were participating in that program will have the option to switch to the Drug Free Safety Program, which begins July 1, 2010.”
Also, the “split plan” model considers frequency of claims, as well as severity, when calculating an employer’s workers’ compensation experience rating.
Smart Business spoke with Finley about how these new plans will affect employers.
Why would companies want to participate in the DFSP?
DFSP is not just a premium reduction program but also a claim avoidance program. Employers that are recognized as DFSP participants have an advantage over those companies in their area that do not do prehire drug screening, because the drug users will find the companies that don’t require that up front.
When the BWC started the DFWP, it was stated that drug users file five times more claims than those that do not abuse drugs. Plus, when applicants come into your workplace and they can see you do prehire drug testing, sometimes they don’t return the application.
What changes should employers be aware of between the DFWP and the DFSP?
There are a couple of major differences. Under the old program, there was a five-year window for participation. This new program has no time restraints, so you can be in it forever if you want.
Another difference is that the discounts are lower under this new program — 4 percent for the basic level, and 7 percent for the advanced level.
Under the new program, there is a basic level with requirements including a safety review. There is a safety component that goes along with the DFSP that was not part of the DFWP. There is now some accident reporting and accident analysis training for supervisors that needs to occur, along with the drug testing that took place under the DFWP.
The employer must submit a written DFSP plan within the first year as part of the requirements of the program.
If you are a group-rated employer, you are eligible to be in the DFSP, but you must enroll at the advanced level and your reward is only 3 percent. So basically, the bureau is requiring group-rated companies that want to participate to go to the advanced level and they only will get the difference between the basic discount and the advanced discount. That 3 percent is applied after the group discount. So if you are in a group getting a 50 percent discount already, you are going to get 3 percent off of the remainder.
Also, Level Zero, the basic level of DFWP that state contractors are mandated to comply with in order to be eligible to apply for state contracts, will continue as is. There is no discount associated with it.
