The Ohio Bureau of Workers’ Compensation (BWC) is now authorized to offer workers’ compensation coverage in other states to eligible Ohio businesses. This new coverage gives companies a simple solution to protect their employees without having to manage multiple workers’ compensation policies in varying states with different laws.
“Up until now, the BWC provided coverage for Ohio employees working temporarily outside of the state, but many states did not honor that coverage,” says Kelly Lowry, client services manager at CompManagement. “This option allows employers to buy coverage for their exposure through the BWC and its partner versus separate coverage state by state.”
Smart Business spoke with Lowry about this new program and how it works for businesses with exposure outside of Ohio.
Why was Other States Coverage developed?
Historically, for employers that temporarily send employees outside of Ohio to work, there has been a risk that their coverage through the BWC was not sufficient as the BWC could not respond to a claim that was filed in another jurisdiction. In 2014, the Ohio General Assembly passed legislation granting the BWC the authority to contract with an insurer licensed in other states to provide coverage to eligible employers for out-of-state exposure. The policy is designed to prevent workers’ compensation gaps and protect employers from penalties and stop-work orders in other states.
What is the risk of not having coverage?
Each time an employee leaves Ohio, even for a short period, there is a risk that a work-related injury could occur and the injured employee could file a claim in a jurisdiction other than Ohio. The BWC does not and cannot respond to a claim filed in another jurisdiction. Therefore, that other state could find the employer to be uninsured and subject them to fines and/or other penalties, including the actual cost of the claim.
How is the BWC offering coverage?
The BWC is working with United States Insurance Services (USIS) and Zurich Insurance to offer optional coverage to employers that may face exposure while temporarily working outside of Ohio. It is not the intent of Ohio’s extraterritorial coverage to cover employees who regularly perform work outside of Ohio. A solution is available in all U.S. states except those that do not permit private workers’ compensation insurance.
How does the application process work?
Ohio employers apply directly to the BWC using the ACORD 130 application. Employers may seek assistance from their insurance agent who should be familiar with this form or contact the BWC’s Other States Coverage Unit directly. The BWC will determine eligibility and the premium cost for this coverage. The BWC will review the employer’s experience modifier, loss history, safety record and other pertinent information and then work with USIS and Zurich to secure a quote. If coverage is secured, the BWC will issue a policy via Zurich to cover out-of-state exposures. Zurich will handle all claims filed outside of Ohio under this program.
When should coverage be considered?
Employers should consider Other States Coverage when an employee is hired to do work in other states, when an Ohio-based employee is working in another jurisdiction for an extended period and when an employee is working in another state where the law requires specific coverage for temporary exposures.
Who is eligible?
An employer must have the majority of its business in Ohio, which equates to two-thirds of its total payroll for all related business operations in order to be considered for coverage. In addition, the employer must have active coverage with the BWC, have no lapses in coverage in the past 12 months at the time of application and have no past due balances. Self-insuring employers, temporary employment agencies, staffing entities and professional employer organizations are not eligible for coverage. Employers with operations that include certain high-risk manual classifications are also not eligible, which include but are not limited to aircraft exposures, grain mills and high-risk manufacturing.
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