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Ohio House Passes Business-Backed Workers’ Compensation Subrogated Claims Bill

Several business groups reiterated support Tuesday for legislation they say could prevent small businesses from experiencing an unfair jump in workers’ compensation premiums.

The legislation (HB 207) requires workers' compensation claims to be charged to the Surplus Fund Account instead of a state fund employer's experience in certain circumstances when a claim is due to a motor vehicle accident involving a third party.

According to Charles Smith, special counsel for the Ohio chapter of the National Federation of Independent Businesses, the legislation would prevent small businesses from losing eligibility for discount programs through no fault of their own.

“This solution is long overdue and will help level the playing field for small employers while still preserving the rights of the injured worker to receive adequate treatment and compensation,” he said, before later adding, “Unfortunately, some of the more catastrophic claims can cause small business owners to go out of business because of the increased workers’ compensation costs and protracted subrogation process.”

Dan Boyd, director of labor and legal affairs at the Ohio Chamber of Commerce, called the bill “a sound approach to protect the interests of businesses throughout the state of Ohio from financial hardship due to motor vehicle accidents that were not their fault and which they could not have prevented.”

“This bill provides an equitable balance between maintaining the integrity of the state-fund and protecting employers from being unreasonably penalized while also ensuring that injured workers received treatment and compensation,” he told the committee.

Jim Klingensmith, testifying on behalf of the Ohio Insurance Agents Association, told the committee that the problem is not wide scale, but creates difficulties for businesses nonetheless.

“If you’re the impacted employer, it matters. In other words, this is not necessarily a problem of frequency, but rather severity,” he said.

The Construction Employers Association, the Associated General Contractors of Ohio, the Ohio Contractors Association, the National Electrical Contractors Association and the Mechanical Contractors Association of Ohio provided joint written testimony on the measure“Our job sites are fluid. Workers have to drive to and from sites to perform their daily jobs…sometimes multiple times a day,” they wrote. “Thus, if HB 207 is passed, an employee through no fault of their own that is injured by a third party driver would have the claim paid out of surplus funds maintained by BWC. This will make sure the employee is covered, but also preserves the employer’s group rate when the accident is no fault of their own.”

Written testimony in support of the legislation was also provided by representatives of the Greater Cleveland Partnership’s Council of Smaller Enterprises and the Ohio Automobile Dealers Association.

“In our industry, for example, service technicians road test vehicles after servicing them to ensure proper operation,” Joe Cannon, vice president of government relations at OADA, wrote. “Unfortunately, these employees are sometimes injured by third party drivers who were at fault. Under the current system, a claim by the employee is applied to the dealer’s experience, regardless of whether or not the claim is likely to be subrogated. The result is increased costs to our members, including potentially impacting their ability to qualify for group rating.”

The measure was approved by the House in a unanimous vote.

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