Current through all regulations passed and filed through September 16, 2024
(A) An employer that is either a private or a
public employer taxing district as defined in division (B)(1) of section
4123.01 of the Revised Code may
be eligible for either the tier I or tier II retrospective rating plan
depending upon satisfying the eligibility requirements for either the tier I or
tier II retrospective rating plan as described in this rule.
(B) For both the tier I and tier II
retrospective rating plans, the employer must satisfy the following
requirements as of the application deadline:
(1) The employer must be current with respect
to all payments due the bureau, as defined in paragraph (A)(1)(b) of rule
4123-17-14 of the Administrative
Code.
(2) The employer cannot have
cumulative lapses in workers' compensation coverage in excess of fifteen days
within the last five rating years.
(3) The employer must report actual payroll
for the preceding policy year and pay any premium due upon reconciliation of
estimated premium and actual premium for that policy year no later than the
date set forth in rule
4123-17-14 of the Administrative
Code. An employer will be deemed to have met this requirement if the bureau
receives the payroll report and the employer pays premium associated with such
report before the expiration of any grace period established by the
administrator pursuant to paragraph (B) of rule
4123-17-16 of the Administrative
Code.
(4) The employer must be in
an active policy status. The administrator may waive this requirement for a new
business entity moving into Ohio. For purposes of this rule, "active policy
status" does not include a policy that is a no coverage policy or a policy that
is lapsed.
(5) The employer's
estimated experience-rated premium for the retrospective rating year must be
greater than or equal to the minimum experience-rated premium threshold listed
on the employer's retrospective rating minimum premium percentages table,
contained in the appendices to rule
4123-17-53 of the Administrative
Code. If estimated premium is less than the minimum experience-rated premium
threshold listed on the employer's retrospective rating minimum premium
percentages table, the bureau will reject the application. In the event the
estimated experience-rated premium is equal to or greater than the minimum
premium threshold but the actual premium is less than the minimum
experience-rated premium threshold, the retrospective rating plan remains in
effect for that risk and the minimum premium is based on the minimum
experience-rated premium threshold multiplied by the appropriate minimum
premium percentage for the hazard group and the claim limit/maximum premium
percentage selected.
(C) In addition to the
requirements of paragraph (B) of this rule, for the tier I retrospective rating
plan, a private employer must submit audited financial statements prepared in
accordance with generally accepted accounting principles (GAAP) to satisfy the
following requirements:
(1) The employer must
satisfy financial standards demonstrating strength and stability. In reviewing
the financial requirements of the employer, the bureau shall consider, but is
not limited to, the following criteria, as applicable:
(a) The employer's trend of operating profit
for a minimum of three years;
(b)
The employer's trend of net income for a minimum of five years;
(c) The employer's consistent return on
equity, of at least ten per cent;
(d) Significant asset size of the employer in
the state of Ohio;
(e) A total
liabilities/equity ratio of no greater than four to one;
(f) The employer's debt structure, including
but not limited to current versus long term debt and recent drastic changes in
debt;
(g) The employer's retained
earnings trend;
(h) Whether the
employer has significant fluctuations in specific balance sheet numbers from
one year to the next; and
(i) The employer's bond rating.
(2) The employer shall demonstrate
the ability to maintain its financial viability and to cover all costs of the
retrospective rating plan through closure, in the event of a catastrophic or
severe workers' compensation loss.
(3) The employer cannot have entered into a
part-pay agreement for payment of assessments due the state insurance fund for
the past three rating years preceding the beginning date of the retrospective
policy year.
Alternatively, the employer may provide a letter of credit that
is equal to the maximum premium for the applicable policy year.
(D) In addition to the
requirements of paragraph (B) of this rule, for the tier I retrospective rating
plan, the bureau will obtain a public employer taxing district's audited or
reviewed financial statements prepared in accordance with generally accepted
accounting principles (GAAP) that are available on the state of Ohio auditor's
website. The bureau reserves the right to obtain additional financial
information from the public employer taxing district. The bureau will review
the public employer taxing district's financial statements to satisfy the
following requirements:
(1) The public
employer taxing district must satisfy financial standards demonstrating
strength and stability. In reviewing the financial requirements of the public
employer taxing district, the bureau shall consider, but is not limited to, the
following criteria, as applicable:
(a)
Significant asset size of the public employer taxing district in the state of
Ohio;
(b) The public employer
taxing district's debt structure, including but not limited to current versus
long term debt and recent drastic changes in debt;
(c) Whether the public employer taxing
district has significant fluctuations in amounts reported on the balance sheet
and statement of operations from one year to the next; and
(d) The public employer taxing district's
underlying or uninsured bond rating.
(2) The public employer taxing district shall
demonstrate the ability to maintain its financial viability and to cover all
costs of the retrospective rating plan through closure, in the event of a
catastrophic or severe workers' compensation loss.
(3) The public employer taxing district
cannot have entered into a part-pay agreement for payment of assessments due
the state insurance fund for the past three rating years preceding the
beginning date of the retrospective policy year.
(4) The public employer taxing district in
making its initial application for retrospective rating, cannot be under fiscal
watch or fiscal emergency pursuant to section
118.022,
118.04 or
3316.03 of the Revised Code as
of the application deadline for retrospective rating.
(E) In addition to the requirements of
paragraph (B) of this rule, for the tier II retrospective rating plan:
(1) A private employer must submit audited
financial statements prepared in accordance with generally accepted accounting
principles (GAAP).
(2) The bureau
will obtain a public employer taxing district's audited or reviewed financial
statements prepared in accordance with GAAP or other comprehensive basis of
accounting as permitted in Ohio auditor of state bulletin 2005-002 from the
state of Ohio auditor's website. The bureau reserves the right to obtain
additional financial information from the public employer taxing
district.
(3) For a private
employer that does not demonstrate the ability to satisfy the financial
criteria of paragraph (C) of this rule, or a public employer taxing district
that does not demonstrate the ability to satisfy the financial criteria of
paragraph (D) of this rule, the financial statements provided by the employer
must demonstrate the ability to sustain losses that are at the maximum claim
limit for the retrospective rating plan and still maintain its financial
viability.
