Current through all regulations passed and filed through September 16, 2024
(A) All employers granted the privilege to
pay compensation and benefits directly shall demonstrate sufficient financial
strength and administrative ability to assure that all obligations under
section 4123.35 of the Revised Code will
be met promptly. The administrator of workers' compensation shall deny the
privilege to pay compensation and benefits directly, where the employer is
unable to demonstrate its ability to promptly meet all the obligations under
the rules of the industrial commission and the bureau and section
4123.35 of the Revised Code. The
administrator of workers' compensation shall consider, but shall not be limited
to the factors in divisions (B)(1) and (B)(2) of section
4123.35 of the Revised Code
where they are applicable in determining the employer's ability to meet all
obligations under section
4123.35 of the Revised Code.
The administrator of workers' compensation shall review all
financial records, documents, and data necessary to provide a full financial
disclosure of the employer, including but not limited to, the balance sheets
and a profit and loss history for the current year and the previous four years.
The administrator of workers' compensation shall consider whether the employer
has demonstrated the financial ability to pay any and all claims obligations.
Unless an applicant obtains waiver under paragraph (D) of rule
4123-19-03.1 of the
Administrative Code, financial records submitted to the bureau must be audited
by a certified public accountant, in accordance with generally accepted
accounting principles, and shall include the certified public accountant's
audit opinion.
(1) The administrator
of workers' compensation may waive certain requirements of divisions (B)(1) and
(B)(2) of section 4123.35 of the Revised Code
pursuant to rule
4123-19-03.1 of the
Administrative Code.
(2) The
administrator of workers' compensation shall not grant the status of
self-insuring employer to the state, except that the administrator may grant
the status of self-insuring employer to a state institution of higher
education, including its hospitals.
(B) The employer shall secure from the bureau
proper application form(s) for completion. The completed application shall be
filed with the bureau at least ninety days prior to the effective date of the
employer's requested status as a self-insuring employer. The administrator of
workers' compensation may require that the application be accompanied by an
application fee as established by bureau resolution to cover the cost of
processing the application in accordance with section
4123.35 of the Revised Code. The
application shall not be deemed complete until all required information is
attached thereto. Prior to presentation to the administrator of workers'
compensation, applicable items listed in divisions (B)(1) and (B)(2) of section
4123.35 of the Revised Code
shall be made available to the bureau and shall be reviewed by the
bureau.
(C) The bureau shall accept
only application forms which provide answers to all questions asked and furnish
all required information.
(D)
Return of the completed forms required by this rule and any additional
information required by the bureau to process the employer's application should
be submitted at least ninety days prior to the effective date of the employer's
requested status as a self-insuring employer.
(1) If the administrator determines to grant
the privilege of self-insurance, the bureau shall issue a finding of fact,
which has been prepared by the bureau and signed by the administrator of
workers' compensation, subject to all conditions outlined in paragraph (M) of
this rule.
(2) If the administrator
of workers' compensation determines not to grant the privilege of
self-insurance, the bureau shall so notify the employer, whereupon the employer
shall be required to continue to pay its full premium into the state insurance
fund.
(E) All employers
that have secured the privilege to pay compensation and benefits directly, will
be required to make contributions as determined by the administrator of
workers' compensation to the self-insuring employers' guaranty fund established
under section 4123.351 of the Revised Code,
and if an additional security is required by the bureau, the amount form of the
additional security may be specified by the bureau. If the additional security
is in the form of a surety bond, the bond shall be from a company approved by
the bureau and authorized to do business in the state of Ohio by the Ohio
department of insurance. The surety bond shall be in the form prescribed by the
bureau. If the additional security is in the form of a letter of credit, the
letter of credit must be provided by a federally insured financial institution.
The penalized amount of such additional security is to be fixed by the
administrator of workers' compensation.
(F) The surety bond or additional security
furnished by the employer shall be for an amount and period as established by
the bureau and may be periodically reviewed and reevaluated by the bureau. The
surety bond or additional security shall provide on its face that the surety
shall be responsible for the payment of all claims where the cause of action,
as determined by the date of injury or date of occupational disease, arose
during the liability of the surety bond or additional security. The liability
under the surety bond or additional security and the rights and obligations of
the surety shall be limited to reimbursement for the amounts paid from the
surplus accounts of the state insurance fund by reason of the default of the
self-insuring employer in accordance with division (B) of section
4123.82 of the Revised Code;
however, in the event of such self-insuring employer's default, the bureau
shall first seek reimbursement from the surety bond or additional security,
which shall be first liable and exhausted, before payment is made from the
self-insuring employers' guaranty fund established under section
4123.351 of the Revised Code.
Upon default of the self-insuring employer, it shall be the responsibility of
the administrator of workers' compensation to represent the interests of the
state insurance fund and the self-insuring employers' guaranty fund. The
administrator of workers' compensation, on behalf of the self-insuring
employers' guaranty fund, has the rights of reimbursement and subrogation and
shall collect from a defaulting self-insuring employer, or other liable
persons, all amounts the bureau has paid or reasonably expects to pay from the
self-insuring employers' guaranty fund on account of the defaulting
self-insuring employer.
(G) The
security herein required to be given by the employer shall be given to the
state of Ohio, for the benefit of the disabled employees or the dependents of
deceased employees of the employer filing the same, and shall be conditioned
for the payment by the employer of such compensation to disabled employees or
the dependents of deceased employees of such employer, and the furnishing to
them of benefits equal to or greater than is provided by the Ohio workers'
compensation law and for the full compliance with the rules, regulations, and
procedures of the industrial commission and the bureau.
(H) If another or parent corporation or
entity owns fifty per cent or more of the stock of an employer, the bureau may,
in its discretion, require the employer to furnish a contract of guaranty
executed by the ultimate domestic parent corporation or entity. The bureau
shall require an alternative form of security if it does not require a contract
of guaranty executed by the ultimate domestic parent corporation or
entity.
(I) Employees having one or
more years of experience as a workers' compensation administrator for a
self-insuring employer in Ohio shall be deemed sufficiently competent and
knowledgeable to administer a program of self-insurance. A self-insuring
employer that employs a workers' compensation administrator who have less than
one year of experience as a workers' compensation administrator in Ohio shall
not have its status as a self-insuring employer affected pending notification
by the bureau as to whether mandatory attendance of the employer's workers'
compensation administrator at a bureau training program is required. If the
bureau determines that the employer's workers' compensation administrator is
not able to administer a self-insuring program, the bureau may direct mandatory
attendance of the employer's workers' compensation administrator at a bureau
training program until such time as the bureau determines that the employer's
workers' compensation administrator is sufficiently competent and knowledgeable
to run such a workers' compensation program. The cost of the bureau's training
of the workers' compensation administrator(s) under this rule will be borne by
the self-insuring employer or self-insuring employer applicant. By accepting
the privilege of self-insurance, an employer acknowledges that the ultimate
responsibility for the administration of workers' compensation claims, in
accordance with the law and rules of the bureau and the industrial commission,
rests with that employer. The self-insuring employer's records and compliance
with the bureau and the industrial commission rules shall be subject to
periodic audit by the bureau.
A self-insuring employer or applicant shall designate one of
its Ohio employees who is knowledgeable and experienced with the requirements
of the Ohio Workers' Compensation Act and rules and regulations therein, as
Ohio administrator of its self-insuring program. This rule is not intended to
prevent the hiring of an attorney or representative to assist the employer in
the handling and processing of workers' compensation claims. The requirement
for an Ohio administrator may be waived at the discretion of the bureau. The
name and telephone number of the Ohio administrator, or non-Ohio administrator
where the Ohio requisite has been waived, shall be posted by the employer in a
prominent place at all the employer's locations. The Ohio administrator's
duties shall include, but not be limited to:
(1) Acting as liaison between the employer,
the bureau, and the industrial commission, and providing information to the
agency upon request;
(2) Providing
assistance to claimants in the filing of claims and applications for
benefits;
(3) Providing information
to claimants regarding the processing of claims and the compensation and
benefits to which claimants may be entitled, including eligibility and filing
requirements;
(4) Providing the
various forms to be used in seeking compensation or benefits;
(5) Accepting or rejecting claims for
benefits; and
(6) Approving the
payment of compensation and benefits to, or on behalf of, claimants, pursuant
to paragraph (L) of this rule.
(J) Employers that are granted the privilege
of paying compensation and benefits directly, in accordance with these rules
and regulations, shall:
(1) File with the
bureau via the bureau's website a report of paid compensation annually on or
before the last day of February each year;
(2) Maintain a record of all injuries and
occupational diseases resulting in more than seven days of temporary total
disability or death occurring to its employees and report the same to the
bureau upon forms to be furnished by the bureau; and
(3) Observe all the rules, regulations, and
procedures of the industrial commission and the bureau with reference to
determining the amount of compensation and benefits due to the disabled
employee or the dependents of deceased employees, and payment of the
same.
(K) If a
self-insuring employer fails to timely file its annual report of paid
compensation, the bureau may estimate the amount of paid compensation and
assess the employer based on this estimate pursuant to rule
4123-17-32 of the Administrative
Code. If the employer subsequently provides the bureau with actual paid
compensation figures, the bureau shall adjust the paid compensation and any
assessment accordingly. A self-insuring employer that is no longer a
self-insuring employer in Ohio and has failed to timely file a report of paid
compensation shall be subject to this rule.
(L) Minimal level of performance as a
criterion for granting and maintaining the privilege to pay compensation and
benefits directly.
(1) The employer must be
able to furnish or make arrangements for reasonable medical services during all
working hours. A written explanation of what arrangements have been made or
will be made to provide medical treatment shall be supplied with the
application for self-insurance.
For an employer desiring to be first granted the privilege of
self-insured status, the employer shall provide to the bureau for the bureau's
approval the employer's plan for the following:
(a) Criteria for the selective contracting of
health care providers;
(b) Plan
structure and financial stability for the medical management of
claims;
(c) Procedures for the
resolution of medical disputes between an employee and the employer, an
employee and a provider, or the employer and a provider, prior to an appeal
under section 4123.511 of the Revised
Code;
(d) Upon the request of the
bureau, provide a timely and accurate method of reporting to the administrator
of workers' compensation necessary information regarding medical and health
care service and supply costs, quality, and utilization; and,
(e) Provide an employee the right to change
health care providers.
(2) The employer shall promptly pay the fees
of outside medical specialists to whom the industrial commission or the bureau
shall refer claimants for examination or where the industrial commission or the
bureau refers the claim file for review and opinion by such specialist except
as provided by law in cases where the claim was subsequently disallowed. Such
fees shall be paid within the time limits provided for payment of medical bills
under paragraph (L)(5) of this rule.
(3) Every employer shall keep a record of all
injuries and occupational diseases, including contested or denied claims, and
shall report all claims with more than seven days of total disability or death,
including contested or denied claims, to the bureau and to the employee or the
claimant's surviving dependents in accordance with rule
4123-3-03 of the Administrative
Code. For all claims reported to the bureau, the employer shall electronically
update and report the allowed conditions on the bureau's website within
fourteen days of the employer's acceptance of a condition or following the
appeal period of the final administrative order if the condition was contested.
Claims resulting in seven days or less of total disability shall be reported to
the employee.
(4) The employer
shall provide to the claimant and upon request, shall file with the bureau or
the industrial commission, medical reports relating thereto and received by it
from the treating physician and physicians who have seen the claimant in
consultation for the allowed injury or occupational disease, or any injury or
occupational disease for which a claim has been filed. The claimant shall
provide to the employer and, upon request, shall file with the bureau or the
industrial commission, medical reports relating thereto and received from the
treating physician and physicians who have seen the claimant in consultation
for the allowed injury or occupational disease or any injury or occupational
disease for which a claim has been filed. The claimant shall honor the
employer's request for appropriate written authorization to obtain medical
reports to the extent that such reports pertain to the claim.
(5) Within thirty days after receipt of a
hospital, medical, nursing, or medication bill duly incurred by the claimant,
the employer shall either pay such bill, or if the employer contests any of
such matters, shall notify the provider, the employee, and, only upon request,
the bureau or industrial commission in writing. Such written notice shall
specifically state the reason for nonpayment. The employer's notification to
the employee shall indicate that the employee has the right to request a
hearing before the industrial commission. If the matter is heard by the
industrial commission, the employer shall pay compensation and benefits due and
payable under an order as provided by section
4123.511 of the Revised Code.
Payments issued more than fourteen days from receipt of an order allowing
compensation will be considered non-compliant with this requirement. If the
employer allows a claim for benefits and compensation without a hearing, the
employer shall pay such benefits and compensation no later than twenty-one days
from acquiring knowledge of the claim or the claimant's filing of the C-84
form, whichever is later.
(6) The
employer shall acknowledge a written request for a change of physicians within
seven days of receipt of the request that includes the name of the physician
and proposed treatment. The employer may advise the injured worker of an
impractical situation concerning the injured worker's choice of physician, such
as the provider is retired, is deceased, is no longer licensed, is under
license suspension, is incarcerated, has affirmatively refused to treat the
claimant or serve as the physician of record, is not a physician as defined in
paragraph (P) of rule
4123-6-01 of the Administrative
Code, or is otherwise unavailable to treat the claimant. The employer cannot impede the claimant's freedom to
choose a treating physician for the allowed conditions in the claim.
(7) The employer shall approve or deny a
written request for treatment within ten days of the receipt of the request.
The employer cannot deny a treatment request, or contest payment of any bill
for the treatment, if the employer did not respond within ten days of receipt
of the treatment request. The employer cannot deny a treatment request, or
contest payment of any bill for the treatment, if the employer did not respond
within ten days of receipt of the treatment request.
(8) The employer shall make its records and
facilities available to the employees of the bureau at all reasonable times
during regular business hours. A public employer shall make the reports
required by section 4123.353 of the Revised Code
available for inspection by the administrator of workers' compensation and any
other person at all reasonable times during regular business hours.
(9) The employer shall pay all compensation
as required by the workers' compensation laws of the state of Ohio. By becoming
self-insured, the employer agrees to abide by the rules and regulations of the
bureau and the industrial commission and further agrees to pay compensation and
benefits subject to the provisions of these rules. The employer shall proceed
to make payment of compensation or benefits without any previous order from the
bureau or the industrial commission and shall start such payments as required
under the Workers' Compensation Act unless the employer contests the claim. The
employer may allow for compensation payments to be available through debit
card, electronic funds transfer, or direct deposit with the claimant's
authorization.
(10) The employer
may notify the bureau's medical section and the claimant at least sixty days
prior to the completion of the payment of two hundred weeks of compensation for
temporary total disability with the request that the claimant be scheduled for
examination by the medical section. Payment of temporary total disability
compensation after two hundred weeks shall continue uninterrupted until further
order of the industrial commission up to the maximum required by law, unless
the claimant has returned to work, or the treating physician has made a written
statement that the claimant is capable of returning to his former position of
employment or has reached maximum medical improvement or that the disability
has become permanent, or, after hearing, an order is issued approving the
termination of temporary total disability compensation.
(11) Upon written request by the claimant or
claimant's representative, the employer shall make available for review all the
employer's records pertaining to the claim. Such review is to be made at a
reasonable time, not to exceed three business days, and place. The claimant,
upon written request, shall provide the employer or its representative with an
appropriate written authorization to obtain records pertaining to the
claim.
(12) Upon written request by
the claimant or claimant's representative, the employer shall provide copies of
the employer's records pertaining to the claim within three business days.
Extensions may be granted to the employer, but not to exceed fourteen days from
the date of the request, with agreement of the claimant or claimant's
representative. An employer may provide copies in electronic form, or through
electronic access to the records, with agreement of the requesting party.
Except as provided for in this rule, an employer may not assess a fee or charge
the claimant or the claimant's representative for the cost of providing a copy
of the employer's records pertaining to the claim. Where the employer has
previously provided a copy of the record or records pertaining to the claim to
the claimant or the claimant's representative, the employer may charge a fee
for the copies. The employer's fee shall be based upon the actual cost of
furnishing such copies, not to exceed twenty-five cents per page.
(13) The employer shall inform a claimant,
and the bureau, in writing, within thirty days from the filing of the claim
with the employer, as to what conditions the employer has recognized as related
to the injury or occupational disease and what conditions, if any, the employer
has denied. The same timeframe applies to medical only claims.
(14) The employer shall post notices of its
self-insuring status indicating the location for the filing of a claim and the
job title and department of the employees designated by the employer to be the
person or persons responsible for the processing of workers' compensation
claims.
(15) A public employer,
except for a board of county commissioners described in division (G) of section
4123.01 of the Revised Code, a
board of a county hospital, or a publicly owned utility, who is granted the
status of self-insuring employer pursuant to section
4123.35 of the Revised Code
shall comply with the section
4123.353 of the Revised
Code.
(16) A self-insuring employer
is prohibited from entering into a professional employer organization agreement
as defined in section
4125.01 of the Revised Code, or
an alternate employer organization agreement as defined in section
4133.01 of the Revised Code, as
a client employer.
(M)
If a state insurance fund employer or a succeeding employer, as described in
rule 4123-17-02 of the Administrative
Code, applies for the privilege of paying compensation and benefits directly,
by transferring from the state insurance fund to self-insurance, the actuary of
the bureau shall determine the amount of the liability of such employer to the
bureau for its proportionate share of any deficit in the fund. To determine an
employer's liability under this rule, the actuary of the bureau shall develop a
set of factors to be applied to the pure premium paid by an employer on payroll
for a seven-year period, as described in this paragraph. The factors shall be
based on the full past experience of the industrial commission and the bureau
as reflected in the most recent calendar year end audited combined financial
statement of the industrial commission and the bureau, and shall also
accommodate any projected change in the financial condition of the fund for the
current calendar year, or any additional period for which an audited combined
financial statement is unavailable. The factors shall be revised annually
effective July first based on the most recent calendar year audited combined
financial statement and the projected change in the financial condition of the
fund in the current calendar year or any additional period for which an audited
combined financial statement is unavailable. The annually revised factors shall
be adopted by rule
4123-17-40 of the Administrative
Code. Factors effective July first of each year shall apply to all applications
for self-insurance filed on or after July first of that year through June
thirtieth of the following year. The revised factors shall be applied to the
pure premium paid by the employer on payroll for the seven calendar accident
years ending December thirty-first of the year preceding the year in which the
factors are adopted under rule
4123-17-40 of the Administrative
Code. In the event the audited combined financial statement of the industrial
commission and the bureau reveals that no deficit exists, or in the event the
application of the factors adopted by rule
4123-17-40 of the Administrative
Code yields a negative number, the employer will incur no liability under this
paragraph, but will not receive any refund for prior premiums paid except for
those matters specifically addressed in paragraph (M)(2) of this rule. As used
in this rule, "pure premium paid" means premiums actually paid under a base
rating plan or an experience rating plan and minimum premium paid under a
retrospective rating plan. It does not include premiums billed for actual
claims costs, including reserves at the end of ten years, under a retrospective
rating plan. Obligations under a retrospective rating plan remain the
responsibility of the employer regardless of the employer's status. The same
principles shall apply to cases of a merger by a self-insuring employer and a
state insurance fund employer under the self-insuring employer's status. In
addition, the following provisions shall apply:
(1) Within thirty days of the receipt from
the employer of the necessary forms and of a separate statement of assets and
liabilities, the bureau will forward to the employer a letter stating the
amount of liability (if any) due the state insurance fund as outlined in this
rule and a copy of the computation of such liability (if any).
(2) Within thirty days of the date of mailing
of the letter by the bureau as outlined in paragraph (M)(1) of this rule, the
employer shall reply by a letter, acknowledging that the employer agrees with
the amount of liability specified in the letter and that there are no protests
or claims hearings pending which could affect the amount of the liability. If
any such matters are pending and would affect the liability, they must be
detailed and set forth in the letter from the employer. This letter must also
acknowledge that any protest letters, applications for
disability relief as provided in section
4123.343 of the Revised Code, or
other requests affecting the employer's state fund insurance experience filed
subsequent to the date of this letter shall be considered invalid for both
rebate of premium on state insurance fund experience and the calculation of
liability cited in this rule. This letter must also specify the suggested
effective date of the transfer to self-insurance which the employer requests,
subject to paragraph (B) of this rule which requires that the effective date
must be at least ninety days after the date the application forms are received
by the bureau. Failure to comply with the requirements set forth herein shall
terminate further consideration of the application.
(3) Subsequent to the approval of the
employer's self-insured status and the effective date thereof by the
administrator of workers' compensation, the bureau shall issue a settlement
sheet statement containing the adjustment required above and billing for an
advance deposit as required by other rules of the bureau. The employer shall
pay the amounts required by this paragraph, pay the contribution to the
self-insuring employers' guaranty fund under section
4123.351 of the Revised Code,
submit a performance surety bond or additional security, if required by the
bureau, and estimated final payroll report as a state insurance fund employer,
all within thirty days of the date of the mailing of the self-insured
certificate.
(4) The final
adjustments of all premiums due the state insurance fund for the final payroll
reports and final bureau audit, if any, as well as the pending protests
letters, applications for
disability relief as provided in section
4123.343 of the Revised Code, or
other requests affecting the risk's state insurance fund experience as
specified in paragraph (M)(2) of this rule, shall all be settled and paid
within six months from the date of transfer from the state insurance fund to
self-insured status. Employer's records must be made available promptly for
final audit which must also be completed within six months from the date of the
transfer from the state insurance fund to self-insurance.
(N) If there is any change involving
additions, mergers, deletions of entities, or ownership changes of a
self-insuring employer, which would materially affect the administration of the
employer's self-insuring employer program or the number of employees included
in such program, the employer shall notify the bureau's self-insured department
within thirty days after the change occurs. Based upon the information provided
or additional information requested by the bureau, the bureau will determine
the effect of the change on the employer's self-insuring employer status, the
adequacy of the employer's contribution to the self-insuring employers'
guaranty fund, and the need for additional security.
(O) If a public employer granted the
privilege of self-insurance elects to provide coverage for volunteers and
probationers performing services for the political subdivision, the employer
shall include such volunteers and probationers as employees to be covered under
the self-insurance policy. A public employer's coverage of a work-relief
employee under Chapter 4127. of the Revised Code shall be included in the
public employer's self-insurance policy.
(P) If a self-insuring employer or applicant
elects to secure excess loss coverage which undertakes to indemnify a
self-insuring employer against all or part of such employer's loss as provided
for in division (B) of section
4123.82 of the Revised Code,
that self-insuring employer or applicant shall:
(1) Name the bureau as a beneficiary to the
excess loss coverage contract in the event the bureau takes over administration
and payment of the claims of the self-insuring employer or applicant;
(2) Provide a complete copy of the excess
loss coverage contract, including the declaration page, to the bureau's
self-insured department; and
(3) In
the event of default by the self-insuring employer or applicant, the excess
loss coverage must indemnify the bureau for all compensation, benefits, and
disabled workers' relief fund costs incurred on claims covered by the excess
loss coverage contract.
(Q) If a self-insuring employer or applicant
elects to secure excess loss coverage which undertakes to indemnify a
self-insuring employer against all or part of such employer's loss as provided
for in division (B) of section
4123.82 of the Revised Code,
this election cannot be used to satisfy any security requirements of
self-insurance as provided in sections
4123.35 and
4123.351 of the Revised
Code.
