House Bill 493 (“HB 493”) contained several proposed changes to the current Workers’ Compensation landscape both in Ohio and outside of Ohio. The two most substantive propositions of HB 493 are: 1.) the change from a retrospective to a prospective billing system, and 2.) to define the Ohio BWC’s ability to enter into an agreement with a private insurer to provide limited other state’s coverage for Ohio employees temporarily working outside of Ohio. For the first time, the Ohio BWC is able to provide optional other states coverage and limited other states’ coverage to Ohio employers whose employees work outside of the state, through a competitive bidding process.
Currently, many states do not recognize Ohio’s workers’ compensation coverage for their employees temporarily working outside of Ohio. Ohio employers are required to obtain a separate policy from a private insurer to provide coverage to employees temporarily working outside of Ohio. HB 493 allows the Ohio BWC to enter into a fronting arrangement with a private insurance carrier to provide optional, limited other states’ coverage to Ohio employers with employees temporarily working outside of the state. Having this coverage will allow Ohio employers to show proof of coverage to insurance regulators in other states in order to avoid potentially having to pay premiums twice on wages.
Further, HB 493 enables the BWC to develop an “other-states coverage” program in order to streamline operations for Ohio domiciled employers that want to permanently expand their operations into other states. Additionally, the “other-states coverage” program enables the Ohio BWC to provide Ohio employers with coverage from a private insurer.
Both types of coverage are competitively bid, and the BWC selects at least one private insurance carrier. This private insurance carrier would provide coverage based on rates that have been approved for use by the state in question. The Ohio BWC will be able to assist Ohio employers in securing coverage for permanent operations in other states through a relationship with the contracting private insurance carrier. For simplicity purposes, the Ohio BWC will have the ability to provide one bill to Ohio employers containing both mandatory and elective coverage. HB 493 allows the Ohio BWC to provide an option and connection to a private insurance carrier for coverage for Ohio employers who may struggle to find it on their own.
NOTE: This general summary of the law should not be used to solve individual problems since slight changes in the fact situation may require a material variance in the applicable legal advice.