DeWine, BWC Propose $1.5B Rebate to Employers
COLUMBUS, Ohio — Strong returns on investments made by the Ohio Bureau of Workers’ Compensation could make their way to employers in the state.
Gov. Mike DeWine and BWC’s administrator and CEO, Stephanie McCloud, proposed giving $1.5 billion to Ohio employers this year. They announced the proposal Monday at Dynalab Electronic Manufacturing Services Inc. in Reynoldsburg.
“This is great news for Ohio,” DeWine said. “This money will help Ohio employers expand their businesses, create jobs and invest in capital improvements. Ohio’s economy is strong and this proposal reinforces our goal of creating more jobs in the state.”
The $1.5 billion proposal includes money for public employers — about $114 million for local governments and some $50 million for public schools, according to the governor’s office.
If approved by the BWC Board of Directors, the money would be Ohio’s fifth investment return to private and public employers of at least $1 billion since 2013 and sixth overall during that time. The agency distributed $1 billion or more to employers in 2013, 2014, 2017 and 2018, as well as $15 million in 2016 for public employers.
“Our investment portfolio is strong, our injury claims are falling, and our safety and wellness initiatives are making a difference,” McCloud said. “All of these actions mean big savings for employers and we’re delighted to share this success with them.”
State law requires businesses to carry workers’ compensation coverage to protect workers who suffer injuries or illnesses on the job. Those premiums are invested into the fund that supports injured worker claims. When investment returns are strong, the agency shares a portion of the investments with qualifying employers in the form of a dividend.
The $1.5 billion dividend equals 88% of the premiums employers paid for the policy year that ended June 30, 2018, the calendar year 2017 for public employers. BWC insures some 242,000 public and private employers.
McCloud will present the proposal Wednesday during board committee meetings. A vote follows at the board’s June 28 meeting. If approved, checks would be issued to employers in September.
BWC earned $1.3 billion in net investment income in 2018, a net return of 5.1% on assets of $26.9 billion.
In January, the BWC lowered its premium rates for public employers by 12%. Private employers will enjoy a 20% cut beginning July 1. Since 2011, the agency has saved employers nearly $10 billion in workers’ comp costs through dividends, credits, rate reductions and greater efficiencies, according to the agency.
“Small business owners, who make up the majority of state fund employers, appreciate the earlier announced base rate deduction and now the proposed rebate,” said Roger Geiger, vice president and executive director for the National Federation of Independent Business in Ohio, in a statement. “On behalf of our 22,000 members, NFIB applauds the BWC’s efforts to continue to return more of Ohio employers’ hard-earned dollars back to them. These latest proposed rebates will allow entrepreneurs to further reinvest back into their businesses to expand, hire, and enhance their workplace safety programs.”
Copyright 2023 The Business Journal, Youngstown, Ohio.