Workers’ Comp Insurance in Ohio Explained

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The Ohio Workers' Compensation Insurance laws require every employer with one or more employees to get and keep qualified insurance or self-insurance. Workers’ comp insurance protects your businesses’ valuable human assets. In the no-fault system, workers give up their right to sue an employer for a work-related injury or illness in exchange for the guarantee of medical care and disability pay.

Workers’ comp coverage raises employee morale and helps them focus on contributing to the company goals. Employees enjoy the security of knowing that in the event of illness or work-related injury, they and their families will have the assistance that they need.

Workers’ compensation coverage in Ohio can help businesses avoid severe penalties and enforcement actions by the state. Employers that fail or refuse to get and keep workers’ comp coverage can get civil penalties, criminal fines, and charges, up to and including serious misdemeanors, felonies, and incarceration.

Buying workers' compensation in Ohio

The marketplace does not have private or open sales of Ohio Workers' Comp Insurance.

  • OhioBWC

    The Ohio Bureau of Workers’ compensation is the government-authorized insurance provider; the OhioBWC issues all workers’ compensation insurance. Self-insurance is a corporate employer’s alternative to buying coverage from the Ohio Bureau of Workers’ compensation.

  • Self-Insurance

    Ohio permits self-insurance for large companies that can demonstrate financial strength and management capacity to administer a program of claims for compensation and medical services.

Instructions for buying

Employers must apply for workers’ compensation insurance to the Ohio Bureau of Workers’ Compensation. Every employer with one or more employees must have coverage under state law. The OhioBWC provides a convenient method to sign-up either online, by phone, or directly with a local office. You must fill out an application that requires basic information about you, your business, its finances, employee payroll, and workforce classifications. If you are interested in self-insurance, then you should do your research and get quotes from various providers before making your decision.

What you should know

Ohio is called a monopoly state; it is one of the few that provide all insurance through the public sector rather than through a private insurance company. In 1911, the government of Ohio enacted the publicly-owned structure to protect workers and their families from the impacts of job connected illnesses, injuries, and deaths. The Ohio Bureau of Workers’ Compensation is the insurer of first and last resort in the state. The OhioBWC is the sole source of insurance contract coverage for Ohio employers.

Is my business required to carry?

Your business must carry workers’ compensation coverage if it has one or more employees. The requirement is clear and firm, and the penalties for noncompliance can be severe. The law does recognize a broad group of businesses that are sole proprietors or similar to a one-person business. For these, Ohio law makes coverage optional.

Elective Coverage

Elective coverage is a special category in Ohio workers’ comp law for owners or ministers in one of some named business types. They include sole proprietors, partnerships; the LLC sole proprietor, the LLC as a partnership, corporate officers of a family farm, an incorporated individual with no employees, and any ordained or other ministers of a religious organization.

Companies in these categories have elective coverage rights under the Ohio workers’ comp statutes. They must pay premiums based on the minimum/maximum reporting requirements set by the state. They must report wages over the quarterly minimum up to the quarterly maximum. They must take the below-listed steps to get coverage.

  • Must file for coverage
  • Pay premiums based on annual or other measures of income
  • Maintain premiums
  • Follow the rules for workers’ comp employers including safety and payroll reporting

Where can I buy workers’ comp insurance?

  • 1

    Ohio workers’ comp insurance

    You can buy workers’ comp insurance in person, by phone, or online from the OhioBWC. The employer application requires a $120 processing fee.

  • 2

    Ohio self-insurance

    To qualify for self-insurance, applicants must meet the below-listed qualifications, requirements or standards.

    • Must be a large employer, most have 500 or more employees
    • Must have sufficient financial resources
    • Must have a two-year record of working with the OhioBWC
    • Demonstrate ability to manage medical care and adjust claims
    • Must provide excess liability coverage

How much does workers’ comp insurance cost?

The OhioBWC sets rates and prices for workers’ comp coverage. Insured and self-insurers get base rates for a two-year period, and then the bureau makes adjustments based on experience. Ohio uses the NCIC system for worker and occupational classifications.

What is the cost of not getting coverage?

Ohio employers that do not get workers’ comp coverage face fines, penalties and severe consequences. In the event of injury or illness to an uninsured worker, the employer at fault must pay reimbursement for all medical and wage benefits provided by the Ohio Fund.

Ohio government has a lot of tools to detect an uninsured employer and impose stiff penalties. The law authorizes fines, penalties, personal liability, and incarceration in aggravated cases. In a 2015 case, Ohio prosecuted an employer that failed to report and register her 100 employees, failed to insure them, and did not pay premiums. The employer got jail time, and more than $140,000 in costs and fines, and penalties.

For additional information on workers’ comp

Factors that impact coverage

Legal

An employer can reinstate a lapsed policy. The coverage date on reinstatement begins with the date of full compliance. For example, coverage would begin on the date that unpaid bills were paid. The coverage does not protect the period in which the employer was not in compliance.

Liability

Ohio law charges premiums from the date of the first hire of any employee. Employers pay into the state insurance fund. An employer that hires before beginning to pay premiums must pay a no-coverage penalty for the time without coverage, but not to exceed two years.

Rates

The OhioBWC sets rates for insurance and self-insurance. The OhioBWC uses a standard rate based on the occupational class and code of the occupations in the employer’s workforce. The OhioBWC uses the two-year period to establish a modified experience rating specific to the employer. The mod rating will either penalize or credit the employer against the standard rate. Employers with above-average rates of claims and losses will likely get a penalty in the form of higher rates. Those with safety programs and lower than average incidents will likely get a credit against the standard fee and pay less than before.

Other Helpful Tips

The Ohio Government offers no-cost consultations to employers to improve safety with the goal of reducing risks for injuries, and illnesses. The service includes both onsite and remote consultation.

Conclusion

The Ohio Workers' Comp Insurance menu for employers is short, but it's definitely effective. Employers can buy insurance in the state-run store or fend for themselves through self-insurance with liberal allowance for private sector assistance from third-party administrators. Many large companies use self-insurance to save, retain control, and provide high-quality coverage for their employees. The state's enforcement is strict and active; employers should get covered before the first hire.

Sources:

  • Ohio Bureau of Workers’ compensation
    https://www.bwc.ohio.gov/Default.aspx

  • Elective Coverage for Businesses and Owners
    https://www.bwc.ohio.gov/basics/guidedtour/generalinfo/empgeneralinfo16.asp