Workers' Compensation

Best Cost Containment Strategies for Ohio TPAs

Ella Baker
Best Cost Containment Strategies for Ohio TPAs
Reading time 4 Mins
Published on Jul 3

Save on premiums and gain an advocate

Your third-party administrator (TPA) is your advocate in the workers’ compensation process. While the Ohio Bureau of Workers’ Compensation doesn’t require employers to work with a TPA, a successful TPA partnership not only leads to less stress for you when a claim is filed, it can also provide significant annual premium cost-savings for your company. By allowing your business greater access to cost containment strategies, your partnership with a TPA can often pay for itself.

Group Rating

Group experience rating programs allow employers who operate similar businesses to group together to achieve lower premium rates than they could through individual rating. Savings opportunities vary depending on claim experience, industry, and payroll history. All participants must be a member of a sponsoring organization, like a chamber of commerce. Enrollment is for one rate year only and can be renewed annually, depending on eligibility. The maximum possible discount an employer may receive is 53% for the 2018-19 rate year.

Group Retrospective Rating

The group retrospective rating program is a voluntary, performance-based incentive program for employers who practice workplace safety and effective claims management. Depending on the performance of the group, participants can earn premium refunds or receive assessments. Similar to group rating, employers are grouped together by like industries and must be members of a sponsoring organization. While enrolled, employers continue to pay their individual premiums established by the Ohio BWC. The BWC will evaluate groups and issue rebates or assessments at 12, 24 and 36 months following the end of the enrolled policy year. Group retrospective rating can offer a substantial savings opportunity for employers who do not qualify for a group rating program.

Grow Ohio Incentive Program

This program offers new Ohio businesses the chance to secure savings opportunities on their workers’ compensation premiums when they start their businesses. Employers can either join a group rating program or take an automatic 25% discount on their premium. Employers choosing to join a group rating program must be a member of a sponsoring organization. To be eligible for Grow Ohio discounts, employers must comply with BWC safety requirements.

Deductible Program

This program helps employers lower their workers’ compensation premium payments by offering upfront premium discounts in the form of a per claim deductible. It also encourages employers to focus on safety to reduce work-related injuries. Enrolled participants must demonstrate strong financial stability. When applying, employers can choose deductible levels of up to $200,000 (but cannot exceed 40% of the employer’s annual premium).

Retrospective Rating

An individual-retrospective rating plan allows employers to assume a portion of their risk in return for possible premium reductions. The larger the risk, the greater the potential for reductions in premiums. Employers with consistent claim history and excellent safety practices may be ideal candidates for this program. To be eligible, employers must have a minimum of $25,000 in estimated premium and strong financial strength and stability.

One Claim Program

Eligible employers must have a single, significant claim entering their rate experience for the first time. In addition, employers can have no more than three medical-only claims in the same experience period. Enrolled employers will receive discounts from 5% to 20%, and can participate for up to five years. All participants must re-enroll annually and participation in BWC safety programs is required.

EM Capping

EM capping is a program that caps an individual employer’s experience modifier (EM) to minimize the effects of a significant premium increase for businesses that become penalty rated. The EM cap will equal 100% of the previous year’s published EM. Participating employers must comply with BWC safety program requirements.

Employers can often reduce costs associated with their premiums by paying up to the first $15,000 in medical and pharmacy bills for medical-only claims through the BWC’s $15,000 Medical-Only Program. Participants must comply with all BWC rules regarding payment and may need to report some claims to Medicare.

Advocating for you

The Ohio BWC may not require your company to use a TPA, but the cost-savings and expertise of these groups can lead to reduced risk and lower costs for your company. Partnering with a TPA is an investment in your business’ future that can mean a safer workplace for your employees and less spent on claims administration for you. While the Bureau of Workers’ Compensation looks out for the interests of your injured employees, your TPA will help you save money and provide assistance with claims.

Learn more about Workers’ Compensation today by contacting a Sheakley WC professional. Stay up-to-date on all things Sheakley by subscribing to our blog and following us on social media. Join in the discussion by commenting below.

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