Focus on Savings: Group Experience Rating

Save on premiums and gain an advocate

Saving you money and assisting with claims management is all in a day’s work for your third-party administrator (TPA). Your company’s advocate in the workers’ compensation process, TPAs aren’t a requirement for employers but a successful TPA partnership can lead to less stress and premium-cost savings for your company. One of the most valuable cost containment strategies that your TPA can offer you access to is a group experience rating program.

Group experience 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.

Benefits of participation

Participation in a group experience rating program can allow you to see significant premium rate reductions. This discount varies by group but can be as much as 53 percent off the base rate. While your coverage is still through the Bureau of Workers’ Compensation (BWC), BWC does not form the groups.

Eligibility for participation

The BWC requires companies interested in participating in group experience rating, to meet the following criteria:

Be current on any and all undisputed premiums, administrative costs, assessments, fines and monies due to any BWC administered fund as of the eligibility determination date.
Not have cumulative lapses in workers’ compensation coverage in excess of 40 days within the 12 months preceding the eligibility determination date.
Report actual payroll for the preceding policy year and pay any premium due upon reconciliation of estimated premium and actual premium for that policy year.
The employer’s main operating manual classifications as determined by the premium obligations for the rating year beginning two years prior to the coverage period are assigned to the same or similar industry groups, as determined by appendix B to rule 4123-17-05 of the OAC.

How it works

The BWC treats the group of companies participating in a group experience rating program as one large company, rather than looking at each company individually. The group experience rating plan is an annual plan and ratings are recalculated each policy year.

Employers pay their premium based upon the reduced rate achieved through participation in group experience rating. The group’s rate is determined by the BWC by calculating the experience modifier using the combined experience of all members of the group.

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. Your TPA is your business’ advocate in workers’ compensation, helping you save money and providing 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.