CompNotes FALL Also in this issue: Private Employers 2015 Group Rating Deadline is Next Month! Education & Training. 4 Unemployment Updates

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1 CompNotes FALL 2015 A PUBLICATION OF COMPMANAGEMENT Private Employers 2015 Group Rating Deadline is Next Month! Has your organization finished your enrollment for group rating participation for the 2016 policy year? If not, do not waste another minute. The deadline for enrollment is less than one month away! 2 Also in this issue: Education & Training For the 2016 policy year, the enrollment deadline is Monday, November 23, In order for CompManagement to timely file all enrollment information with the Ohio Bureau of Workers Compensation (BWC), we request that your re-enrollment materials be received by our office on or before November 16, Don t miss your opportunity to save up to 53% (maximum discount allowed by BWC) off of your annual workers compensation premium. 4 Unemployment Updates 6 BWC Updates 8 Public Employers - Prospective Billing Update 10 Employer Spotlight If you are reviewing savings quotes from other group administrators, please make sure that you are examining them thoroughly to ensure that you are comparing similar discounts and service offerings. This important decision affects how much you pay in workers compensation premiums, as well as who will be handling any claims incurred by your injured employees. If your organization is not eligible for Group Rating for the 2016 policy year, there are other premium discount options available (Group Retrospective Rating, Individual Retrospective Rating, EM Cap, One Claim, etc.) that offer a variety of discounts and may be compatible with other programs for potentially larger savings. Our experienced colleagues are able to pinpoint the greatest savings discount for which your organization is eligible. We encourage you to explore your best option with one of our representatives to see how your organization can realize your maximum savings for For more news & information connect with us! (800) FAX: (866) Please contact CompManagement at (800) , select option 3 and speak to a customer support representative as soon as possible. To wrap up your re-enrollment today and pay online, please click on the button below. CompNotes is a quarterly newsletter of CompManagement and is provided for general information purposes. Articles should not be construed as legal advice. Consult with an attorney or other appropriate professional for questions regarding any of the topics included in this publication. CompManagement PO Box 884 Dublin, OH (614) (800) CompManagement All Rights Reserved.

2 Education/Training Upcoming Safety Academy Sessions CompManagement s Safety Academy courses provide you with compliance programs to meet OSHA s core regulatory standards, while also equipping you with industry-specific and safety oriented tools to reduce occupational incidents and eliminate physical hazards. Sessions scheduled for the remainder of 2015 include: Session Date Start Time Transitional Work Program...A Win Win for Employers and November 5 10:00 am (est/edt) Employees - 1-hour session. Webinar only. Safety Strategies for Claim Prevention, Job Safety Analysis and November 12 10:00 am (est/edt) Accident Investigation - 1-hour session. Webinar only. Hazard Communication (HAZCOM) GHS - 2-hour session. Webinar and onsite at CompManagement s Dublin office. November 19 Webinar and onsite session will begin at 10:00 am (est/edt) Driver Safety - 1-hour session. Webinar only. December 3 10:00 am (est/edt) For full descriptions of each course, please click here. REGISTRATION Click here to register online. For the two (2) hour class, registration is $50 per person per class for CompManagement clients and $75 per person per class for non-clients. For the one (1) hour classes, registration is $25 per person per class for CompManagement clients and $50 per person per class for non-clients. If you have any questions regarding registration, please contact Cassy Taylor via at Cassy.Taylor@sedgwick.com or via phone at (800) , extension

3 Client Education Programs Upcoming Webinar Sessions - Workers Compensation Session Date Session Start Time Private Employers: Selecting the Best Rating Program Nov 4 1:30 pm (est/edt) - private employers Workers Compensation An introduction to Ohio Dec 8 10:00 am (est/edt) - all employers Public Employers: Understanding BWC Transition to Prospective Billing Dec 15 10:00 am (est/edt) - public employers For a full description of each course, please click here. All client education programs listed above are offered at no charge to current clients of CompManagement. REGISTRATION Registration for our Client Education Program webinar sessions is easy! Simply send an to: seminarrsvp@sedgwickcms.com. Be sure to indicate the following: company name, BWC policy number, session name, session date, name(s) of those wishing to attend and an address for each person attending. All sessions are approximately 60 minutes in length. Upcoming Webinar Session - Unemployment Compensation Session Date Session Start Time Taxes & Rating (UC 401) November 11 1:30 pm (est/edt) For a full description of the course, please click here. The client education program listed above is offered at no charge to current clients of CompManagement. REGISTRATION Registration for our Client Education Program webinar sessions is easy! Simply send an to: ucwebinars@sedgwickcms.com. Be sure to indicate the following: company name, session name, session date, name(s) of those wishing to attend and an address for each person attending. All sessions are approximately 90 minutes in length. 3

4 Unemployment Updates How are Unemployment Tax Rates Determined? There are different methods that states currently use to determine unemployment tax rates for individual employers. All states use some form of experience rating that is based upon the individual employer s past history. However, the methodology and number of years included in the calculations can differ by state. Most states, including Ohio, use what is called a Reserve Ratio form of experience rating. Under the Reserve Ratio method, the state compares taxes paid by the employer to benefit payments made to claimants that are chargeable to the given employer. In Ohio, an employer becomes eligible for experience rating once their account has been chargeable with benefits for four consecutive calendar quarters ending June 30th. The employer becomes eligible for an experience rate beginning with the next calendar year. Prior to becoming experience rated, Ohio charges employers a New Employer rate which differs for construction and nonconstruction industries. The three factors that are included in the experience calculation are taxable wages reported, contributions paid (including voluntary payments) and benefits charged. Unemployment taxes that have been paid are credited to an employer s account. Whereas, unemployment benefits paid to eligible claimants are charged to the accounts of the employers that are within the base period of the claim. These factors are recorded on the employer s account and are used to compute the annual tax rate after the employer becomes eligible to be experience rated. Ohio uses three (3) years of tax payments and benefit charges in order to determine an employer s tax rate. Taxable employers in Ohio also pay a Mutualized Rate which is used to fund the states mutualized account. The primary purpose of the mutualized account is to maintain the unemployment trust fund at a safe level and to recover the costs of unemployment benefits that are not chargeable to individual employers. These costs are recovered and the money restored to the fund through the mutualized tax levied on all contributory or tax paying employers. It is important to review your tax rates every year to ensure they are calculated accurately and to budget for any changes in rates for the upcoming year. Source: 4

5 5 Unemployment Tax Season Has Arrived Evaluate Your Options! Unemployment tax season is upon us and now is the time to evaluate your unemployment tax options for Unemployment tax paying Ohio employers should be receiving their unemployment tax rate notices by December 1st for the upcoming policy year. Ohio offers a couple of options that can be used to reduce an employer s unemployment tax contribution rate. They are: Voluntary Contributions: Employers that are experience rated are eligible to make a voluntary contribution that will lower their tax rate in the upcoming year. Paying a predetermined amount up front lowers the tax rate to the next lowest rate. However, this option is not always advantageous and needs to be evaluated carefully. Common Rating: If two or more entities have at least 51% common ownership, they can apply to be commonly rated. If common rating is selected, the Ohio Department of Jobs and Family Services (ODJFS) will calculate a combined tax rate. Some employers in the common rating group may pay more and others may pay less than their individual experience rate. The goal with common rating is to have an overall net savings. As with voluntary contributions, this option should be evaluated carefully to determine whether or not common rating makes financial sense and to determine the best group(s) to form. The deadline for electing either option is December 31, For our unemployment customers, as part of our standard services we can help you evaluate both options. If you are a current unemployment client and wish to consider either option, please send a copy of your annual tax notice to Roger Baker at: Fax: (614) roger.baker@sedgwick.com If you are a CompManagement workers compensation client and want to have us help evaluate your options, please contact Roger at (614)

6 BWC Updates Loss Conversion Factors - Individual Retrospective Rated Employers As announced last year, the Bureau of Workers Compensation (BWC) instituted a Loss Conversion Factor (LCF) to capture corrected administrative expenses for employers participating in the Individual Retrospective Rating Program. The LCF was to be phased-in over a 3-year period. The following schedule was approved at BWC s September Board Meeting which will complete the phase-in. The LCF will continue to be reviewed and set each year. Private Employers: July 1, 2015 June 30, 2016 LCF = July 1, 2016 June 30, 2017 LCF = July 1, 2017 June 30, 2018 LCF = Public Employers: January 1, 2016 December 31, 2016 LCF = January 1, 2017 December 31, 2017 LCF = January 1, 2018 December 31, 2018 LCF = The LCF will be applied to the claim costs that occur for the program year, which will be reflected in the annual retrospective rating claims invoice. The introduction of the LCF will increase the cost of participating in Individual Retrospective Rating. In order to ensure that our clients have the complete cost picture, last year, CompManagement began including the LCF in the retrospective program analysis that we complete for our clients during the annual individual retrospective rating enrollment selection process. For questions relating to these changes, please contact your CompManagement Rate Analyst at (800) Public Employers November 30, Important Dates Private Employers November 23, 2015 Application deadline for Group Rating for the July 1, 2016 rating year January 29, 2016 December 1, 2015 December 31, 2015 Application deadline for Drug Free Safety (DFSP), Industry Specific Safety (ISSP) and Transitional Work Bonus (TWB) Programs for the 1/1/2016 rating year Deadline for Individual Retrospective rated employers to file settlement applications for inclusion on their next retrospective rating bill Deadline for group employers (rating & retro) with a claim in the green period to attend 2 hours of BWC approved safety training or complete BWC s online accident analysis form and safety class December 31, 2015 Deadline for employers participating in the ISSP to have completed their loss prevention activities (1-3 activities based on payroll) December 31, 2015 December 2015 January 31, 2016 January 31, 2016 January 31, 2016 February 15, 2016 Application deadline for Deductible Program, Group Retrospective Rating, Individual Retrospective Rating and One Claim Program for the July 1, 2016 rating year Deadline for employers participating in the One Claim Program (OCP) to complete their safety education requirement BWC sends payroll reports for the 1/1/2015 to 12/31/2015 payroll period (final retrospective billing) and the 1/1/2016 to 12/31/2016 notice of estimated annual premiums (first prospective billing) DFSP accident analysis training deadline; new supervisors have 60 days from hire date to complete DFSP online safety management self-assessment (SH-26) deadline ISSP onsite consultation survey (SH-29) deadline Last date to submit C-240 (settlement application) to be applied on the 2017 experience

7 Public Employer Rates Announced The Bureau of Workers Compensation (BWC) Board of Directors has approved the following 2016 rates for public employer taxing districts. The rates reflect a 9.0% overall premium level decrease for the 1/1/2016 to 12/31/2016 payroll year, payable in May and September of NCCI Manual Description 2015 Base Rate* 2016 Base Rate* 9430 Counties Cities Villages Townships Local School Districts Public Libraries Special Public Universities Joint Vocational Schools Public Work Relief Employees Public Emergency Service Organizations Public Hospitals Special Public Institutions Public Transit Authorities Special Public Authorities *Rates are based per $100 of payroll In addition to these rate changes, BWC has eliminated the Disabled Workers Relief Fund (DWRF) assessment for the 2016 rating year (previously was set at $0.06 per $100 of payroll). This fund provides cost of living increases to injured workers receiving PTD (Permanent Total Disability) benefits with dates of injury prior to This reduction was made possible based on a statutory change that now allows the State Insurance Fund to cover the costs of these claims. (Note the DWRF II assessment, to cover claims after 1/1/1987, did not change and remains at zero.) Coverage Update: Volunteer Corporate Officers of Nonprofits New legislation went into effect on September 29, 2015 that will impact nonprofit organizations. Effective September 29th, unpaid corporate officers of nonprofit organizations are no longer characterized as employees for workers compensation purposes. As a result, nonprofits no longer need to report payroll and pay premium for unpaid officers. Even though the change was officially effective on September 29th, the Bureau of Workers Compensation (BWC) will be applying this change retroactively to July 1, 2015, the start of the current policy year. Historically, under Ohio Law corporate officers, whether paid or unpaid, had been considered employees. Therefore, nonprofits were required to report minimum payroll to Ohio Bureau of Workers Compensation (BWC) (in excess of $22,000 per year) and pay premium to cover even their volunteer corporate officers. Under the new legislation, true volunteer officers of nonprofit corporations are no longer considered employees, and therefore are no longer subject to mandatory workers compensation coverage. This much-needed law change removes an unnecessary financial burden on Ohio s nonprofits. This change frees up more money for nonprofit organizations to provide services that help local communities throughout the state. However, if a nonprofit desires coverage for its corporate officers, it need only report some amount of remuneration to the officer who will no longer be considered a volunteer. This employee is then subject to minimum and maximum officer reporting requirements. With BWC s change to prospective billing, the current premium installments that nonprofits are being invoiced currently include payroll for volunteer corporate officers. This can be corrected now by contacting BWC at (800) to update your payroll estimates, thus reducing your premium installments, or when filing the annual payroll true-up in August of

8 Prospective Billing - Public Employers It s Coming Public Employers January 1st Prospective billing starts January 1, 2016 for public employers. Are you ready? In the month of December, public employers (cities, counties, schools, libraries, conservancy districts, etc.) will receive their notice of estimated annual premium from the Ohio Bureau of Workers Compensation (BWC) which is based on reported payroll for January 1, 2014 to December 31, (see example on next page) This notice is not a bill. It is just an estimate of premium to be paid. Please review your estimate of premium notice for accuracy. BWC has based your estimated premium on payroll amounts that you previously provided to them. If you believe the payroll amount is incorrect, or if you anticipate a change in operations that will affect your payroll for the policy period beginning January 1, 2016, please notify BWC by calling (800) In addition to the notice of estimated annual premium, BWC will include your Certificate of Coverage. If the certificate was not included, it means your coverage is lapsed. Contact BWC immediately to correct as a lapsed policy will also impact your transition credits. Transition credits will not be granted to employers with lapsed coverage. Also included in the mailing from BWC in December will be your 2015 payroll report. The payroll report must be filed with BWC along with at least 50% of the premium due by May 16, In March, employers will receive their first prospective installment invoice for the 2016 policy year. BWC will also apply a 50% transition credit to this policy year. BWC is discounting both premiums due by 50% to help ease the transition into prospective billing. The first prospective installment is due May 16, The rest of your premium for both 2015 and 2016 policy years will be due by September 1, If you have any questions once you have received your estimate of premium notice from BWC, please feel free to contact our Customer Support Unit at (800) , option 3. Our representatives are happy to assist you. 8

9 Sample Estimate of Premium Notice to be mailed by the Ohio Bureau of Workers Compensation (BWC) to all public employers in December 2015 Policy information Policy number: Employer name: Mailing address: Policy period is from 12:01 a.m. Jan. 1, 2016, to 12:00 a.m. Jan. 1, Selected installments: 2 Total estimated annual premium: $6,000 Installment schedule Due date Amount paid by employer Amount credited by BWC May 16, 2016 $1,500 $1,500 Aug. 31, 2016 $1,500 $1,500 Total policy year 2016 premium due $3,000 $3,000 Sample Breakdown of estimated premium calculation (A) (B) (A x B) Class code Experience Blended Estimated Estimated modifier (EM) rate payroll premium $541,400 $6,000 BWC pays 50% of each payment due under the Prospective Billing Transition Credit Total $6,000 *For additional rating information, visit and log on with your e-account. Estimated Premium is based on your previously reported payroll for January 1, 2014 to December 31,

10 Employer Spotlight Alliance Solutions Group Making Positive Strides as a Full Service Recruitment Firm Alliance Solutions Group (ASG) was founded in 2001 and is a family of ten specialized staffing firms, providing services to a variety of industries including scientific, healthcare, finance, manufacturing and legal. ASG was recently named a 2015 Top Workplace by the Cleveland Plain Dealer. This award is one of many the company has won over the last year, including recognition on the Weatherhead 100 list, the Crain s Fast 50 list and a spot in the Inc list of fastest-growing companies. A. Grossman ASG CEO, Aaron Grossman is very involved in the community as an Area Director for the Entrepreneur s Organization, a Mid-Market Committee member for the Greater Cleveland Partnership and a member of the Workforce Investment Board of Cuyahoga County. He was the Cleveland Society of Human Resources Management HR Partner of the Year in 2013, and is the Founder and President of the Wrestlers in Business organization. Aaron was named the Ernst & Young Entrepreneur Of The Year 2015 Award winner for the Services category in Northeast Ohio. This marks the first time in the award s 29-year history that the founder of a staffing or recruitment firm has received the honor and includes eligibility for the 2015 Entrepreneur of the Year 2015 national program. CompManagement, LLC and CompManagement Health Systems have the pleasure of working with ASG s Matt Lyon. Matt, a CPA, has been the Chief Financial Officer and a shareholder of Alliance Solutions Group since He leads all financial operations for Alliance and also supports legal and human resources matters. Just a few of Matt s accolades include Crain s 2012 CFO of the Year finalist along with being an active member of the American Institute of Certified Public Accountants, Ohio Society of Certified Public Accountants and the University of Notre Dame Alumni Association. The ASG management team approach is working as evidenced by the 2014 recognition by Crain s Cleveland Business as one of the top 10 fastest-growing companies in the region. Matt and his team have the added challenge of handling claims in the wide range of industries they place their workforce, which requires an approach that is both proactive and vigilant. The success of their program has been achieved by working closely with his teams at CompManagement and CompManagement Health Systems from challenging claims through the administrative process, continually coordinating early return to work and even settlement when appropriate. Open communication is critical in any workers compensation related matter. In the staffing industry, however, it can prove to be challenging as staffing agencies are not directly responsible for the M. Lyon safety of their employees. Communication is a focus from ASG management to their recruiters, striving for an open line of communication throughout the entire process. They focus on fervent cost containment strategies including salary continuation and transitional duty, which have been successfully and creatively managed through their 10 different brands (or industry areas). Through regular claim staffing conversations, claims management is definitely a group effort with strategy and perspectives from Alliance, the Managed Care Organization and Third Party Administrator. CompManagement values our longstanding partnership with Alliance Solutions Group and wishes them continued prosperity and growth in the years to come. 10