Workers’ Comp Must Pay $859.4 Million to Employers
Last week, a Cuyahoga County judge awarded $859.44 million in restitution to Ohio businesses that claim they were overcharged over an eight-year period because of inequities in the Ohio Bureau of Workers’ Compensation’s group-rating program. The ruling by Common Pleas Court Judge Richard McMonagle accepted the restitution amount submitted by attorneys for a class-action lawsuit group that numbers more than 270,000 employers, most of them small business owners.
The lawsuit, which began in 2007, said the bureau gave discounted premiums to companies that joined group insurance plans and charged companies not in the group plans excessive rates to pay for the discounts.
MIRA is currently working with CareWorks Consultants to determine which MIRA members were removed from the Group Rated Workers’ Comp Program due to claims during the period 2001 through 2009. If you fall into this category, MIRA recommends that you contact your accountant and take whatever action is necessary. If MIRA is able to identify affected members through CareWorks, you will be informed.
In December, Judge McMonagle ruled in favor of business owners who didn’t participate in the group rating program, agreeing that they had been charged unfair premiums from July 2001 to June 2009. Lawyers for the businesses argued that companies paying group rates were not charged premiums that covered their losses, which forced other companies to cover the difference. The bureau discounted its group plans as high as 90 percent.
A new fee structure took effect in July 2009, after Judge McMonagle ordered the bureau to change its system for setting premiums for injury insurance. The maximum discount set by the bureau for group plans is 53 percent.