|
Policy Name:
|
Application for Coverage (U-3)
|
|
Policy #:
|
EP-01-01
|
|
Code/Rule Reference
|
Ohio Revised Code (ORC) 4123.01; and Ohio Administrative
Code (OAC) 4123-14-01, 4123-14-02, 4123-17-02 ,4123-17-13, 4123-17-26.
|
|
Effective Date:
|
July 1, 2023
|
|
Approved:
|
Rex Blateri, Chief of Employer Services
|
|
Origin:
|
Employer Policy
|
|
Supersedes:
|
All policies and procedures regarding Application for
Coverage (U-3) and Coverage Initiation that predate the active date of this
policy.
|
|
History:
|
Revised February 7, 2024; April 25, 2019; March 5,
2019; July 22, 2016; and July 27, 2006.
|
|
Review Date:
|
July 1, 2028
|
I.
Policy Purpose
The Bureau of Workers’
Compensation (BWC) provides workers’ compensation coverage for Ohio employers.
The Application for Coverage (U-3) policy ensures an employer’s request for
coverage is processed in accordance with all applicable laws and rules.
II.
Applicability
The policy
applies to BWC Policy Processing/Underwriting, Employer Management Services,
Cash Control, Employer Call Center, Employer Compliance, private employers (PA
employers), public employer taxing districts (PEC employers), and authorized
representatives.
III. Definitions
A. Active
date of coverage: The date BWC receives a completed U-3 with the
application fee.
B. Application
fee: A nonrefundable fee of $120.00 which is equal to the minimum
administrative annual charge as set forth in OAC 4123-17-26.
C. Application
for Ohio Workers’ Compensation Coverage (U-3): Form used by an employer to
apply for workers’ compensation coverage.
D. Blended
rate: The actual rate that appears on the employer’s Estimated Annual
Premium notice and is used to calculate workers’ compensation premiums. The
blended rate is also used for the annual true-up payroll filing.
E. Coverage
initiation: BWC’s process for determining when an application for coverage
requires a new policy. A new policy will not be issued when the employer
applying for coverage is essentially the same or similar to an existing policy.
F. Elective
coverage: Optional coverage for business owners or ministers in one of the
following categories:
1.
Sole proprietor;
2.
Partnership;
3.
Limited liability company acting as a sole proprietor;
4.
Limited liability company acting as a partnership;
5.
Family farm corporate officers;
6.
Individual incorporated as a corporation AND no employees; and
7.
Ordained or associate ministers of a religious organization.
G. Experience
modification (EM): An adjustment factor applied to the base rate of the
classification code.
H. No
coverage penalty: Assessment calculated by BWC upon determination that an
employer has failed to comply with coverage requirements as set forth in ORC 4123.01(B)(1)(b).
I.
Policy number: A number assigned by BWC to an employer’s business
operations after an application has been finalized.
J. Quote
number: A temporary number assigned to an application and used for tracking
purposes.
IV. Policy
A. Application
submission.
1.
Employers must file a U-3 form with BWC:
a.
Employers may apply online at BWC’s
website.
b.
Completed applications may also be mailed to BWC or dropped off at a
local service office with a money order or check for the required application
fee.
2.
The employer must provide the following information when applying for
coverage as set forth in OAC 4123-17-13(A)(1).
a.
Legal name and business entity type, e.g., corporation, limited
liability company, sole proprietorship, or partnership;
b.
Employer address;
c.
Employer's federal employer identification number (FEIN) or, if
applicable, Social Security number (SSN);
d.
Description of employer operations, including:
i.
A description of the work done or industry pursued by the employer;
ii.
The estimated average number of employees in each kind of work; and
iii. The
estimated wages of employees in each kind of work over the next twelve (12)
months.
e.
Information related to whether the applicant for coverage has purchased
an existing business or has another associated policy;
f.
Name of the owner(s) or corporate officer(s), and when applicable for
elective coverage the name of the sole proprietor, partners, ministers, or
officers of the family farm corporation, refer to the Elective
Coverage policy for further details;
g.
Signature of the person completing the U-3 form; and
h.
A non-refundable application fee of $120.00 equal to the minimum
administrative annual charge as set forth in OAC 4123-17-26.
3.
BWC issues a policy number to the employer at the time of application
if:
a.
The employer files the U-3 online;
b.
The classification codes systematically assigned to the employer meet
the criteria for the immediate issuance of a policy number; and
c.
The employer is not an alternate employer organization (AEO), a
professional employer organization (PEO), a temporary labor services (temp or
staffing) agency, or a PEC employer.
4.
BWC assigns a temporary quote number to the employer's U-3 if the
employer does not meet the guidelines listed in section IV.A.3. This number is
used to track the application throughout the remainder of processing.
5.
Incomplete applications.
a.
BWC contacts the employer to obtain any missing information.
b.
If the employer fails to provide the required information, BWC:
i.
Will deny the employer's application as outlined in OAC 4123-17-13(A)(2);
ii.
May consider the employer as non-complying as referenced in OAC 4123-14-01(A); and
iii. May
recover premium and penalties from the employer as set forth in OAC 4123-14-02.
B. Application
evaluation.
1.
BWC reviews the application to determine if the employer has an existing
policy. The evidence considered to determine whether a new policy should be
issued includes, but is not limited to:
a.
SSN or FEIN;
b.
Business name;
c.
Pursuit of industry;
d.
Location of operation;
e.
Other Ohio workers' compensation policies and other principals
associated with all or part of the business operation;
f.
Purchase or sale agreement; and
g.
Interchange of labor.
2.
If BWC identifies an existing policy, BWC will invoke coverage
initiation and do one of the following.
a.
BWC will deny or rescind the U-3 and require the employer to maintain
the existing policy; or
b.
BWC will transfer the prior policy to the employer, and if necessary
reactivate a previously cancelled policy in order to complete the transfer,
pursuant to OAC 4123-17-02,
and require the employer to assume any outstanding obligations under the prior
policy. BWC will require the payment of outstanding obligations or the
establishment of a payment plan prior to granting new coverage. BWC may impose
other actions authorized by law which BWC deems appropriate.
3.
BWC will assign payroll to the classification codes applicable to the
duties performed.
4.
BWC will take the following action if an employer has a dishonored
application fee payment.
a.
If a policy number was issued, BWC will lapse the employer's coverage
back to the active date of coverage. The employer may reinstate coverage by
paying the application fee, however, coverage is contingent on payment of
estimated premium due.
b.
If a policy number was not issued, BWC will decline the initial U-3 and
require the employer to submit a new U-3 and application fee.
5.
Requests received from a temp agency for the allowance of up to ten
policies by industrial pursuit will be processed according to the Temporary
Labor Services (Temp or Staffing) Agency policy.
6.
BWC will calculate and charge a no coverage penalty if the employer
filed the U-3 after the date one or more employees were hired to work in Ohio.
7.
BWC may adjust or waive the penalty if the employer can provide actual
payroll for the employees or document there were no employees prior to the
active date of coverage.
8.
For any claim that occurs prior to the active date of coverage:
a.
BWC will bill the employer dollar for dollar for costs billed to the
claim; and
b.
The employer may be referred for a premium audit.
C. Finalizing
the U-3.
1.
BWC will finalize an employer's application for coverage when all
required information has been provided, and there are no coverage initiation
issues.
2.
BWC will assign a policy number to the employer or convert the
employer's quote number to a policy number, which will be used to identify the
employer.
3.
BWC will issue the employer a Certificate of Ohio Workers' Compensation
and an associated policy page that includes the following information:
a.
Policy number, employer, and managed care organization (MCO);
b.
Additional insured's name and address;
c.
Individuals eligible for elective coverage;
d.
Corporate officers; and
e.
Employee classification codes and descriptions.
4.
BWC encourages employers to create an online account to access
additional policy information.
5.
Employer coverage.
a.
BWC will issue a Certificate of Ohio Workers' Compensation Coverage
pursuant to ORC 4123.83.
The certificate is only valid if premium and assessments, including
installments, are paid by the applicable due date.
b.
BWC will prorate the estimated annual premium. The employer will be
billed in equal installments for the remainder of the current policy period.
The employer is responsible for all installment payments for the remainder of
the policy year.
c.
BWC will apply a credit in the amount of the application fee to the
employer's account.
d.
Coverage will become effective upon timely posting of the first premium
installment payment, retroactive to the date and time of receipt of the
application, subject to the provisions in sections IV.B.2 and IV.B.4.a:
i.
For walk-in customers, the date and time of receipt of application is
determined by the BWC time and date stamp.
ii.
For online applications, the date and time of receipt of application is
determined by the website time indicator.
iii. For
mail-in applications, the date and time of receipt of application is 12:01 a.m.
on the date BWC receives the U-3 and the application fee, as indicated by the
BWC time and date stamp.
e.
If the first installment payment is not made, BWC will lapse the
employer's coverage back to the active date of coverage.
D. Addition
of a named insured.
1.
An employer with an existing policy may add a named insured to its
policy by filing a Notification to Add/Remove an Additional Named Insured(s) (U-116) form
with BWC.
a.
The ownership of the additional named insured must be identical to the
ownership on the existing policy and across all entities.
b.
The U-116 may not be used to combine existing employers with active
coverage.
2.
The U-116 form is subject to review and approval by BWC.
E. Resolution
of complaints.
1.
Employer complaints must be processed under the General
Employer Complaint Policy.
2.
BWC has identified specific extenuating circumstances that apply to
Application for Coverage. These extenuating circumstances are outlined in
section IV.F below.
F. Extenuating
circumstances for which relief may be granted.
1.
Request for an earlier effective date. BWC may provide relief to the
employer under the following extenuating circumstances:
a.
An out-of-state employer was misinformed by its insurance agent/broker
that the "all states" endorsement on its insurance policy covered
Ohio workers' compensation. Merely asserting the mistake does not establish
this extenuating circumstance. The employer must have written proof of the
misinformation the employer was provided.
b.
Bank error or delivery service error in processing an employer payment
or delivering a payment to BWC. This circumstance may also be used if the post
office failed to forward or significantly delayed forwarding the employer's
mail.
i.
Such errors must be documented by letter or sworn statement from the
bank or delivery service.
ii.
The bank or delivery service error must be the sole reason for the
untimely payment or reporting.
2.
Request for coverage initiation. BWC may create a new policy if the
employer or their authorized representative provides documentation such as:
a.
Different business bank checking accounts;
b.
Different classification codes;
c.
Different location address;
d.
Different ownership; or
e.
Significant gap in time between ceasing operations and purchase
effective date.
3.
Request to recalculate the no coverage penalty.
a.
BWC may grant relief of the no coverage penalty if the employer meets
all the following criteria:
i.
The request must be in writing;
ii.
The employer must provide actual payroll for the no coverage period to
be used in calculating the revised no coverage penalty amount; and
iii. There
must be no claims in the no coverage period.
b.
BWC will waive no coverage penalty amounts of $120 or less provided the
actual payroll was submitted as outlined above. This is not automatic but will
be granted upon request.
4.
Successorship liability. Refer to the Successorship
policy on complaints related to this topic.
5.
Request for a later effective date of coverage. BWC may change the
effective date of coverage upon request of the employer if the employer meets
the following criteria:
a.
The employer provided a date for employees first earning wages in Ohio
after the date the U-3 and application fee were received; and
b.
The employer can provide documentation establishing the date employees
first earned wages in Ohio.