Self-insurance is a privilege the BWC grants to certain employers that can show an ability to directly pay compensation and medical costs for work-related injuries. An employer granted the privilege of self-insurance agrees to abide by the laws and rules as described in Ohio Revised Code 4123.35 and Ohio Administrative Code 4123-19-03.

Qualifications for self-insurance
To qualify for self-insurance, an employer must meet the following requirements.

• Two years experience with the Ohio State Insurance Fund
• Demonstrate strong financial stability
• Possess the ability to administer a self-insured program
• Maintain an account with a financial institution in Ohio, or draw compensation checks from the same account as the payroll checks
• Have a BWC-certified Qualified Health Plan (QHP) or medical-management plan

Program Administration
Unless otherwise permitted by BWC, the self-insuring employer must have a company office located in Ohio and shall designate one or more employees (known as the Ohio Administrator) to be knowledgeable and capable of administering an efficient workers' compensation program. The claims administration process includes, but is not limited to: the allowance or disallowance of claims, payment of compensation and benefits, maintaining claim files, and making the appropriate information available to the injured worker and/or their representatives for inspection. The administrative process also includes assisting employees in filing their applications for benefits and completing the necessary forms for processing a workers' compensation claim.

The employer may retain a third-party administrator (TPA) or an individual to assist in handling workers' compensation claims and to authorize settlements. However, the ultimate responsibility for the administration and processing of workers' compensation claims resides with the self-insuring employer.

Workers' compensation claim files must be housed at an Ohio location of the self-insuring employer. Should the employer wish to maintain claim files out of state or with their TPA, prior approval must be obtained from BWC's self-insured department.

The employer must post a copy of its self-insured certification at each work site with the name, title and department location of the company individual who is responsible for administering its workers' compensation program. The employer must also furnish or make arrangements for reasonable medical services during working hours in accordance with BWC rules.

Requirements of Self-Insuring Employers
In addition to directly paying all compensation and medical costs, self-insuring employers pay semi-annual assessments to the BWC based on a percentage of the employers claim payments. These assessments fund BWC and Industrial Commission of Ohio administrative costs, safety and hygiene services, the Self-Insured Employers’ Guaranty Fund (SIEGF), and the mandatory self-insured surplus fund. View assessment rates information.

The previously mentioned SIEGF guarantees that claims liabilities are satisfied if the self-insured employer is unable to pay them. BWC bases the guaranty fund assessment for new self-insured employers on the total of the last two paid state-fund payroll premiums at base rate multiplied by 6 percent. This assessment is billed once a year for three years. The minimum assessment is $5,000 per year for the three years.

In addition, all self-insured employers must reimburse the BWC for any disabled workers' relief fund (DWRF) payments, dollar-for-dollar on a semiannual basis. This fund is for permanently and totally disabled employees whose workers' compensation benefits have not kept up with inflation.

BWC may also require additional security from self-insuring employers in the form of a letter of credit. This security requirement is based on a combination of an employer’s financial and claim exposure. View the securitization methodolgy.

Excess insurance
In addition, pursuant to Ohio Revised Code 4123.82, a self-insuring employer may obtain excess insurance, through an insurance corporation, to indemnify all or part of a claims loss. Excess insurance is not required, however, if an employer does obtain this coverage the current law sets the limit from any one disaster or event in excess of at least $50,000.

Under an excess workers’ compensation insurance program, the employer retains a pre-determined amount of liability and the excess carrier reimburses the employer for claims losses above these thresholds. The direct liability for the claim administration and payments remains with the employer throughout the life of the claim.

In the event of a default by a self-insuring employer, BWC has an ability to seek reimbursement from these same excess insurance policies in place of an employer. Through reimbursements from excess insurance, BWC can limit the costs directed against the SIEGF.

In an effort to collect the most extensive and current data possible from self-insuring employers, BWC's self-insured department also requests historical excess insurance information from employers identified as being an increased financial risk. We request that employers provide the summary or declaration pages for all excess insurance policies.

Detailed instructions on how to submit this excess insurance information will be provided to employers within the Application for Renewal of Authorization to Operate as a Self-Insured Risk (SI-7).

For more information
Call BWC's self-insured department at 614-466-6773 or 1-800-644-6292 and follow the options. You may also email the self-insured department. To learn more about becoming a self-insuring employer, visit our Obtaining self-insurance page.