Senate Bill 7 benefits you
Law will help BWC increase efficiencies
Friday, June 30, 2006
Senate Bill 7 (SB 7) contains many provisions that help BWC cut costs, increase revenue
and improve service. The act, which goes into effect June 30, will save the bureau
approximately $100 million per year.
Among many provisions, SB 7 safeguards BWC against fraud, allows for direct deposit of
benefits and enforces stricter compliance to workers’ compensation laws to ensure all
employers are paying their fair share.
Despite a referendum challenge to SB 7, BWC will continue its efforts to better serve its
customers. The organizers of the referendum did submit signatures at the end of June, and
the Ohio Secretary of State's office has two weeks to review and validate the signatures.
If there are sufficient, valid signatures, the Ohio voters would decide the contested portions
of SB 7 this fall.(See referendum section below.)
Then, a majority of voters would have to approve the referendum during the Nov. 7 general
election to rescind specified portions of the law.
For more information about a specific provision, click on the appropriate link below.
Benefits
SB 7 contains several provisions in the area of determination and payment of workers’
compensation benefits. For example, it reduces the 40-week waiting period for injured
workers to file an application for permanent partial disability (PPD) to 26 weeks.
It also redefines a person’s eligibility for permanent total disability compensation (PTD).
In addition, the act allows for payment of benefits to victims of rape or sexual assault
in the workplace, even if they incur no physical injury. This is unprecedented in Ohio.
Previously, a physical injury was necessary for a victim to qualify for counseling and
other services.
The act also changes the amount of time an employee may receive payments for wage loss
suffered: (1) if the worker returns to employment other than his or her former position;
or (2) if the worker is unable to find employment consistent with his or her physical
capabilities.
In the area of determination and payment of workers’ compensation benefits, the act also:
-
Increases the maximum limit for BWC’s $1,000 Medical-Only Program to $5,000;
- Requires the bureau’s administrator to establish a program that mitigates the
impact one significant claim can have on a group-rated employer’s experience,
and also establish eligibility criteria and requirements an employer must satisfy
to participate in this program;
- Allows any party to void a settlement agreement if an employee dies during the
30-day period after approval of a final settlement agreement;
- Revises conditions under which a final settlement agreement may be filed without
an employer’s signature and establishes related notification requirements;
- Specifies that an employee receiving compensation for PTD due to a traumatic
brain injury is entitled to receive that compensation regardless of his or her
subsequent employment in a sheltered workshop, so long as the employee does not
receive more than $2,000 in compensation from the job per calendar quarter;
- Revises finger numbering for PPD (the way the workers’ compensation system
catagorizes/numbers fingers for medical billing purposes;
- Increases the award for facial disfigurement from $5,000 to $10,000;
- Requires objective evidence of substantial aggravation and limits medical
treatment to the pre-injury level of impairment;
- Adds that persons, while confined to a county jail in lieu of incarceration
in a state or federal correctional institution, as well as those persons confined
in any state or federal correctional institution as under continuing law, may not
receive compensation or benefits during the period of confinement.
Anti-fraud provisions
In fact, behind bars is where BWC wants people who commit workers’ compensation fraud.
Fraud is a hidden cost of workers’ compensation insurance, with an impact on both employers
and injured workers. Industry estimates indicate that between $80 million and $320 million
are lost to workers’ compensation fraud each year in Ohio.
To ensure BWC only pays legitimate claims, BWC aggressively attacks fraud through its special
investigations department. The department seeks to identify and recover funds obtained
illegally in cases such as: improper billing for medical services, false information
supplied to BWC for financial or other gain, and individuals who collect workers’
compensation benefits while working.
SB 7 expands the definition of workers’ compensation fraud to include altering, forging or
creating BWC certificates to falsely show correct coverage, providing false information when
such data is needed to determine an employer’s actual premium or assessment, and failing to
secure or maintain workers’ compensation coverage with the intent to defraud the bureau. It
also:
- Prohibits persons, health-care providers and managed care organizations (MCOs)
from obtaining or attempting to obtain by deception payments to which they are not
entitled;
- Authorizes monetary penalties and debarment for persons, health-care providers
and MCOs for obtaining or attempting to obtain by deception payments to which they
are not entitled, and specifies procedures for enforcing these provisions;
- Designates BWC’s special investigation department a criminal justice agency,
and allows the department to apply to access the computerized criminal databases
including those administered by the National Crime Information Center or the
Law Enforcement Automated Data System in Ohio and other criminal databases.
Compliance with the workers’ compensation law
Ohio law also requires employers to base their premium payments on the total actual
payroll paid to employees. SB 7 allows the bureau to compare the total payroll employers
report to BWC with what they report to the tax commissioner. It allows BWC to furnish
a quarterly list containing the name and Social Security or employer identification
number of any employer to the tax commissioner requesting the total amount of payroll
the employer reported on his or her annual tax return. The tax commissioner must disclose
the total amount of payroll an employer reported after receiving BWC’s list.
Fines and penalties
SB 7 also makes it more costly for employers who do not pay their premiums timely. The
previous system allowed for tiered penalties based on overdue periods, ranging from
2 to 12 percent of the premium due. SB 7 allows for a permissive penalty of not more than
$30 plus a tiered penalty beginning at the prime interest rate multiplied by the premium
due if the employer is 61 to 90 days delinquent. The penalty increases every 30 days
thereafter, capped at the prime interest rate plus 8 percent, times the premium due.
This penalty can never exceed 15 percent of the premium due.
The act also requires BWC to adopt rules to penalize self-insuring employers who fail
to pay assessments, which increase incrementally the longer they remain unpaid.
Direct deposit of payments under the workers’ compensation law
In addition to increasing penalties for employers who pay their premiums late, SB 7 helps BWC
cut costs by reducing mailings and postage. The act permits BWC to electronically deposit
all disbursements the agency pays out and requires the bureau to adopt rules regarding use
of direct deposit. The law also:
- Requires the administrator to notify injured workers about the usage of direct
deposit and to furnish debit cards and instructions for use of those cards to
injured workers;
- Allows the administrator to enter into contracts with an agent to supply debit
cards to injured workers to access payments, and to enter into contracts with an
agent and agreements with financial institutions to credit debit cards with the
amounts specified by the administrator;
- Permits the administrator to require any payee to provide written authorization
designating a financial institution and account number to which BWC may credit a
payment via direct deposit.
Use of direct deposit makes the bureau more efficient — making payments less costly,
faster and safer.
Coverage under the workers’ compensation law,
and disputes and appeals
SB 7 also touches on functions of the Industrial Commission of Ohio (IC). It imposes a
five-year limit on the continuing jurisdiction of BWC and the IC to make a modification,
change, finding or award if there has been no payment of medical benefits within six years
of an injury and no compensation paid within 10 years.
It also specifies a injured worker may not dismiss a complaint filed with a court of common
pleas concerning appeal of an IC decision without the employer’s consent, if the employer
filed the initial appeal. It also disallows parties from using medical dispute resolution
procedures to resolve any issues approved through standard treatment guidelines, pathways
or presumptive authorization.
Other SB 7 provisions
The act covers various miscellaneous items. For example, it changes the manner by which BWC
calculates the wage payable to certain tipped employees, now tying it to standards used for
the federal Fair Labor Standards Act.
SB 7 also states information concerning claims filed with BWC or the IC, including
information identifying a injured worker's address and telephone number, is not a public
record under the Public Records Law (sec. 149.43) and is not open to the public.
In addition, SB 7 also:
- Increases a cap on specified attorney’s fees for successful court appeals from
$2,500 to $4,200;
- Requires the administrator or self-insuring employer, as appropriate, to deduct
attorney’s fees and necessary expenses from a lump-sum payment and pay that amount
directly and solely to the attorney, if child support orders are involved.
What the referendum asks voters to repeal from Senate Bill 7
- Require objective evidence of substantial aggravation and limit medical treatment
to the pre-injury level of impairment.
- Reduce the statute of limitations for both lost-time and medical-only claims to
five years.
- Set a stricter definition for permanent total disability and list four factors
BWC would not consider.
- Reduce non-working wage loss benefits to 52 total weeks, but the first 26 weeks
would not count against the overall wage loss 200-week limit.
- Eliminate injured worker's automatic right to dismiss an employer’s appeal.
- Increase the attorney fee for a successful injured worker appeal from a maximum of
$2,500 to $4,200.
- Exempt injured worker home address and phone number from public record.
- Make rape or sexual assault at the workplace a compensable injury.
- Allow settlements outside the experience period without employer sign-off.
- Allow employment for those with traumatic brain injury on permanent total
disability.
- Prohibit county prisoners from receiving benefits.
- Designate BWC’s special investigations unit as a criminal justice agency.
- Prohibit the Workers’ Compensation Oversight Commission from adopting campaign
contribution policies that exceed state law.
- Provide for self-insuring employers to choose to pay compensation and benefits
directly under certain circumstances.
- Calculate average weekly wage for permanent total disability based on average
weekly wage during date of injury or on the date of disability due to occupational
disease.
- Allow any party to void a settlement agreement if an employee dies during the
prescribed 30-day waiting period.
- Administrator shall not recalculate a injured worker's average weekly wage for
permanent total disability awards solely for the reason that the injured worker
continued working and wages increased.
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