BWC May Appeal Court Ruling On Overcharging Small Businesses
Nearly a billion dollars is on the line in a lawsuit filed by 270,000 Ohio businesses against the state’s Bureau of Workers’ Compensation.
Ohio Public Radio's Karen Kasler reports it may be a while before that fight is over.
The employers, mostly small businesses filed suit against the BWC, claiming that the agency overcharged them for insurance premiums for years through group rating plans. The businesses won nearly $860 million in Cuyahoga County Common Pleas court last year, and the state turned to the 8th District Court of Appeals. Brian Wright speaks for Pay Us Back Ohio BWC, and he says by most accounts, the ruling from the appeals court was blistering.
“The court in their opinion mentions that the appeal is really about a cabal of Bureau of Workers Compensation bureaucrats and lobbyists who are working together to rig the system.”
But in spite of that scathing opinion, the lawsuit may still be appealed to the state’s highest court. Steven Buehrer is the director of the BWC, and he hasn’t done many interviews about the lawsuit. He says the case deals with BWC happenings between 2001 and 2009 – in the Taft and Strickland administrations, before his boss, Gov. John Kasich, took office. But Buehrer says this case could affect policies now and going forward.
“Really, this is a lawsuit challenging how the Bureau set rates for a certain group of employers. And one of the keys to insurance principles is you’ve got to have the ability to set rates, and we believe that’s an important principle that the courts ought not to interfere in, and it may be a reason why we take this up to the Ohio Supreme Court.”
Complicating the situation is that the BWC is running a surplus of around 8 billion dollars, according to Buehrer – Wright says it’s more than that. He says the BWC set aside $860 million after the ruling last year, and now the agency can really afford that judgment, with payouts ranging from a few cents to 2 million dollars. And Wright says the businesses he speaks for are calling and e-mailing the governor’s office to let him know.
“We’ve got employers out there who are tapping into their own 401(k)s just to keep their businesses afloat - and thousands of others who went out of business. So I think for our members it’s obviously a very emotional time and they’re very active right now.”
But Buehrer says that surplus is the result of great investment and lower than anticipated medical costs, and that the premiums are based on precise actuarial calculations and aren’t intended to make money for the agency. And he says the BWC returned a billion dollars to businesses last year – ranging from $5 to several million dollars – and he says businesses are paying the lowest rates in 30 years. But Buehrer says while he understands some Ohio businesses feel they’re owed money, he has to follow the law and consider how settling the case would affect all businesses.
“We will quickly return these dollars if that’s what the highest court in Ohio says. But right now I do want everyone to understand we’re balancing these various interests against our statutory obligations.”
The ruling from the appeals court sends back the case to the trial court for a recalculation of the restitution. The BWC will make a decision on appealing the ruling to the Ohio Supreme Court by June 30.