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Economy and Business


Ohio's workers comp appeals a ruling that could cost it $860 million
The state says its program saved money and kept workers safer, but companies say the state unfairly picked winners and losers
by WKSU's M.L. SCHULTZE


Web Editor
M.L. Schultze
 
In The Region:

The Ohio Bureau of Workers Compensation today appealed an order to pay nearly $860 million to companies who overpaid their premiums over the last decade. WKSU’s M.L. Schultze has more on the case that started with a famous Cleveland deli.

More on the BWC argument

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A group of nearly 300,000 companies joined the suit that was originally filed by San Allen Inc. That’s the legal name for what many Northeastern Ohioans know as Corky and Lenny’s. They claimed  discounted premiums the bureau gave companies that joined group insurance plans were offered  at their expense. And Cuyahoga County Common Pleas Judge Richard McMonagle  agreed.

The appeal wasn’t unexpected. Unchallenged, the ruling will cost the injured workers fund nearly a billion dollars. But beyond that, agency spokesman Bill Teets maintains the companies in the group earned their discounts.

“If you look at the claims costs for those in the group and not in the group over the same period of time, you’ll see that the people who were in a group rating program actually had safer work places and therefore, their  claims costs were actually lower. So the group rating program did what it was supposed to do. It improved safety and lowered people’s claims costs.”

At whose expense?
Nor surprisingly, James DeRoche sees it differently. He’s the Cleveland lawyer who took the state to court, and he says even the Bureau of Workers compensation records are on his side.

Among the companies he represents are those who may have benefitted from the group rates – for awhile, and then found a brutal reality.

“If an employer went from being one of the haves to one of the have nots, they could see sometimes an 8,000 percent increase intheir premium from one year to the next. And the Bureau itself admitted that there were a large number of employers who couldn’t withstand that type of jump and simply went out of business.”

DeRoche maintains the state has set aside the nearly $860 million it needs to pay the claim, leaving the state with $8 billion to continue to help injured workers. 

Teets says the state has now capped group discounts at 54 percent; they had been shooting as high as 90 percent. 

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