OHIO BUREAU OF WORKERS' COMPENSATION Employers get a break

The bureau's investments are doing well, so it's passing on the benefits.
By CYNTHIA VINARSKY
VINDICATOR BUSINESS WRITER
Public and private employers across the Mahoning Valley can look forward to a year-end windfall, a 20 percent discount on their next bill from the Ohio Bureau of Workers' Compensation.
The state agency cited better-than-expected investment growth as the reason its governing commission decided to grant the one-time reduction on bills for 2003.
Jeremy Jackson, a BWC spokesman, said the agency's investment surplus has reached $600 million, compared with $400 million in May.
For some local governments, the savings will mean thousands of dollars available to spend elsewhere. Youngstown will save the most among local public employers -- $347,008, the bureau says.
Payroll potential
"It's very timely for the city of Youngstown because 2004 will be a 27 payroll year. That only happens once every 11 years," said David Bozanich, the city's finance director. "We'll use the money to help meet that additional payroll."
Bozanich said city officials have been working to reduce the city's workers' comp bill. He expects the next bill to hit $1.7 million in 2004 without the new discount.
Small businesses will welcome the news, said Dorothy Boggio, director of employer services for the Youngstown/Warren Regional Chamber.
"Smaller employers in the Valley have been struggling with double-digit increases in the cost of health care," Boggio said. "It's encouraging to see a double-digit decrease in something."
An 'about-face'
Mike Dockry, Austintown Township administrator, called the discount a surprise and "a complete about-face" from what bureau officials have been saying at seminars. The township expects to save $102,564 with the discount.
"They've been telling us not to expect any more discounts or dividends," Dockry said. "Obviously, in our financial situation it's a big deal. Any amount of money is a big deal."
Just six months ago, BWC officials were warning employers that dividends would no longer be offered and higher premiums were on the way. Public employers were notified of a 12 percent premium increase, and private employers were advised to expect increases averaging 9 percent.
Those increases will show up for the first time on bills for 2003, due to arrive in late December for public employers and in January for private employers.
The 20 percent dividends announced Thursday, however, will likely more than offset those increases this time around, BWC spokesman Jackson said.
The percent discount will reduce public employers' total bill because they receive just one invoice a year.
Private employers will get the discount on half their annual bill because they are billed twice a year. Jackson said BWC officials haven't decided whether to also discount second-half bills for private employers.
Rates will go up an additional 2 percent in 2005 for public employers. Officials haven't decided whether a rate increase will be needed next year for private employers.
Benefits intact
James Conrad, BWC administrator and chief executive, said the 20 percent premium discounts will not compromise the benefits of injured workers.
He said that the bureau has enjoyed an 8.42 percent return on its investments through the third quarter of 2003, and that helped make the rebates possible.
Gov. Bob Taft, commenting in a BWC news release, said he's hoping that small- and medium-sized companies will use the savings to reinvest in their businesses and to create jobs, and that public employers will preserve safety services and balance budgets.
vinarsky@vindy.com