Last week, the Ohio Chamber of Commerce testified in support of House Bill 207, which seeks to prevent drastic increases in workers’ compensation costs due to motor vehicle accidents caused by third parties. This legislation provides a much needed change to Ohio workers’ compensation law in subrogation situations where a motor vehicle accident is not the fault of the employee and could not be prevented by the employer.
Subrogation is an insurance principle whereby one party, typically an insurer, seeks reimbursement from the responsible, or “at fault”, party for a claim it has already paid. Under the current workers’ compensation system, when an employee is in an accident that is caused by a third-party, the employee files a workers’ compensation claim and a workers’ compensation reserve and payment is made prior to subrogation against the at fault third-party.
In these instances, the Bureau of Workers’ Compensation (BWC) seeks reimbursement on behalf of the employer against the at-fault party or its insurance company. These accidents, though the fault of a third-party, are initially charged to the employer’s experience until the BWC determines that the claim is eligible for subrogation. Because of this added experience, businesses may not qualify for a group rating program and would likely see an increase in premiums.
HB 207 allows these types of claims, where a third-party is clearly at fault, to be initially charged to a separate BWC account rather than count against the employer. This change would likely benefit employers by preventing them from losing eligibility for group rating and other discount programs and from seeing large premium increases. Additionally, this provides incentive for the BWC to aggressively pursue these subrogated claims and to recover as much as possible from the at-fault party.
The bill creates a balance between the numerous interests involved in these types of accidents. It maintains the integrity of the state-fund by limiting this process to instances where there is clear fault and an entity to subrogate against; it protects employers from being unreasonably penalized due to motor vehicle accidents which were not their fault and which they could not have prevented; and it also does not impact the treatment or compensation that injured workers receive. HB 207 is currently in the House Insurance Committee and is scheduled for a fourth hearing and possible vote this week.