A 20 percent reduction in the average Bureau of Workers’ Compensation premium rate is on the horizon for private employers after the bureau’s chief actuary recommended to the board of directors’ Actuarial Committee the sizeable decrease in rates for the policy year starting on July 1, 2019.
The reduced rates are projected to save Ohio employers $244 million dollars in the upcoming fiscal year.
If approved at next month’s board of directors meeting, this rate reduction will be the largest cut to private employers’ workers’ compensation premiums in almost 60 years. The decrease in premiums for the approaching fiscal year continues the trend of private employer rate drops which have been lowered six times since 2011 and were last increased in 2006.
The new administrator for the Bureau of Workers’ Compensation, Stephanie McCloud, credited efforts by Ohio employers to prioritize workplace safety as a driver for why it is possible to cut premium rates. Likewise, these efforts by private employers are a major reason why average premium rates for companies utilizing the state fund are at their lowest level in 40 years.
The Ohio Chamber of Commerce believes the reduced premium rates will also improve Ohio’s business climate because it will shrink operating expenses. Lower operating costs will make the state more competitive when companies look to expand or relocate, and businesses already here can fund new capital investments or hire additional employees with the money they save.
Additionally, premium rate stability is an Ohio Chamber priority because employers need to budget for future workers’ compensation costs. Thanks to sound fiscal management of employers’ premium dollars by the bureau, we have seen rate stability over the last decade, and the recommended reduction by the BWC’s chief actuary is a sign that the bureau is continuing to properly manage their fund which should enable rates to remain stable going forward.