Ohio House Proposes Fundamental Shift to Workers’ Compensation Law

This week the Ohio House Finance Committee adopted a substitute bill for the Bureau of Workers’ Compensation budget that makes significant and fundamental changes to Ohio’s workers’ compensation system.

The most notable change is a provision that would allow workers’ compensation coverage of a mental injury without any physical harm for the first time in Ohio. This fundamental change was the focus of my testimony in front of the House Finance Committee on Thursday.

The substitute bill would provide peace officers, emergency medical workers and firefighters workers’ compensation coverage for PTSD. Unlike prior legislative attempts to provide first responders with PTSD coverage, the provision before the Finance Committee contains no limitations on the compensation or medical benefits for this coverage. Instead, the mental injury would be treated like any other injury that workers’ compensation currently covers.

The fiscal impact of this provision has not yet been determined, but when the Bureau analyzed the fiscal impact of legislation introduced last General Assembly, they found that PTSD coverage would increase costs on an annual basis by an estimated $98.4 million. Additionally, the legislation the Bureau analyzed capped coverage at one year, so it is reasonable to assume that the latest provision will cost north of $100 million dollars per year since there is no coverage limit.

The Ohio Chamber of Commerce and other business groups are concerned about this proposal despite the fact it does not apply to private employers because removing any requirement of a physical injury before a mental condition is covered would change the ground rules for Ohio’s workers’ compensation system and could potentially lead to all employees receiving PTSD coverage.

Unfortunately, the substitute bill has other concerning provisions besides allowing coverage for PTSD without any physical harm. The substitute bill would prohibit employers from requiring an employee to forgo employment with the company as a condition of a settlement. Likewise, it would prohibit employers from objecting to a settlement offer once the claim is outside of their experience. This provision is problematic because it could put employers at risk of compensating the employee twice for the same injury. 

Additionally, incentives included in the substitute bill would essentially prohibit employer policies that call for employees to use accrued sick leave in lieu of temporary total disability. These policies benefit employees because it assures employees will receive one hundred percent of their salary while recovering from injury instead of two-thirds of their salary up to the statewide average weekly wage provided by temporary total disability. 

The substitute bill also changes the definition of employee for the purposes of workers’ compensation, unemployment compensation, and Ohio’s income tax. The change also calls for the Superintendent of Industrial Compliance to adopt rules that align with the employer-employee relationship test used by the IRS and to assess a $500 fine on the employer for each employee they misclassify. 

In all, the substitute budget bill represents a dramatic shift in Ohio’s workers’ compensation law and includes numerous provisions that are troublesome for employers. The Ohio Chamber’s government affairs team is committed to making changes to this bill in order to limit its negative impact on the employer community and will be working with members of the Ohio House and Ohio Senate to accomplish that goal.