Prospective billing became effective with the policy period beginning July 1, 2015. However, Ohio employers are just now starting to experience the effects of this new payment policy from the Bureau of Workers’ Compensation (BWC). More than ever before, we are seeing clients with lapsed coverage due to the new payment frequency. In fact, we had more lapse notices from the BWC this year than we’ve had in the past. Why the increase? Most employers were in the habit of paying BWC premiums twice a year, and now have payments due every other month.
BWC initially transitioned all private employers (other than those who pay just the minimum) to a bi-monthly pay plan. This means employers pay a portion of their annual premium six times a year. And, with more payments due, the chances of a lapse increases because any missed payment causes a lapse in coverage. Each lapse builds on the last. In other words, if a company is two days late on one payment, then one day late on the next, their policy will reflect a total of three days of lapsed coverage. Lapses not only expose companies to risk, as any claim that occurs while a company is lapsed will not be covered by BWC, but as these lapses add up, they can also prevent discount program participation.
What can you do?
• Change your payment plan.
Each May, BWC will send a notice that includes your installment schedule and will break down your total estimated premium due by manual class. If you would like to select a different installment option, you can make the change annually, prior to the start of the policy year, by going online at www.bwc.ohio.gov or by calling BWC.
• Add a workers’ comp pay-as-you-go service to your payroll program.
Sheakley’s payroll service includes a workers’ comp premium payment option, and most other payroll providers do as well. By allowing your payroll provider to collect your premium in even installments during each payroll run and then submit payment on your behalf, you have one less thing to worry about. Just be sure to keep your provider informed on any rate changes or correction notices you receive from the BWC.
BWC will send notices in May and include a coverage certificate. Keep in mind, this certificate is only valid if your premium and assessments, including installments, are paid by the applicable due date. Around June 1 of each year, BWC will mail the first installment invoice. To maintain active coverage, you must pay that first installment by June 30 of each year, then stay on track with the payment plan you chose.