Categories: Strategy & Industry Insights, Workers' Compensation,
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Quick Guide: Workers’ Comp Group Rating vs Group Retro

For Ohio employers, the group rating and group retrospective rating (or group retro) programs allow employers that are similar in business type to combine their individual claims to act as one employer and achieve lower premiums. There are two ways savings are calculated:

  1. Upfront, with group rating;
  2. Look-back, with group retro.

What’s the difference?

Group Rating (Enrollment deadline for the 2017 rate year: Nov. 18, 2016)

  • Why employers like it:
    • Discount is known.
    • Discount is applied to Bureau of Workers’ Compensation (BWC) premium statement
  • Need to consider:
    • Savings are limited; the maximum discount for the 2016/17 rate year is 53%.

 

Group Retro (Enrollment deadline for the 2017 rate year: Jan. 30, 2017)

  • Why employers like it:
    • Refund is potentially higher than their projected group rating discount.
  • Need to consider:
    • Refunds are calculated at 12, 24, and 36 months after the rate year ends, so employers need to pay their full BWC premium up front.
    • The final refund is based on the group’s performance, and an assessment is possible if the claims costs are significantly higher than expected. However, in a well-managed group, participants receive refunds for three years in a row.

How to shop for the best program 

First, to request a quote, you must provide a Temporary Authorization to Review (AC-3) Form to the program administrator. This form allows the group administrator to request BWC claims details needed to evaluate your eligibility. The group administrator will then provide a free, no obligation savings analysis for your review. The analysis should include all forms and details needed to enroll in the program you choose.

Be sure to read all group projections carefully, and it’s always a good idea to ask for a second opinion to be confident you are making the right choice for your company. There are often differences in calculation details, and even contracts. For example, some programs require salary continuation to participate in their group retro program.

Here are some questions you should be asking as you look at group options:

  • Are you choosing a group retrospective group knowing your projected refund? Or simply hoping for the maximum possible refund? Is that maximum possible refund a reasonable expectation?
  • Is your group rating discount projection in line with your current group discount?
  • If you qualify for both traditional group rating and group retrospective rating, which is the best choice for your company?
  • Does the group program offer both group rating and group retro?

Ohio employers can also click here to request a free workers’ comp and safety savings analysis. With options beyond just the standard Third Party Administrative (TPA) services, Sheakley has more ways to help your business than any other TPA.

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