4 ways Ohio employers can make the most of recent BWC dividends

December 17, 2020

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Written by John Brockschmidt, SVP, Pooling; Russ Hocutt, SVP, Ohio TPA Operations; Jody Moses, Managing Director, Public Entities; Frank Pagnatta, SVP, CareWorks Comp

In November, the Ohio Bureau of Workers’ Compensation (BWC) agreed to issue $5 billion in dividends to qualifying Ohio employers to ease the financial pressures created by COVID-19. This is the third dividend declared and paid in 2020, bringing the total pandemic easement to nearly $8 billion for both public and private employers.

These dividends were made possible in part due to BWC’s strong investment strategy and returns achieved on premiums paid. However, savings have been further compounded by effective risk management programs at the workplace, resulting in a lower volume of claims. Collectively, the employer community, alongside Ohio TPAs and MCOs, has taken strides to protect the worker, improve workplace safety and take care of injured workers. When accidents do occur, great partnership efforts among this collective have proven to effectively manage claims, reduce frequency and severity, and control costs.

As dividend checks arrive in the coming days for eligible employers, the question many are asking is, what do we do next? How can we best reinvest these funds to protect workers and maintain performance for future success?

This is especially true of public entities, a group whose benefit total for this round of reimbursement is nearly $700 million – significant funds that can make a major impact for a sector that has been particularly hard hit by the pandemic.

A first matter of business is determining how to allocate dividend funds from a compliance standpoint. The Auditor of State (AOS) offered baseline recommendations in AOS Bulletin 2013-007, which shares accounting guidance entities should follow for all BWC rebates and dividends. The recent AOS bulletin 2020-007 offers additional input on the current rebate. Employers are advised to consult their tax advisor to determine the tax implications on their unique situation. They should review bwc.ohio.gov to ensure BWC has the most up-to-date tax identification information for their policy. The site also offers answers to many other frequently asked questions related to this round of dividends.

Advisors might recommend reinvestment in safety and risk management as the most appropriate use of BWC dividend funds. In addition to the compliance factor, this approach is one that can lead to the strongest return on investment. By investing in the right programs, risk control or safety, for instance, you might see a 5 to 1 return from a prevention, productivity and loss cost standpoint – which in turn helps maintain lower premiums, compounding the benefit.

Now is the ideal time for public and private employers to survey their risk management programs to determine where resources can be integrated for the greatest returns. Whether producing products, delivering services or protecting the public interest, virtually all employers can benefit from fine-tuning their overall safety strategy, claims management approach and technology enhancements to ensure the workforce is protected and fully engaged. Further, in this COVID-19 environment, it’s worth actively seeking measures to help reopen and return to business in a way that is safe for employees and customers or constituencies alike.

Focus on these four areas as you consider how to make the most of BWC dividends to help your workforce – and your bottom line – reap ongoing benefits:

1. Safety and risk control

On the safety front, employers should consider building upon their workplace safety and injury prevention programs. This might include safety culture initiatives in partnership with a loss control team, who can provide additional education and training for workers, risk assessments, site visits (remote or in-person), data analysis, risk control consulting services, root cause analyses or injury cost analyses. Another major area of focus, especially as additional requirements related to the coronavirus, workplace exposure and reporting remain a concern, would be investment in OSHA/regulatory compliance and training initiatives.

Today’s risk manager is very different than in the past – the scope of the role is broad, covering not just traditional casualty risks of workers’ compensation and general liability, but also property, cyber, misconduct, civil unrest and more diverse risks. For public entities already in a pool, opportunities may exist within the program to support broader risk coverage; it’s worth looking into options for add-on initiatives and enhancements with each sponsoring organization.

2. Return to work support

When it comes to claims management, employers are advised to review their existing claims procedures. They will want to ensure injured workers are guided through the claims process, provided access to appropriate medical care, and are taking steps to optimize return to work. Employers may also want to look at expanding their claims and managed care teams to include experienced nurse case managers, case specialists, behavioral health experts and claims specialists who can work directly with injured workers during their recovery journey.

3. Technology enhancements

Technology enhancements can elevate virtually any risk management program. This includes increasing security against potential cyber attacks, providing real-time information to injured workers, or looking at data patterns to guide future decisions. Technology should be seamless and support the entire program. For public entities participating in a

4. COVID-19 “back to business” tools

In today’s COVID-19 environment, back to business measures to ensure worker and public safety are of utmost importance. Public entities and private employers alike are seeking assistance to get their organizations up and running again as quickly and safely as possible once COVID-19 restrictions are relaxed. For the reopen phase, consider such measures as pre-opening site inspections, industrial hygiene and disinfection, facility safety and cleaning, ergonomic evaluation and workplace social distancing, and preparedness assessment.

As organizations return employees to worksites, funds could be used to support temperature screening and health checks, fit for work programs, clinical consultation, surgery preparedness initiatives, and testing and healthy return to work solutions. In support of a surely ongoing COVID-19 recovery phase, employers can benefit from exposure investigation support, unemployment claims management and tax services, and absence management solutions.

For Ohio employers, the dividend checks are in the mail. Now is the time to objectively survey your risk management program, evaluate existing program partnerships, and reinvest in those areas that will give your organization the greatest future return. Be safe and stay well.

At Sedgwick, we understand the unique Ohio environment, the complex needs of public entities, as well as the resources required to support your broader safety and risk program. Let us know how we can help.

Tags: back to business, Casualty, coronavirus, COVID-19, employers, Liability, loss control, MCO, Ohio, Ohio Bureau of Workers' Compensation, Return to work, Risk control, Risk management, Safety, Sedgwick MCO, Technology, trending themes