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Economy and Business


BWC contemplates taking a nearly $1 billion judgment to the Ohio Supreme Court
The bureau maintains it must protect all businesses; lower court rulings say it didn't do that
by WKSU's STATEHOUSE BUREAU CHIEF KAREN KASLER


Reporter
Karen Kasler
 
Steve Buehrer says the BWC must protect all businesses.
Courtesy of State of Ohio
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In The Region:

Nearly a billion dollars is on the line in a lawsuit filed by 270,000 Ohio businesses against the state’s Bureau of Workers’ Compensation. Statehouse correspondent Karen Kasler says it may be a while before that fight is over.

LISTEN: Short form, Kasler on what Ohio's BWC does next

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LISTEN: Short form, Kasler on what Ohio's BWC does next

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The employers, mostly small businesses -- sued the BWC, claiming that the agency overcharged them for insurance premiums for years through group-rating plans. The businesses won nearly $860 million in Cuyahoga County Common Pleas court last year, and the state turned to the 8th District Court of Appeals.

Brian Wright speaks for Pay Us Back Ohio BWC, and he says by most accounts, the ruling from the appeals court was blistering. 

“The court in their opinion mentions that the appeal is really about a cabal of Bureau of Workers Compensation bureaucrats and lobbyists who are working together to rig the system.” 

Looking to a higher court
But in spite of that scathing opinion, the lawsuit may still be appealed to the state’s highest court. Steven Buehrer is the director of the BWC, and he hasn’t done many interviews about the lawsuit. He says the case deals with the BWC between 2001 and 2009 – in the Taft and Strickland administrations. That was before his boss, Gov. John Kasich, took office. But Buehrer says this case could affect policies now and going forward. 

“Really, this is a lawsuit challenging how the bureau set rates for a certain group of employers. And one of the keys to insurance principles is you’ve got to have the ability to set rates. And we believe that’s an important principle that the courts ought not to interfere in, and it may be a reason why we take this up to the Ohio Supreme Court.”

A big surplus by anybody's accounting
Complicating the situation is that the bureau is running a surplus of around $8 billion, according to Buehrer; Wright says it’s more than that. He says the BWC set aside $860 million after the ruling last year, and now the agency can really afford that judgment, with payouts ranging from a few cents to $2 million. And Wright says the businesses he speaks for are calling and e-mailing the governor’s office to let him know. 

“We’ve got employers out there who are tapping into their own 401(k)s just to keep their businesses afloat -- and thousands of others who went out of business. So I think for our members, it’s obviously a very emotional time and they’re very active right now.”

Actuarial soundness
But Buehrer says that surplus is the result of great investment and lower than anticipated medical costs, and that the premiums are based on precise actuarial calculations and aren’t intended to make money for the agency. And he says the bureau returned a billion dollars to businesses last year – ranging from $5 to several million dollars. And he maintains that businesses are paying the lowest rates in 30 years.

Buehrer says, while he understands some Ohio businesses feel they’re owed money, he has to follow the law and consider how settling the case would affect all businesses. 

“We will quickly return these dollars if that’s what the highest court in Ohio says. But right now I do want everyone to understand we’re balancing these various interests against our statutory obligations.”

The ruling from the appeals court sends back the case to the trial court for a recalculation of the restitution. The BWC will make a decision on appealing the ruling to the Ohio Supreme Court by June 30.

 

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