Daily Court Reporter - News Chamber, trial lawyers oppose Republican plan to overhaul Ohio BWC
Chamber, trial lawyers oppose Republican plan to overhaul Ohio BWC
KEITH ARNOLD, Daily Reporter Staff Writer
Detractors of a Republican lawmaker's proposal to enact fundamental change at the Ohio Bureau of Workers' Compensation say provisions of House Bill 269 are overburdensome to employers, financially expose vulnerable workers and leave in layers of bureaucracy.
The Ohio Chamber of Commerce and a representative from the Ohio Association for Justice cautioned members of the House Insurance Committee at hearing in the final weeks of 2017.
"This proposal could complicate a worker's financial problems at a time when the worker has already suffered a life-altering injury," John Van Doorn, OAJ director of government affairs, wrote in proponent testimony. "The last 10 years of an employee's career should be spent preparing financially for retirement.
"Removing these benefits could increase the financial burden on the state in later years as these former employees enter retirement."
Van Doorn was referring to Clayton Rep. Michael Henne's proposal in HB 269 to replace permanent total disability benefits at retirement age with extended benefits that are based on a percentage of PTD compensation and the number of years an individual received the benefit.
"PTD benefits don't just replace wages," Van Doorn continued. "They also compensate workers for shorter life expectancy. Taking these benefits away in the short-term will lead to whole families that are supported by other government programs.
"Removing these benefits won't cut costs. It will shuffle workers and their families to other government-run assistance programs."
Henne is quick to point out that it's only a portion of an employee's wages that workers comp is intended meet.
"It is a 'wage replacement' benefit and was never intended to be part of any retirement plan," the lawmaker said.
He acknowledged, however, that a catastrophic injury can affect retirement benefits.
"The extended benefit plan starts at retirement and will add 10 percent of the wage replacement benefit for each year the worker is short of retirement" up to 100 percent, Henne said.
The Ohio Chamber's Director of Labor and Legal Affairs Don Boyd faulted the arbitrary nature of HB 269's proposed death benefits that purportedly have no link to a given employee's earning capacity.
"This would be a fundamental departure from current law and would increase costs for employers," Boyd said. "No testimony has been provided showing why the additional $35,000 death benefit is necessary or why the number was chosen."
The chamber's criticism is based on the BWC's own actuarial study on various provisions of the bill, he noted.
"This bill also increases costs for employers by instituting a scholarship in death claims of $5,000 per year for up to four years per dependent," Boyd continued. "... Once again, this provision has no tie to an employee's earning capacity and significantly increases costs without a justification as to why this is needed."
Henne defended the bill, asserting like all insurance policies, the best one is the one that remains unused.
"In the property and casualty world, loss prevention has become an important part of the underwriting process and the first step in any risk management plan," the lawmaker said. "BWC has a variety of safety programs they offer to employers on a voluntary basis but there is limited participation.
"Quite often, employers do not seek out these programs until after they have had claims and rates have increased.
HB 269 would require BWC to develop and make incentives available for employers to participate in loss prevention programs.
"They must set goals, targeting high-risk employers and industry sectors, then report to the General Assembly with the progress," Henne said.
Finally, the bill proposes a name change for the entire bureau - Office of Worker Safety and Rehabilitation.
Henne argued that current name evokes the following: "A bureaucracy to give workers money for injuries."
He noted the only other bureau in state government is the Bureau of Motor Vehicles which may be even less popular than the BWC.
"It is time the name better reflects their entire mission statement," Henne said. "Rather than a name that generates a negative reaction, we want the name to reflect what they truly are about.
"As a business owner, I do not see this as just an additional expense but as an investment. More emphasis on the positive through policy and branding can result in better outcomes for employers and workers."
HB 269 has the support of 24 fellow cosponsors in the Ohio House of Representatives.
A fourth hearing of the bill had not been scheduled as of publication.
Date Published: January 19, 2018