Making BWC More Accountable

Saturday, June 2, 2007 | 0

By Sen. John Carey

As Ohio's worker's compensation system works to rebuild in the aftermath of a high-profile, rare coin scandal and news of other faulty investments that sent shockwaves throughout the state, the General Assembly took a monumental step last week to not only provide significant funding to ensure smooth operation of the system over the next two years, but establish new oversight provisions that seek to make the system more accountable to the public and injured workers; provide more transparency in operations; and create long-term stability of funds, which directly impact the health and well-being of Ohio's employers and injured workers.

House Bill 100, legislation I co-sponsored which passed both the House and Senate with overwhelming, bipartisan support, represents the combined budgets for the BWC and the Ohio Industrial Commission (IC) and includes several other important reforms designed to renew confidence and improve operations at both agencies.

With more than $20 billion is assets, the BWC, which was established in 1912, is the largest, exclusively state-funded, worker's compensation system in the country, providing medical and compensation insurance for work-related injuries, diseases and deaths to approximately two-thirds of Ohio's workforce.

In 2006 alone, the bureau provided coverage to more than 288,000 employers, processed more than 188,000 claims and paid out more than $1.9 billion in benefits. However, BWC is one of two parts that make up Ohio's worker's compensation system. While the bureau is responsible for collecting insurance premiums, overseeing the compensation system and paying out claims, the IC, which is largely independent of the BWC, was created as a forum for employers and injured workers to resolve disputes over claims and other worker's compensation issues.

While Ohio's worker's compensation system has doled out billions of dollars to benefit injured workers over the years, the aforementioned coin and investment scandals at the BWC exposed severe problems with the way the system was being run.

HB 100 seeks to fix many of these problems, strengthen the bureau's operations and get the system back on track by meeting four main objectives -- increase professionalism at the BWC; increase accountability in the system; increase transparency in the operations at the bureau; and improve the level of leadership among those charged with protecting the well being of Ohio's injured workers and Ohio employers.

Specifically, to increase accountability in the system, HB 100 creates the position of Deputy Inspector General for the BWC and the IC. This person will answer to the state Inspector General, who is responsible for investigating wrongful acts or omissions committed by officers or employees of the two agencies.

In addition, the bill replaces the existing Worker's Compensation Oversight Commission, which many felt was ineffective and too far removed from the daily workings of the BWC, with a new board of directors, consisting of 11 members appointed by the governor. These members include representatives for employers, organized labor, experts in investments and securities, a certified public accountant, a licensed actuary and a member of the public, and will provide expertise and oversight of day-to-day bureau operations.

While the new board of directors does not include any legislators, HB 100 ensures that the General Assembly will continue to play an important role in establishing the broad policy goals of the BWC by creating the Workers' Compensation Council (WCC), which will help determine the costs and overall impact of any proposed legislative changes to the BWC, review financial reports and make recommendations to the General Assembly.

To increase professionalism, improve leadership and management and strengthen operations at both agencies, the Senate amended HB 100 to require that either the BWC administrator or the chief operating officer have at least five years of insurance experience. In addition, we made it mandatory for the BWC to have a full-time actuary on staff.

For employers and workers alike, transparency at the bureau is of utmost concern. Employers want to make sure the money they are paying into the worker's compensation system is being spent wisely, while workers want to make sure this money will be available to them should they become injured.

HB 100 seeks to bring more transparency in to the rate-setting process and ensure Ohio's rates are competitive with what employers are paying in other states, by requiring that within two years, the BWC administrator compare the rates and programs of other states, identify better rate-setting methods, and report these findings to the legislature and the board of directors.

For almost a century, Ohio's worker's compensation system has provided injured workers with much-needed compensation for accidents on the job, and it is important that Ohio's workforce continue to have this system to fall back on.

However, in order to move forward, we needed to make significant reforms that will benefit employers, employees and the financial future of the bureau and the state. I feel that we have taken significant steps toward this goal through passage of HB 100.

Sen. John Carey, R-Wellston, represents Ohio's 17th Senate District. This column first appeared in The Times Gazette. The newspaper's Web site can be found at:

http://www.timesgazette.com/

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