Businesses reaping big BWC rebates [The Blade, Toledo, Ohio]

Oct. 04--COLUMBUS -- Ray Zammit, owner of Complete Laundering Services in Oregon, knew he would be getting a rebate check from Ohio's government-run insurance fund for injured workers, but he didn't know how much it would be until he opened the mail.

"It was Christmas," he said.

The Bureau of Workers' Compensation will mail the final $81.7 million in rebate checks today, 8 percent of a total $1 billion, one-time giveback to employers thanks to strong investment earnings.

The last group of checks will go to about 2,000 employers who participate in a BWC group program that retroactively adjusts premiums based on how well the group as a whole kept costs down through workplace safety and claims management initiatives.

The BWC and Gov. John Kasich announced the rebate program for all employers in May, and the checks have gradually gone out over the summer and into the fall. In all, about 210,000 employers will have received checks.

Some $113 million of that went to local governments. Toledo used its $2.5 million check to hire more firefighters.

Bill Wersell, vice president of business development services with the Toledo Regional Chamber of Commerce, said the checks have not gone unnoticed and have given some good public relations for a change to the often-criticized BWC.

"At this point, none are putting it in their own pockets," he said. "In some cases, it's an opportunity to put in new equipment. These checks were substantial enough that they didn't have to go out to finance any kind of equipment purchases to advance their business or do upgrades to a computer system.

"All in all, it's been a very positive response," Mr. Wersell said. "BWC has not had a very good reputation with the business community, and this has really helped them to be considered more of an ally."

Complete Laundering Services, with 12 full-time employees, specializes primarily in cleaning gloves and other protective clothing used in the auto industry. It had just invested in three new dryers when Mr. Zammit opened the rebate check to find it made out for about $6,200. It basically paid for one of the dryers.

"We were expecting a rebate, but we weren't expecting that," Mr. Zammit said. "That's a lot of money for a small company, and it went right into our checking account to pay our bills."

He said he understands that this was a one-time situation. The BWC had been criticized a decade ago for often issuing rebates and group premium discounts that employers came to rely on and missed when they suddenly stopped.

The BWC's investment practices were placed under a microscope after The Blade revealed that Toledo-area coin dealer Tom Noe had stolen $13.7 million from $50 million in BWC investments in rare-coin funds he operated. Noe is serving an 18-year sentence for theft at the Hocking Correctional Facility.

The rebate was part of a three-pronged effort designed to give a break to employers that was projected to be worth $1.9 billion. The package also included:

-- A switch to prospective premium-payments beginning in 2015. Employers will pay premiums based on the six months to come instead of the six months just passed. As the one-time switch is made, the BWC will forgive a total of $900 million in premiums that would otherwise have been due for the look-back period.

-- A tripling to $15 million in matching grants to employers to help them improve workplace safety.

-- A 2 percent reduction next year in workers' compensation premiums for private employers and 4 percent for public employers.

The bureau has experienced a net annual investment return of 11.4 percent over the last three years.

"We've heard from public employers using their rebates to promote economic development or bolster their safety forces, and we've heard of private employers investing in workplace safety and professional development," said BWC Administrator Steve Buehrer, a former state representative and senator from Delta.

Meanwhile, BWC is fighting in the Ohio Supreme Court a Cuyahoga County order that it refund roughly $860 million to businesses from a lawsuit challenging the bureau's former group-rating system, in which certain groups of employers were given steep discounts on their premiums.

Contact Jim Provance at: or 614-221-0496.

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