1. News Articles
  2. Related News Articles
News Article Details

Lawsuit: Ohio Workers' Comp Bureau Gave Unfair Discounts to Employer Groups

Posted on 23 Aug 2012 by Neilson

Facebook LinkedIn Twitter Google

Employee lawsuitEmployers in Ohio have filed a class-action suit against the state-run workers' compensation fund to seek compensation for what they say were excessive workers' comp premiums. Seven small employers filed the original lawsuit against the Ohio Bureau of Workers' Compensation in the Court of Common Pleas in Cuyahoga County in 2007.

The case was granted class-action status, and a trial is now underway before Common Pleas Judge Richard McMonagle.

The plaintiffs claim the bureau gave special discounts of up to 90% to some groups of employers while those not in a group paid higher premiums to make up the difference. The plaintiffs seek the return of $1.3 billion in excessive premiums from July 1, 2001 through June 30, 2007.

"To make these steep discounts possible, the bureau either ejected from its rolls or excluded from its membership all businesses that ever had a workers' compensation claim made against them," attorney Stuart I. Garson of Seaman Garson LLC, an attorney representing the plaintiffs, said on his website.

The bureau insures 250,000 employers, and had $1.8 billion in premiums at year end 2011, said Melissa Vince, a spokeswoman for the bureau, who declined to comment on the litigation.

Workers' compensation funds operate in many states as providers of coverage and often as insurers of last resort for employers who have difficulty obtaining coverage. In recent years, the overall workers' compensation sector has seen deteriorating underwriting results as payrolls fell and competition heightened.

In 2011, however, state funds saw a 7.1% rise in net premiums written slightly higher than the increase in A.M. Best Co.'s workers' compensation composite. Recently, amid generally soft conditions in the workers' compensation segment, the general market has been more open to writing policies for many of the companies that were previously insured by state funds.

As a result, according to a Best's Special Report, net premiums written by the state funds declined from 2004 through 2010.

That special report did not include the Ohio fund, which is one of just a few state-run workers' comp monopolies. The other monopolistic state funds, also not included in the report, are: North Dakota, Puerto Rico, Washington and Wyoming.