News and Updates
Category: 2019 Group Retro
Are Missing Group Retro Refunds Complicating Your Budget for 2022?
Back in August, we told you that Ohio BWC wouldn’t be paying Group Retrospective refunds to employers who participated in Retro during the 2018 and 2019 policy years. For the past 12 years, many businesses have counted on those checks to budget for the coming year. Normally, Retro refunds would have showed up last month (October), but this time those employers were left empty-handed. Companies that were anticipating tens of thousands (hundreds of thousands, in some cases) in Retro Refunds are now faced with an end of year shortfall and difficulty budgeting. Our actuarial department estimates that Group Retro refund totals for all participating policyholders during the 2018 and 2019 policy years would have been as follows: • $190,000,000 for the 2018 policy year • $155,000,000 for the 2019 policy year That’s $345 Million in refunds not being paid back! If you are concerned with how the state is managing your premium dollars - and more importantly, your refunds - you have options. Self-insuring is one option, or you can look into a partnership with SuretyHR through our Self-Insured PEO program. This provides a lot of the same savings and benefits of self-insuring for workers’ comp, but without the risk and financial burden of directly paying excess
Group Retro Updates: 2018, 2019 & 2020
We promised to keep you informed on the status of 2018 and 2019 policy year refunds from BWC’s Group Retro program. As it stands, no employers enrolled during those years will be receiving any refunds. Typically, in the fall of 2021 Group Retro participants should be receiving your first refund from the 2019 policy year and your second refund from the 2018 year. It’s important to understand that if these refunds are normally included in your budgeting process for the coming year, you should not factor that in. For more info on why BWC chose not to release these funds, and what Spooner is doing to help Ohio employers, check out our June blog entry on these missing Group Retro Refunds. If your company was enrolled in Group Retro for the 2020 year, your first refund will be paid out in the fall of 2022. Since the 2020 policy year recently ended, we also have an updated outlook on those returns. Out of the 45 total Private Employer Group Retro pools in Ohio, data from BWC shows that 31 of them will have an assessment for their first year (due in fall 2022). This means that companies in that pool will be billed by BWC for a portion of 2020 premiums instead of receiving a refund. This is largely due to BWC moving to a system called ACES to determine reserves on claims as of July 1, 2020. We believe BWC is open to discussing changes to some of the variables used to calculate refunds in response to the impact ACES is having on 2020 Group Retro
Why We Fight (For Your Group Retro Refunds)
Many Ohio employers have rejoiced over the big checks issued by Ohio BWC in the last few years, a boast that the state’s strategies that have yielded enough to share dividends with policyholders. While it’s easy to understand the excitement when you’re getting five, six, or even seven figure checks from BWC – we all know there’s no such thing as a free lunch. Many of the businesses gladly cashed those checks not realizing that Ohio BWC wouldn’t be sending checks for refunds earned from the Group Retrospective (retro) program for the 2018 and 2019 policy years. Employers who participate in the Group Retro program are rebated after the policy year ends, based on their group’s actual performance throughout the year. The pool establishes a premium level throughout the policy year - and when the actual losses come in lower than that, the consortium members are rebated their share of the difference. While no vendors were provided with the total that Group Retro refunds would have been for those years, Spooner’s actuarial department estimates that Group Retro refund totals for all participating policyholders during those years would have been as follows: • $190,000,000 for the 2018 policy year • $155,000,000 for the 2019 policy year These projections include what would be all three years of refund payments for each policy year, not just the first y
BWC Withholds 2018 & 2019 Group Retro Refunds
The BWC is not going to pay out 2018 & 2019 Group Retro refunds this fall. They have decided the dividend rebates issued for these policy years will take the place of 2018 and 2019 Group Retro refunds. We do not believe the dividend proposal passed by the Board of Directors gives the BWC the authority to eliminate Group Retro refunds. Spooner Incorporated is appealing this decision with the BWC, but we may not be able to do it alone. Please reach out to Brian Davis if you would like to join us in the fight to get the BWC to release the 2018 and 2019 Group Retro refunds this fall. Brian can be reached
