Ohio BWC Implements Changes to Salary Continuation Policy

The Ohio Bureau of Workers’ Compensation is tightening up its requirements for Ohio employers to take advantage of Salary Continuation. With the implementation of the new MIRA II reserving system, the BWC is projecting that as a general trend lost time claim reserves will be lower and for a smaller duration than they have been in the past. It does not seem coincidental that the reserve changes have gone hand-in-hand with changes that make it more difficult for employers to avoid a reserve completely through Salary Continuation.

As before, an employer must notify the BWC that it is paying salary continuation, must pay the injured worker his or her full wage (including the wages from a second job), must not skip a pay period, and must complete a C55 form. Now, however, the BWC has placed deadlines and increased requirements on employers.

First, the employer must notify the BWC that they will pay salary out of pocket in lieu of temporary total compensation within seven days of the filing of the First Report of Injury, or seven days from the onset of disability causing lost wages.

Next, the BWC will send the employer a “Salary Continuation Compliance” letter, which will start the clock ticking for the employer to submit a wage history for the 52 weeks prior to injury as well as a C55 form signed by the injured worker and employer. Failure to submit this paperwork within 14 days will result in the BWC paying TT and placing a reserve on the claim.

In the past, some employers were able to get around a particularly stringent BWC claims representative by appealing a TT issue to the Industrial Commission and getting a hearing officer to rule that salary continuation is being paid in the claim. However, the BWC has now made it clear that this back door approach will not work. If the Industrial Commission issues an order indicating that them employer is paying salary continuation, the BWC might reverse the TT payments, but they will not suppress the reserve on the claim.

Additionally, one of the most challenging parts of the BWC’s crackdown on salary continuation is that a new C55 agreement must be signed by both the injured worker and the employer every 45 days. The best solution, assuming that the injured worker can travel, is to require the worker to physically come to your office to pick up his or her salary continuation check. Once the 45 day period is running out, have the injured worker sign a new C55 when he or she comes in to pick up the check.

During a June 19, 2008 meeting, John Pedrick, BWC’s Chief Actuarial Officer, did admit that the BWC’s position on the worthiness of salary continuation will be re-evaluated in the future. For now, however, it remains a valid cost containment option for Ohio employers, even if it is more difficult with BWC imposed red tape.

Further details can be found on the BWC website at http://www.ohiobwc.com/infostation/content/1/1.2/1.2.3.23.4.htm.

For questions, call the Frost Brown Todd LLC Workers’ Compensation Department at 614-464-1211 or 513-651-6800.

Posted by: Noel C. Shepard