Is Ohio Testing The Waters Of Private Workers’ Compensation Insurance?

Ohio House Bill 268, introduced June 12, 2017, proposes allowing self-insured employers to contract with private insurers to indemnify them against their workers’ compensation liability. The legislation also eliminates prohibitions currently in place against insurance companies representing employers in the settlement, adjudication, or payment of claims.  Lastly, the legislation proposes establishing an additional self-insured employers’ guarantee fund, potentially allowing more employers to become self-insured.

Ohio is currently one of the few remaining monopolistic states in the U.S. However, Ohio permits larger employers to “self-insure” and administer and pay their own claims.  Ohio law currently permits self-insured employers to purchase excess coverage to indemnify themselves against losses exceeding fifty thousand dollars for any single claim.  The law prohibits contracts of indemnification for losses under fifty thousand dollars, and prohibits insurance companies from directly participating in the settlement, adjudication, or payment of claims.

The proposed legislation does away with the fifty thousand dollar requirement, allowing employers to be indemnified against all losses, and also removes the prohibition against insurance companies’ direct administration of claims.

It remains unclear whether this legislation will gain any traction. However, it opens the debate about whether allowing greater direct participation by insurance companies would be a good thing for Ohio employers and for the State of Ohio.

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