Workers’ Comp Settlement May Provide Payment to Ohio Employers

Kegler Brown E-mployment Alert

The Ohio Bureau of Workers' Compensation (BWC) sent on August 22 a Sworn Proof of Claim to all potential beneficiaries of a recent case settlement that may result in employers receiving settlement proceeds as soon as early 2015.

Did you receive a Sworn Proof of Claim?

The Sworn Proof of Claim must be completed and returned to the Settlement Administrator by mail postmarked no later than October 22, 2014. The Settlement Administrator will review the Proof of Claim and those that contain inaccuracies or insufficiencies will be returned to the employer to be corrected. The employer will have 20 days to provide the corrected Proof of Claim. Some employers may receive more than one Proof of Claim if the employer had more than one policy number during the period of eligibility.

The Sworn Proof of Claim is the result of settlement of the case, San Allen, Inc. v. Stephen Buehrer, Admr., that involved claims against the Ohio BWC alleging inequalities in premiums paid between group rated and non-group rated state-fund employers. In 2007, a group of plaintiffs filed a class action lawsuit against the Bureau alleging unjust enrichment and other constitutional and statutory violations. Class members were identified as employers who in one or more policy years from 2001 to 2008:

  1. subscribed to the state workers' compensation fund;
  2. were not group-rated; and
  3. reported payroll and paid premiums in a manual classification for which the non-group effective base rate was inflated due to application of the group rating plan.

The class was certified by the trial court and ultimately a verdict of nearly $860,000,000 against the Bureau was rendered. This verdict was reduced to approximately $651,000,000 following an appeal to the 8th District Court of Appeals. While the Bureau's appeal to the Ohio Supreme Court was pending, the parties reached a settlement in the amount $420,000,000.

Additional information regarding this issue can be obtained from the Bureau lawsuit website. A hearing on the final approval of the settlement is presently scheduled for November 19, 2014. It is anticipated that settlement payments to eligible employers will made in early 2015. The amount of the payment will depend in part on the number of eligible employers filing a Sworn Proof of Claim.

In addition the recently announced "A Billion Back" – pursuant to which the Bureau will likely mail rebate checks to state fund employers in October – many state funded employers now may be eligible to receive additional monies from the Bureau. Timely and complete filing of the Proof of Claim by October 22 is essential. Please contact Dave McCarty or Randall W. Mikes if you have any questions.