When I started with OIA more than five years ago this was one of the common questions I got from agents.
On the surface it looks like it may be possible
Ohio is one of only four remaining monopolistic/public workers’ compensation systems and by far the largest state that has such a system.
We have a robust and competitive insurance marketplace.
Republicans have dominated state government for the past 30ish years, so the political dynamics appear to be ripe to further an effort to transition to a privatized system.
It had also been more than three decades since the last time Ohio voters considered a constitutional amendment to move to a privatized workers’ compensation system. Since that time, Ohio voters have made some revolutionary public policy changes that we had previously rejected, like allowing casinos and medical marijuana.
The optics would lead you to believe a privatized system should be a top priority for public policymakers.
Obstacles overtake optics
While the optics look promising, there are several obstacles in the way. First is the debate over whether transitioning from a public to private system requires a constitutional amendment. Some Ohio legal scholars suggest that the Ohio Constitution provides for a compulsory state fund system but does not provide for a private compulsory system, so a constitutional amendment would be necessary. However, others suggest that the Ohio Constitution does not prohibit or limit the ability to privatize the workers’ compensation system, and that the Legislature could pass a bill.
Second, there is no crisis. For the most part, the Ohio system appears to be serving Ohio businesses and employees very well. Rates are at their lowest level in 40 years. In the last five years Ohio has given back billions of dollars in rebates to employers – over $5 billion. That B word adds up — so those are big checks Ohio employers have been cashing the past few years.
According to a national study, Ohio has the 11th lowest workers’ compensation premiums in the country. We reduced our rates by another 20% just this year, the 9th rate cut since 2008. And that’s coming on the heels of a 12% reduction in 2018.
Claims have dropped by almost 75% over the last 30 years. Many factors contribute to this, including changing workforce technology, lower estimates of future health care costs, and a greater focus on safer work environments.
In summary, as independent agents we strongly believe that choice and competition can only make a system better. However, it is unlikely that Ohio’s workers’ compensation program, given its current position, will transition anytime soon from the public to a private system. There is simply no crisis.
Call to Action
That being said, there is still a way that you as an independent agent can serve your clients. Enroll your commercial clients in OIA‘s workers’ compensation group rating or retro program.
We’ve partnered with CompManagement, a best in class third party administrator, to offer you a workers’ compensation program that gives you and your clients access to support, stability and savings beyond what the state provides.