Member Article

The Ohio General Assembly voted unanimously in 2015 to pass House Bill 207, which created a rating exception rule where a state-funded employer would not be adversely impacted by claims arising from motor vehicle accidents caused by third parties. If the state-funded employer can demonstrate that the motor vehicle accident subject of the work-related injury was caused by a third party who is clearly at fault, the claim is charged to the Surplus Fund rather than the employer’s risk experience. Given the often serious nature of motor vehicle accidents, this exception allows employers to avoid the costly implications for claims completely outside of their control and the often detrimental impact on their policies.

To qualify for this abatement, the employer bears the burden of demonstrating 1) it pays into the state fund; 2) the claim arose from a motor vehicle accident involving a third party; 3) the third party was issued a citation for violation of a law or ordinance regulating the operation of motor vehicle arising from the accident on which the claim was based; and 4) any form of insurance or uninsured/underinsured insurance coverage covers the third party.

After the claim is filed, the employer must submit a request with the BWC proving the aforementioned requirements via form AC-28. This all seems simple enough and is clearly beneficial to state-fund employers. However, the BWC’s recent election to strictly interpret the provision is in complete opposition to the spirit of the rule.

It is apparently a common practice that in cases where the at-fault party in a motor vehicle accident is fatally injured, the police department issues an accident report but not a citation given the obvious fact that the citation is essentially worthless. While this is logical, it causes a problem for a reimbursement request. The BWC has taken the position that the application must have a copy of the citation showing that the third party is responsible for the accident. This was not always the case. Initially after the law was passed, the BWC accepted a police or accident report in such circumstances instead of requiring a citation. However, after the BWC law division reviewed the bill, they determined there must be a citation issued to invoke the exception. Hence, claims where reimbursement was granted immediately after the passage of the bill are no longer eligible for reimbursement.

This strict compliance with the rule as written is out of touch with the spirit of the bill. There is no reason a citation should be required, especially if an insurance claim is filed and liability is accepted. Lobbyists and trade associations will certainly get involved to attempt to have the rule amended so that all accidents are treated equally. In the interim, the employer’s only relief is requesting review from the BWC adjudicating committee.