safety & workers’ compensation committee...bwc offers easy ways to pay your workers’...
TRANSCRIPT
Safety & Workers’ Compensation Committee March 3, 2011
Table of Contents Agenda 2 OMA Policy Report
BWC Board of Directors Appointments
3 5
OMA News & Analysis
6
OMA Bill Tracker 13 OMA Counsel Report 14 Guest Speaker Bios 17 Guest Speaker Presentations
BWC Self Insured Securitization Model Moody’s CreditEdge Fact Sheet Moody’s RiskCalc Fact Sheet
20 33 35
Safex Report: Recent OSHA Activities
37
Supplemental Materials
BWC Actuarial Trend Report – February 2011 SB 5 Collective Bargaining HB 123 BWC Budget Bill -Includes Policy Changes
40 50 52
2011 Safety & Workers’ Compensation Committee Calendar Thursday, March 3, 2011 Thursday, June 23, 2011 Wednesday, November 9, 2011
OMA Safety & Workers’ Compensation Committee Meeting Sponsor:
OMA Safety & Workers’ Compensation Committee March 3, 2011
AGENDA
Welcome & Self-Introductions
Robert Truex, Lancaster ColonyCommittee Chair Statehouse Report
Public Policy Ryan Augsburger, OMA Staff
OMA Counsel’s Report
Tom Sant, Bricker & Eckler, L.L.P. Guest Presentation
Plans & Priorities for the agency
Steve Buehrer, Administrator Bureau of Workers’ Compensation
Update re implementation plans and time frames for the new Guaranty Fund securitization model for self insured employers
Tom Prunte BWC Employer Services
OSHA safety updated – detailing the current focus of the agency
Heather Tibbits Safex
Safety & Workers’ Comp Committee 2011 Thursday, March 3 Thursday, June 23 Wednesday, November 9 Please RSVP to attend this meeting (indicate if you are attending in-person or by teleconference) by contacting Judy: [email protected] or (614) 224-5111 or toll free at (800) 662-4463. Additional committee meetings or teleconferences, if needed, will be scheduled at the call of the Chair.
Thanks to Today’s Meeting Sponsor:
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PUBLIC POLICY REPORT – SAFETY & WORKERS’ COMP
TO: OMA Safety & Workers’ Comp Committee FROM: OMA Staff DATE: March 2, 2011 SUBJ: Safety & Workers’ Compensation Update
Overview Following his inauguration, Governor Kasich appointed former state senator Steve Buehrer as administrator of the Ohio Bureau of Workers’ Compensation (BWC). At the Industrial Commission (IC), the agency charged with adjudicating workers’ compensation claim disputes, Commission member Jodie Taylor was designated Commission chair, replacing Gary DiCeglio, who remains the labor representative on the Commission. Senior staff changes followed. Workers’ Compensation is always a hot political issue and so was campaign rhetoric of last year. It’s too early to say whether to expect far-reaching changes to the BWC and IC systems. The BWC and IC have free-standing budget legislation that is expected to be introduced this week. Usually this legislation is fast-tracked. The budget can be a vehicle for larger policy priorities.
Bureau of Workers’ Compensation Under the Strickland Administration, the BWC had been largely focused on implementation of actuarial studies to improve programs and policies that impact both state fund and self-insured employers. BWC policy changes implemented for 2009/2010 and 2010/2011 are being carried over for 2011/2012. The drug-free safety and deductible programs, group rating reforms, etc., are all staying intact for the 2011/12 plan year. The rate-making revisions were controversial even though the reforms were actuarially justified. A big question now is: will the corrected rate structure remain or will it be reversed or otherwise modified? Group-rated employers who saw their rates increase together with third party administrators and their group rating sponsors generally opposed the reforms.
Four new members were just appointed the BWC Board of Directors by Governor Kasich. They will help decide if rates should be mathematically correlated with risk. Rate reforms contributed to base rates at their lowest level in decades, enhancing competitiveness. The BWC Board acted last year to maintain the maximum group rating discount of 65%, with a graduated scheduled of break-even factors to further true up the discount levels; the effective top discount is 51%. Self-Insurance (SI) Reserving Revised Work was completed late last year on a policy shift to improve the soundness of the Self Insured Employers Guaranty Fund (SIEGF). The fund pays for residual claims coming from bankrupt firms. It has been a ‘pay as you go’ system and according to the Deloitte study, the SIEGF is exposed to greater risk than prudent.
Member representatives from the OMA, OSIAA and Ohio Chamber of Commerce formed a stakeholder group of self-insured company risk managers over a year ago. That group advised the BWC on alternative solutions for improving the financial issues and has supported reserving and security changes that are now being implemented. The work group is seeking a more formal structure for SI oversight, including adding an SI committee to the Board.
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Legislative Developments / Outlook Aside from the BWC and IC budget legislation, only a couple bills are being talked about. They have not yet been introduced.
Privatization / Competition: A legislative proposal to allow insurance companies to provide workers’ compensation coverage was introduced last session. Representative Todd Snitchler has re-drafted a version of his bill from last session. He was recently appointed to the Governor’s Cabinet to lead the Public Utilities Commission and will be leaving the House.
Representatives Peterson and Sears are expected to take over the bill. Large out-of-state insurers are driving the bill. The powerful domestic (meaning intra-Ohio) insurance community is vigilantly watching. While some Ohio insurers could easily compete in the WC market, they are more likely concerned about losing market share to large insurers from out of state.
The business community has been slow to embrace the change, potentially because there is no good data available to model the effects.
A coalition financed by the out-of-state insurers has cloaked itself as a good government reform entity. It was actively approaching employers to join its cause during late 2010. A solicitation for money might follow. Don’t be fooled. Continue to engage with the OMA Safety and Workers’ Compensation Committee to follow and drive BWC system changes. The OMA has produced a RetoolingOhio on workers’ compensation for members to use to understand the current environment and to use to advocate for meaningful cost-cutting reforms to drive down premium. Loss of Use Benefit Payment: Representative Anne Gonzales (R – Westerville) will soon introduce legislation to reverse a rule changed by the BWC in 2010 to require lump sum payments for loss of use injuries.
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February 18, 2011 Rob Nichols, (330) 760-7582, [email protected] KASICH ANNOUNCES APPOINTMENTS TO BUREAU OF WORKERS’
COMPENSATION BOARD OF DIRECTORS COLUMBUS – Today Gov. John R. Kasich announced appointments to the Bureau of Workers’ Compensation Board of Directors. Stephen E. Lehecka of Westfield Center (Medina County) has been appointed to serve for a term beginning February 18, 2011 and ending June 11, 2013. Mark J. Palmer of Bexley (Franklin County) has been appointed to serve for a term beginning February 18, 2011 and ending June 11, 2013. Dewey R. Stokes of Columbus (Franklin County) has been appointed to serve for a term beginning February 18, 2011 and ending June 11, 2013.
Nicholas W. Zuk of Westerville (Franklin County) has been appointed to serve for a term beginning February 18, 2011 and ending June 11, 2013.
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OMA News & Anaysis
Heard this Week at the BWC Board Meeting 02/24/2011
OMA staff auditing the public Bureau of Workers’ Compensation board of directors meeting and actuarial committee meeting this week noted:
• Liz Bravender of the BWC actuarial section gave a presentation that shows rising claim cost and decreasing premium trends for the BWC base and country-wide, as reported by the National Council on Compensation Insurance (NCCI). The average indemnity cost of a lost-time claim in the BWC system is $54K, and the average medical costs per lost-time claim are $42K.
• The BWC is considering the potential formation of a new NCCI manual classification for Potato Chip/Popcorn/Snack Chip manufacturers; this is an NCCI classification used in other states. OMA does not object to this potential development as new workers’ compensation classifications start out with the rates of the class where such employers were formerly reported, and then each class develops its own rate over time based on the class employers’ collective payroll and claims experience.
• While used by very few employers at this time, the BWC large deductible program with stop loss option may be modified to better match employer premium savings with risk brought to the system. Today the program can potentially give an employer too large a discount for the risk it brings to the system.
• BWC consultant, Deloitte, presented, but no action was taken on, a potential modification to modifying base rates. Currently the BWC only has a cap on rate increases; increases are are capped at +30%. The cap on rate decreases was eliminated two years ago. Deloitte feels there should be a +/-25% cap since a plus/minus cap is used in most other states and limits the amount that might be subsidized by other classifications.
• The Medical Committee of the Board reported that 25 out of the top 28 prescribed drugs paid for by the BWC are not in a generic form, and that the prescribed drugs that drive the largest costs to the system are the pain relievers, Oxycontin (oxycodone) and Percocet.
• Tracy Valentino, BWC chief fiscal & planning officer, gave the BWC’s Enterprise report, noting the BWC has just over $5 billion in net assets. An in-depth discussion ensued about the appropriate level of agency funding; the Audit Committee will entertain an in-depth review of net assets, funding and Board-set financial ratio targets next month.
OSHA Issues Enforcement Guidance On Personal Protective Equipment 02/17/2011
This week the Occupational Safety and Health Administration (OSHA) issued the Enforcement Guidance for Personal Protective Equipment in General Industry, a directive that provides enforcement personnel with instructions for determining whether employers have complied with OSHA personal protective equipment (PPE) standards. The directive was effective February 10.
Changes in this directive include clarifying what type of PPE employers must provide at no cost to workers and when employers are and are not required to pay for PPE.
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Under these standards, employers are required to provide – at no cost to workers – protective equipment, such as goggles and face shields that fit properly without restricting vision; earplugs and earmuffs when they will reduce noise to acceptable levels and are less costly than administrative and engineering controls; and respirators to protect workers from exposure to air contaminants. Additionally, the directive lists PPE and other items exempted from the employer payment requirements and includes questions and answers useful in clarifying PPE payment concerns. Visit OSHA's Safety and Health Topics page on Personal Protective Equipment for more information.
OMA has a webinar planned for May 26 that will help members understand the steps of conducting a PPE assessment and how to review their programs for compliance with the OSHA standard.
BWC Offers Easy Ways to Pay your Workers’ Compensation Premium Due February 28 02/11/2011 State fund employers have until midnight February 28, 2011 to file payroll reports and pay workers’ compensation premiums for the period covering July 1 through December 31, 2010.
BWC offers a number of options for reporting and paying. You can pay online at ohiobwc.com, in person at any BWC location or by calling 1-800-OHIOBWC. Online payment allows you to future date your payments. BWC also has a paperless payroll option that sends e-mail alerts with a secure link that allows you to complete your payroll reports and make payments online. Click here to enroll.
Drug Free Workplace Program - Like Wearing Your Seat Belt 1/25/2011
OMA Connections Partner, Working Partners®, helps employers implement and maintain drug free workplace programs. A brief prepared by Working Partners explains that employers should look beyond immediate payback on their investment in a drug free workplace program to the preventative benefits.
OMA members can get free analyses of how the Bureau of Workers’ Compensation Drug Free Safety Program (DFSP) options will impact their workers’ compensation premiums. Contact OMA’s Greg Vergamini or Sam Heydinger to find out how. The next deadline for enrollment in the BWC DFSP is April 30; this is a good time to evaluate the benefits.
Employers New to BWC Drug Free Safety Program Have Compliance Deadline Next Week 01/27/2011
Employers that enrolled in the January 1, 2011, Bureau of Workers’ Compensation (BWC) Drug-Free Safety Program (DFSP) need to fulfill requirements by the end of January. OMA Connections Partner, Working Partners®, has found that employers new to the program are not aware of the requirements.
Working Partners is offering a free webinar next week to catch employers up on the BWC DFSP program features and requirements. Click or call (866) 354-3397 to register or for more information.
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OSHA Backs Off a Proposed MSD Record keeping Requirement 01/26/2011
The U.S. Department of Labor's Occupational Safety and Health Administration (OSHA) announced this week that it has temporarily withdrawn from review by the Office of Management and Budget its proposal to restore a column for work-related musculoskeletal disorders (MSDs) on employer injury and illness logs. The agency has taken this action to seek greater input from small businesses on the impact of the proposal.
According to OSHA’s press release, the proposed rule would not change existing requirements about when and under what circumstances employers must record MSDs on their injury and illness logs. While many employers are currently required to keep a record of work-related MSDs on the OSHA Form 300 (Log of Work-Related Injuries and Illnesses), the vast majority of small businesses are not required to keep such records.
The National Association of Manufacturers submitted extensive comments on the burdensome affect of this proposed record keeping rule last year.
OSHA Withdraws Proposed Interpretation on Occupational Noise 01/19/2011
On January 19, the Occupational Safety & Health Administration (OSHA) announced it will withdraw its proposed "Interpretation of OSHA's Provisions for Feasible Administrative or Engineering Controls of Occupational Noise." The reinterpretation would have required significant new, costly engineering controls to abate noise.
In OSHA’s release, assistant secretary of labor for occupational safety and health, Dr. David Michaels, said, "Hearing loss caused by excessive noise levels remains a serious occupational health problem in this country. However, it is clear from the concerns raised about this proposal that addressing this problem requires much more public outreach and many more resources than we had originally anticipated. We are sensitive to the possible costs associated with improving worker protection and have decided to suspend work on this proposed modification while we study other approaches to abating workplace noise hazards."
OMA acknowledges the work of the National Association of Manufacturers for amplifying manufacturing’s voice on this issue.
Ohio employers can access consulting on noise mitigation at no charge through the Bureau of Workers’ Compensation (BWC) Division of Safety & Hygiene; contact your nearest BWC office and request to work with an industrial hygienist.
January Meeting of BWC Board of Directors Cancelled 01/14/2011
The Bureau of Workers’ Compensation (BWC) announced today that its January meeting of the Board of Directors has been cancelled. It is expected the BWC Board of Directors Nominating Committee will meet in the coming weeks to provide candidate recommendations to Governor John Kasich, who will then appoint four people to seats that are currently vacant.
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According to the release, BWC Administrator Steve Buehrer said, “I’m confident there is a strong pool of candidates who will represent the interests of Ohio’s workers’ compensation community. I look forward to working side-by-side with the BWC Board of Directors in changing the course of the state’s economic climate through effective decisions that will positively impact the care of injured workers and the business success of Ohio employers.”
The BWC Board of Directors was created by the 127th Ohio General Assembly in House Bill 100 and supported by the OMA. The Board is comprised members representing employees (one member), employee organizations (two members), employers (three members), and the public (one member). The Board also includes two members who are professionals with expertise in investments and securities, a certified public accountant and an actuary. There are a total of 11 board members.
The board directs a nominating committee to submit four applicants to the Governor for each vacant seat. The four current vacant seats include representatives of self-insured employers and employee organizations, as well as an actuary and an investment and securities expert. The Governor will also appoint a Board chairman. The next meeting of the BWC Board of Directors is scheduled for February 24, 2011.
NAM Seeks Your OSHA Noise Proposal Input 12/17/2011
The National Association of Manufacturers (NAM) is leading the charge with a coalition of more than 100 trade associations to fight OSHA’s costly proposal to mitigate noise exposures. As previously reported here, OSHA has announced plans to require extensive “engineering and administrative” controls to protect employees from workplace noise instead of using primarily personal protective equipment. All but companies that “would be put out of business” would be required to make changes, regardless of cost.
Earlier this month, OSHA granted NAM’s request for a 90-day extension for comments, which are now due March 21, 2011. The proposal may go into effect as soon as the end of the comment period; OSHA has not indicated an implementation date, adding further uncertainly.
To accurately assess the harm to your company, NAM has created an online survey to collect data. The safety compliance staff at your company is urged to submit information. The data will be used anonymously unless you specify otherwise. If you have time to do more, contact your Congressional representatives. And consider financially supporting this initiative; NAM has retained outside counsel to effectively file regulatory comment on this costly proposal.
BWC Writes New Contract with MCOs that Ups Performance Focus 12/16/2011
The Bureau of Workers’ Compensation (BWC) contracts with the state’s workers’ compensation managed care organizations (MCOs) to medically manage workplace illnesses and injuries. BWC has finalized a new two-year performance-based contract that goes into effect January 1, 2011.
“I think the most significant improvement in this contract is that the BWC will base almost half of the MCOs’ compensation on their effectiveness in returning injured workers safely to work,” said
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OMA’s president, Eric Burkland. “The vision for the MCO model was always quality of care and demonstrated performance. We want to best medical management for Ohio’s injured workers”
The MCOs will be measured on a new metric, measurement of disability (MoD), which the BWC says will do a better job of measuring return-to-work effectiveness than the old degree of disability management measure. One difference is that the new measure looks at actual return-to-work dates and not release-to-work dates.
“Employers choose their MCOs in the biannual open enrollment periods held by the BWC; this new metric should help employers discern the best MCO for their workers,” said Burkland.
Ohio Workers’ Compensation Rate Reductions Documented 12/16/2011
The Oregon Premium Ranking Study, a well-known workers' compensation industry resource, recently reported that Ohio’s workers’ compensation base rates rank 17th highest in the country as of July 2009. This is down from third highest in the country over a two-year period.
A recent study by BWC’s Actuarial Division shows Ohio’s 2010 average base rates to be at $1.95 per $100 of employer payroll, putting Ohio in the mid-range of the nation for workers’ compensation costs.
Next BWC Chief Says He Will Focus on Rates, Benefits and Private Options 12/16/2011
The Gongwer News Service reported last week that Senator Steve Buehrer (R-Delta), the next head the Bureau of Workers’ Compensation (BWC) selected by Governor-elect John Kasich, comes to the position with specific areas of interest.
According to Gongwer, Buehrer wants to examine: partially privatizing the system to allow private insurers to compete with the BWC to write policies; assessing current rate policies to see how to reduce and stabilize rates; and studying the benefits injured workers receive to determine if they are too generous.
He also plans to review the rate reforms that ended subsidies of group rated employers’ premiums by non group rated employers’ premiums. He also plans to study the appropriateness of the system’s level of reserves.
Ohio’s Intentional Tort Law Challenged 12/10/2011
Employer liability for work place safety will be considered by a state appeals court. Earlier this decade the OMA supported a law change that clarified that employers could only be sued for damages by injured workers under a limited set of circumstances.
The injured worker is entitled to workers' compensation benefits regardless of fault; however the “intentional tort” concept allows for the employer to be sued for damages on top of workers’ compensation.
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A Cleveland trial court seems to believe the state law was unclear. There are significant ramifications on employers' liability and insurance premiums if the state law is not upheld upon appeal. The OMA will follow the case and file an amicus brief if further appeals occur.
Some Employers Seeing Group Retrospective Rating Plan Offers – Should You Bite? 12/09/2010
This is the time of year when employers are soliciting and receiving proposals for workers’ compensation group rating plans.
Some employers - that due to worse-than-average-claims experience or large payroll size - are receiving proposals for group retrospective rating programs from various workers compensation third party administrators (TPAs).
Unlike the BWC group rating program which offers a premium discount, the Bureau of Workers’ Compensation (BWC) group retrospective rating program comes with a specific set of financial risks for employers. The OMA has prepared a white paper about the potential pros and cons of the BWC group retrospective rating program.
Workers’ compensation group rating continues to be the best premium saving program for many, but not all, Ohio employers. That’s why the OMA has created a suite of management reports that help state fund employers make the best program and product decisions for their companies. OMA members who buy their workers compensation services through the OMA should go to www.ohiomfg.com and click on My OMA to access their custom reports. All other employers should submit a BWC AC3 form to OMA to get their own set of custom reports at no charge.
Take Action Against OSHA Noise Regulations 12/10/2011
The OMA has been advising members about potentially costly new OSHA regulations on noise standards. Compliance with the new regulations will impose significant costs on manufacturers.
OMA member American Trim, Lima, has developed a model letter for manufacturers to use in communicating concerns to OSHA. Be sure to copy your member of Congress and U.S. Senator. Forward a copy to the OMA, as well.
BWC to Hold Webinar on New Securitization Model for Self Insured Employers 12/02/2011
The Bureau of Workers’ Compensation (BWC) Finance and Reserve Working Group has developed a new securitization methodology and process for self-insured Ohio employers. The aim of the working group was to better match risk exposures of self-insured employers to collateral held by the BWC, thereby protecting the guaranty fund.
The working group invites the state’s self-insured community to a webinar presentation of the group’s findings and the rollout plan for the new securitization model and process.
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The free one-hour webinar will be held on Thursday, December 9 at 3:00 p.m.
BWC Changes Salary Continuation Rules January 2011 11/24/2011
For years, Salary Continuation has been one tool Ohio state fund employers have used to keep workers’ compensation indemnity and claim reserve costs out of their workers’ compensation claims experience in order to control premiums.
Beginning January 1, 2011, the BWC will begin applying the costs of claim reserves to claims in which Salary Continuation is used, affecting claims with a date of injury on or after January 1, 2011.
There are pros and cons. Read the briefing prepared by OMA workers’ compensation account manager, Jay Kemo.
Changes to Self-Insurance Highlighted to Manufacturers 11/19/2011
The OMA Safety and Workers' Compensation Committee this week heard a detailed presentation about the Bureau of Workers' Compensation (BWC) plan for self-insured (SI) guaranty fund security.
BWC Executive Tom Prunte described a new system for evaluating the financial health of existing and new SIs. The change, which will go into effect in January, will establish financial and risk criteria that will govern financial security requirements for the state's SI employers.
OMA members have been working with BWC management and other stakeholders for more than a year to develop the improvements. A brief fact-page has been developed for your usage.
OMA Workers Compensation Committee Meeting Materials – 11/18/2011 11/18/2011
The OMA Safety and Workers' Compensation Committee this week heard a detailed presentation about the Bureau of Workers' Compensation (BWC) plan for self-insured (SI) guaranty fund security.
BWC Executive Tom Prunte described a new system for evaluating the financial health of existing and new SIs. The change, which will go into effect in January, will establish financial and risk criteria that will govern financial security requirements for the state's SI employers.
OMA members have been working with BWC management and other stakeholders for more than a year to develop the improvements. A brief fact-page has been developed for your usage.
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Workers' Compensation Legislation Prepared by: The Ohio Manufacturers' Association
Report created on February 25, 2011
HB123 WORKERS' COMPENSATION BUDGET (HOTTINGER, J) To allow the administrator of Workers' Compensation to waive criteria certain public employers must satisfy to become self-insuring employers; to require bills for medical and vocational rehabilitation services in claims that are ultimately denied to be paid from the Surplus Fund Account under specified circumstances; to make appropriations for the Bureau of Workers' Compensation and for the Workers' Compensation Council for the biennium beginning July 1, 2011, and ending June 30, 2013; and to provide authorization and conditions for the operation of the Bureau's and the Council's programs.
All Bill Status: 3/1/2011 - House Insurance, (First Hearing) 2/24/2011 - Introduced
More Information: No link available HB124 INDUSTRIAL COMMISSION BUDGET (HOTTINGER, J) To set appropriations for the Industrial
Commission for the biennium beginning July 1, 2011, and ending June 30, 2013, and to provide authorization and conditions for the operation of Commission programs.
All Bill Status: 3/1/2011 - House Insurance, (First Hearing) 2/24/2011 - Introduced
More Information: No link available
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OMA Safety & Workers' Compensation Committee Counsel's Report
Thomas R. Sant, Bricker & Eckler LLP Counsel to the OMA
March 3, 2011
ADMINISTRATIVE ACTIONS A. Industrial Commission
1. It was reported to the Committee in November 2010, that the Industrial Commission had suspended video hearings in its offices at Portsmouth, Logan, Mansfield, Cambridge and Lima as of November 8, 2010. The suspension arose largely because communications sent to the Industrial Commission by both claimant and employer counsel indicated that the video hearings did not afford the parties the ability to present their cases to the Industrial Commission hearing officer face to face. The Industrial Commission, as reported, convened the Ad Hoc Rules Advisory Committee to discuss the future of video hearings prior to November 8, 2010. At that meeting, the value of video hearings was thoroughly discussed and thereafter, the chairman of the Industrial Commission, Gary DiCeglio, suspended the video hearings.
A subsequent meeting of the Ad Hoc Rules Advisory Committee further discussed the video hearing issue. Currently, the Industrial Commission is studying the issue and will determine whether and when video hearings will be reinstituted. The video hearings continue to be on hold at the present. In all likelihood, should the Industrial Commission reinstitute video hearings, the issues heard via that medium will be C92s, SHO C92 reconsiderations, SHO Miscellaneous docket hearings, and additional hearings by agreement of the parties when a last-minute travel issue prevents a traveling hearing officer from arriving at a hearing location in a timely fashion. Hearings involving permanent total disability, VSSR and fraud will most likely not be heard via video hearing.
2. On January 14, 2011, Governor Kasich appointed Jody Ann Taylor chairperson of
the Industrial Commission. Chairperson Taylor initially was appointed by Governor Strickland as the employer member and has had extensive experience with Industrial Commission and workers' compensation matters. She worked at the Industrial Commission for several years and then handled employer workers' compensation issues for two Columbus law firms. Shortly after her appointment as chairperson, Ms. Taylor terminated the services of Industrial Commission
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Executive Director Christa Deegan and hired Timothy Adams, who had previously served as Executive Director.
B. Bureau of Workers' Compensation After being named as administrator of the Bureau of Workers' Compensation, Steven Buehrer, former state senator from Delta, Ohio, appointed Jason Rafeld as general counsel, replacing James Barnes, who had previously served in that capacity during Marsha Ryan's administration. Mr. Rafeld is very familiar with the Bureau of Workers' Compensation, having served as an assistant administrator and director of special investigations for several years during the James Conrad administration. After leaving the Bureau of Workers' Compensation, Mr. Rafeld served as an officer in the United States Navy for several years, and then attended and graduated from law school and has been practicing in Columbus for several years. LITIGATION A. State of Ohio, ex rel. Raymond V. D'Amico v. Ohio Bureau of Workers' Compensation,
Franklin County Court of Common Pleas, Case No. 09CV 11303
At the November meeting of this committee, it was reported that the Common Pleas Court ordered the Bureau of Workers' Compensation to disclose to Mr. D'Amico addresses and telephone numbers for workers' compensation claimants identified by either claim number or the date the claimants filed their claims with the Bureau of Workers' Compensation, for the years 2008 through November 2009. The Court further ordered that Mr. D'Amico's request be honored, assuming it complied with the mandates of § 4123.88(D). Pursuant to that statute, Mr. D'Amico is prohibited from using the disclosed claimant information for any and all purposes that violate the anti-solicitation provisions of § 4123.88(A). The Bureau of Workers' Compensation initially appealed that decision to the Franklin County Court of Appeals. However, it dismissed its appeal on October 6, 2010. In November 2010, Mr. D'Amico filed a Motion to Compel the Bureau of Workers' Compensation to comply with the Court's order, referred to above. The Bureau of Workers' Compensation filed a Memorandum Contra Mr. D'Amico's Motion to Compel. The Court denied the Motion to Compel and stated that the Bureau of Workers' Compensation was neither required nor permitted to disclose claimant information to Mr. D'Amico when it knew that it would be used to solicit business in violation of Ohio Revised Code § 4123.88(A). This order was based on the fact that Mr. D'Amico's company, HardNation, was using the information provided for purposes of solicitation, and that the Bureau of Workers' Compensation became aware of this improper purpose in November 2009. The Court declared the Bureau of Workers' Compensation had no duty to disclose claimant information after November 2009. B. Larry Hewitt v. The L.E. Myers Co., et al., Cuyahoga County Court of Appeals, Case no
CA-10-096138 After a four-day trial, a Cuyahoga jury returned a verdict in favor of Larry Hewitt against L.E. Myers Company in the amount of $597,785. The jury found in favor of the L.E. Myers with respect to the issue of punitive damages.
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Mr. Hewitt was an apprentice lineman for the L.E. Myers Company, the largest installer of transmission lines in the United States, when a piece of equipment he was holding, hit a wire sending an electric shock through his arm and hand, causing first, second and third degree burns. Mr. Hewitt challenged the 2005 intentional tort statute, § 2745.01, Ohio Revised Code, which indicated that employees injured on the job are only entitled to receive only workers' compensation payments, except when there is a willful intent to injure. Mr. Hewitt argued that the defendant ignored employee safety because it allowed Hewitt to be in a lift bucket without a supervisor and to work near lines carrying more than 500 volts. It was also argued that L.E. Myers required apprentices to wear leather gloves instead of the rubber gloves and sleeves that would have protected him from shock and that the facts of this case complied with the narrow provision in § 2745.01 that allowed for damages. Subsequent to the jury verdict, the Court ruled that Ohio Revised Code § 2745.01 is constitutional and that it was applicable to the case in point. The Notice of Appeal was filed on December 7, 2010, and the opening brief is to be filed on or before March 2, 2011. Obviously, this is a case of interest and it will be followed as it makes its way to the Supreme Court.
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OhioBWC - Common: Stephen Buehrer Administrator/CEO Stephen Buehrer
Ohio Governor John Kasich appointed Steve Buehrer as Administrator of the Ohio Bureau of Workers’ Compensation in January 2011. He leads an agency of 2,200 employees that serves more than 225,000 employers and 1.3 million injured workers.
Known for his focus on fiscal responsibility, creating jobs, and emphasizing technology, Steve has helped engineer significant improvements within various levels of government over the past 20 years. He also has extensive experience with workers’ compensation, previously serving as BWC’s Chief of Human Resources. As a senator, Steve also was appointed the chairman of the Insurance, Commerce and Labor committee which oversaw all workers’ compensation legislation.
Steve was a member of the Ohio Senate from 2007 until 2010. In addition to serving as the chairman of the Insurance, Commerce and Labor committee, he also was vice chairman of the Senate Highways & Transportation committee. In addition, Steve’s colleagues elected him majority whip, the fourth ranking leadership position in the Senate. He also received the Technology Advocate Legislator of the Year award for 2010 from Technology for Ohio’s Tomorrow. He won five Watchdog of the Treasury awards and was named National Legislator of the Year by the American Legislative
Exchange Council in 2002.
Steve also served as a state representative for Ohio's 82nd House District (Defiance, Fulton and Williams counties). First elected in 1998, he was subsequently re-elected in November 2000, when his district became the 74th, and again in November 2002 and 2004. Steve’s peers in the House recognized his leadership by electing him assistant majority floor leader for both the 124th and 125th General Assembly. As chairman of the State Government committee, he had responsibility for all workers’ compensation legislation.
During his second and third terms as representative in the Ohio General Assembly, Steve authored and passed Ohio's two-year transportation budget, which provided funding for highway projects across the state. This legislation recreated the state’s transportation funding structure and provided additional transportation-related support for state and local governments.
Beyond his legislative experience and accomplishments, Steve also has extensive experience in state government. Aside from serving as the Chief of Human Resources at BWC, he also was the Director of Legislative Affairs at the Ohio Bureau of Employment Services. Following that assignment, Steve served six months at the Ohio Department of Human Services, at the request of Governor George Voinovich, assisting with multiple management-improvement initiatives. He later accepted a position as Deputy Director at the Ohio Department of Administrative Services where he oversaw the communications and legislative offices and later the State Human Resources Division.
Steve earned a bachelor’s in social studies education graduating summa cum laude from Bowling Green State University. He later earned his juris doctor from Capital University Law School graduating cum laude. He’s married to his wife Cathy and has three sons, Benjamin, Simon and Daniel.
Schedule request
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Biographical Data Form Name Tom Prunte Business Address 30 W. Spring Street, L22, Columbus, Ohio Employer's Name/Department BWC, Employer Management Services Telephone (614) 466-3672 Present Position Executive Director Describe professional experience, credentials or areas of expertise: Tom received a B.A. in Political Science from The Ohio State University (1979) and a J.D. from Capital University (1982), Ohio Bar License (1982). His prior work experience as Staff Counsel, Ohio State Medical Board, various legal and regulatory positions over twenty (20) years at Nationwide Insurance, ending as Associate Vice-President – General Counsel, and most recently, Chief Legal Officer, Adena Health Systems. At Nationwide and Adena Tom was responsible for strategic planning and management of compliance and risk management functions, focusing on Best Practices’ concepts and process efficiencies. Tom is a member of the Ohio State Bar Association, American Health Lawyers Association and volunteer in “Save the Dream” program (Ohio Legal Aid project to assist indigent with foreclosure issues).
18 of 58
Heather Tibbitts Heather Tibbitts has a B.S. in Industrial Hygiene from Ohio University where she completed course work in industrial hygiene and occupational safety. Prior to joining Safex, Heather worked as a consultant for PSARA Technologies and as a safety manager/industrial hygienist for BF Goodrich Hilton Davis in Cincinnati, OH. While with PSARA, Heather instructed and presented various sections of the OSHA 40 Hour, OSHA 8-Hour Hazardous Waste training courses. Her consulting experience included serving as the Site Health and Safety Officer during a PCB contaminated soil remediation project. At BF Goodrich, Heather was responsible for facility safety for a 24-hour chemical manufacturing operation, which used many water reactive, flammable, and highly hazardous chemicals. The facility employed more than 300 union and non-union employees. Heather conducted safety inspections and accident investigations, performed safety reviews of potential equipment for installation, and wrote and revised programs for compliance with OSHA regulations. She directed the industrial hygiene air and noise sampling and monitoring programs for the facility. Additional duties included responsibility for the Emergency Response Team for which she conducted monthly and annual training to meet the OSHA requirements. Heather is currently a Team Leader overseeing industrial hygiene and safety staff. She develops proposals, coordinates staffing of projects, and ensures customer satisfaction. Additionally, Heather is supporting a municipality, a chemical manufacturer and a heavy manufacturer with their safety programs. Her responsibilities include indoor air quality and industrial hygiene monitoring, accident investigations and tracking and safety committee leadership. Heather has performed more than thirty (30) Job Safety Analysis’ for an axle manufacturer, industrial hygiene assessments in multiple industries that include developing industrial hygiene sampling schemes, calibrating industrial hygiene equipment, conducting air and personal industrial hygiene monitoring, submitting samples to laboratories, and interpreting analytical data. Heather has also performed sound level mapping and personal noise dosimetry in various occupational environments. Heather has conducted indoor environmental air surveys to evaluate airborne bacteria and fungi for a large medical center, steel foundry, various commercial properties, municipal buildings, schools, and residential properties. Heather has also developed remediation workplans and conducted post remediation air surveys. Heather has developed a variety of written health and safety programs including a Legionella Control Policy for a nursing home and a Microbiological Organism Control Program for an automobile manufacturer. Heather has led training courses for Recordkeeping, the OSHA 40-hour HAZWOPER, OSHA 10-hour for general industry and construction, industrial hygiene monitoring, blood borne pathogens, ergonomics, respirator programs workshop, PPE selection, hazard communication, noise/hearing conservation, climate related injuries, and supports the training team for the Ohio BWC Respirator Fit Test Course. Heather has completed the 40-hour HAZWOPER, OSHA 10-hour for General Industry, Permit Required Confined Space course, a 2.5 day Respirator Fit Test Course, Hearing Protection and Conservation Course, and has completed her 8 Hour Refresher for 2010. Heather is the current President of the Central Ohio American Industrial Hygiene Association. Heather is also an active member of the Licking County Safety Council.
19 of 58
Self-
Insu
ranc
e Se
curit
izat
ion
Mod
elF
inan
cean
dR
eser
veW
orkg
roup
Rep
ort
Fin
ance
and
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erve
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kgro
up R
epor
t
OM
A S
afet
y &
Wor
kers
’ Com
pens
atio
n C
omm
ittee
Mee
ting
Mar
ch 3
, 201
1
1
20 of 58
Self-
Insu
ranc
e (S
I) St
akeh
olde
r Fi
nanc
ean
dR
eser
veW
orkg
roup
Fina
nce
and
Res
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Wor
kgro
upo
Sprin
g 20
09: B
WC
ask
s th
e O
hio
Sel
f-In
sure
rs
pg
Ass
ocia
tion,
the
Ohi
o M
anuf
actu
rers
’ Ass
ocia
tion
and
the
Ohi
o C
ham
ber
of C
omm
erce
to a
ssis
t with
sol
utio
ns fo
r is
sues
with
the
Sel
f-In
sure
d E
mpl
oyer
s’ G
uara
nty
Fun
d.p
yy
oA
pril
2009
: Stu
dy b
y D
eloi
tte C
onsu
lting
incl
udes
re
com
men
datio
ns r
elat
ed to
the
fund
ing
and
adm
inis
trat
ion
ofse
lfin
sura
nce
inO
hio
adm
inis
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ion
of s
elf-
insu
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Ohi
o.
oA
ug. 2
4, 2
009:
Rep
rese
ntat
ives
of t
he S
I com
mun
ity
mee
t with
BW
C A
dmin
istr
ator
Mar
sha
Rya
n an
d ot
her
yse
nior
BW
C s
taff
to r
evie
w D
eloi
tte’s
rec
omm
enda
tions
an
d di
scus
s so
lutio
ns to
thei
r is
sues
.
2
21 of 58
Wor
kgro
up M
embe
rsC
athe
rine
Duh
igg
Gan
non
OM
A/O
SIA
/Eat
on C
orpo
ratio
np
Ste
ve H
atto
nO
SIA
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erva
lu H
oldi
ngs
Loyd
Hud
son
OS
IA/A
mer
ican
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ctric
Pow
er
Pau
lPic
colin
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icco
lini
Ohi
o C
ham
ber
of C
omm
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/ Mur
ray
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rgy
Cor
pora
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ente
rsB
ill T
hom
pson
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dit R
isk
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ager
, Am
eric
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lect
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ower
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Whi
tley
Vic
e P
resi
dent
of C
orpo
rate
Ban
king
, Fift
h T
hird
Ban
k
3
22 of 58
Fina
nce
and
Res
erve
Wor
kgro
upo
Issu
es fe
ll in
to fo
ur m
ajor
are
as:
1.C
ompa
ny fi
nanc
ial s
ecur
ity p
roce
ss;
py
yp
;2.
Liab
ility
det
erm
inat
ion;
3.C
laim
s m
anag
emen
t;4
GI
4.G
over
nanc
e Is
sues
oW
orkg
roup
felt
it w
as c
ritic
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add
ress
sec
uriti
zatio
n an
dlia
bilit
yfir
st;c
laim
san
dpo
licy
orgo
vern
ance
and
liabi
lity
first
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and
polic
y or
gov
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nce
issu
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ext.
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roup
held
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tings
thro
ugho
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10o
Wor
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up h
eld
mon
thly
mee
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thro
ugho
ut 2
010.
oW
orkg
roup
eva
luat
ed s
tudi
es fr
om D
eloi
tte a
nd M
arsh
, w
hich
rec
ogni
zed
the
need
for
chan
ges.
g
g
4
23 of 58
Iden
tifie
d R
isk
Expo
sure
oZ
-sco
re m
odel
has
lim
ited
relia
bilit
y (4
3 pe
rcen
t)
oD
ata
from
Rep
ort o
f Pai
d C
ompe
nsat
ion
and
Sta
tistic
al In
form
atio
n(S
I-40
) is
inad
equa
te to
de
term
ine
full
liabi
lity
risk
due
to:
dete
rmin
e fu
ll lia
bilit
y ris
k du
e to
: •
No
repo
rtin
g of
futu
re li
abili
ties;
•N
o lo
ss d
evel
o pm
ent o
r in
curr
ed b
ut n
ot r
epor
ted
pp
prov
isio
ns.
oT
he r
isk
to a
ll S
I em
ploy
ers
coul
d be
sig
nific
ant i
n th
tt
dt
idf
ti
kth
at c
urre
nt p
roce
ss d
oes
not c
onsi
der
futu
re r
isk.
oT
he c
olla
tera
l doe
s no
t mat
ch r
isk/
expo
sure
.
5
24 of 58
Rec
omm
enda
tions
oM
atch
sec
urity
to d
egre
e of
cre
dit r
isk
and
degr
ee o
f cl
aim
s ris
k.
oU
se m
ore
soph
istic
ated
fina
ncia
l too
ls s
uch
as
Moo
dy’s
Ana
lytic
s E
DF
Rat
ing.
oD
evel
op/a
cqui
re g
reat
er fi
nanc
ial u
nder
writ
ing
capa
bilit
ies
and
expe
rtis
e at
BW
C.
oR
equi
re g
reat
er in
form
atio
n fr
om S
I em
ploy
ers,
suc
h as
res
erve
dat
a an
d ex
cess
cov
erag
e to
bet
ter
unde
rsta
ndth
etr
ueris
kto
the
SIE
GF
.un
ders
tand
the
true
ris
k to
the
SIE
GF
.
oM
ake
self-
insu
ranc
e si
mpl
er, e
asie
r to
und
erst
and
and
adm
inis
ter.
6
25 of 58
SI R
isk
Prof
ile M
atrix
Effe
ctiv
e Ja
nuar
y 20
11C
RED
ITR
ISK
CR
EDIT
RIS
KSize Bucket
Reserve
Minim
um
Moo
dy's EDF Ra
ting
/ LOC Ra
ting
Factor
LOC Size
Factor
A3 or Highe
rBa
a1Ba
a2Ba
a3Ba
1Ba
2Ba
3B1
or Lower
0%0%
0%25%
50%
75%
100%
100%
10$ 12,000,000
100%
LOC
% o
f Res
erve
0%0%
0%25%
50%
75%
100%
100%
C L A I
9$ 7,300,000
90%
LOC
% o
f Res
erve
0%0%
0%23%
45%
68%
100%
100%
8$ 4,500,000
80%
LOC
% o
f Res
erve
0%0%
0%20%
40%
60%
100%
100%
7$ 3,000,000
70%
LOC
% o
f Res
erve
0%0%
0%18%
35%
53%
100%
100%
I M S R
6$ 1,920,000
60%
LOC
% o
f Res
erve
0%0%
0%15%
30%
45%
100%
100%
5$ 930,000
50%
LOC
% o
f Res
erve
0%0%
0%13%
25%
38%
100%
100%
R I S K
4$ 398,000
40%
LOC
% o
f Res
erve
0%0%
0%10%
20%
30%
100%
100%
3$ 160,000
30%
LOC
% o
f Res
erve
0%0%
0%0%
0%23%
100%
100%
2$ 44,000
0%LO
C %
of R
eser
ve0%
0%0%
0%0%
0%0%
0%
Ris
k pr
ofile
of i
ndiv
idua
l em
ploy
ers
base
d on
:•
Cla
ims
Ris
k –
Bas
ed o
n R
epor
ted
Res
erve
s (T
rust
and
Ver
ify)
•C
redi
t Ris
k –
Bas
ed o
n M
oody
’s E
xpec
ted
Def
ault
Freq
uenc
y (E
DF)
K1
$ ‐
0%LO
C %
of R
eser
ve0%
0%0%
0%0%
0%0%
0%
Hig
hlig
hted
are
as re
pres
ent p
rofil
es th
at e
xcee
d ris
k to
lera
nce
of S
I Sta
keho
lder
sM
inim
um L
OC
$50
,000
bel
ow th
at S
IEG
F as
sum
es ri
sk
7
26 of 58
Dis
trib
utio
n of
SI E
mpl
oyer
s’ R
eser
ves
and
LOC
byR
isk
and
LOC
by
Ris
kA
s vo
lunt
arily
rep
orte
d Ja
nuar
y 20
10 All em
ployers
High‐risk
employers
Low‐risk
employers
Tt
l609584951
333761477
275823473
Tota
l cas
e re
serv
es609,584,95
1 333,761,47
7 275,823,47
3
Targ
et L
OC
264,597,244
264,597,244
0
Tota
l cur
rent
LO
C267,487,030
174,877,913
92,609,118
***
# Em
ployers
1167
262
905
# Em
ployers with LO
C335
106
229***
*** Subject to refund
whe
n in com
pliance with
financial statemen
t rep
ortin
g and statem
ent o
f guaranty requ
irem
ents.
8
27 of 58
SI U
nder
writ
ing
Prac
tical
C
onsi
dera
tions
Con
side
ratio
nso
The
ris
k pr
ofile
grid
will
be
the
sign
ifica
nt d
river
for
Jan.
1, 2
011
setti
ng L
OC
req
uire
men
ts. H
owev
er, i
t is
not t
he
only
con
side
ratio
n th
at w
ill b
e ta
ken
into
acc
ount
.
Big
gest
chal
leng
em
akin
gs
rere
ser
esre
flect
tre
oB
igge
st c
halle
nge:
mak
ing
sure
res
erve
s re
flect
true
lia
bilit
y ex
posu
re.
oM
oody
’sex
pect
edde
faul
tfre
quen
cyra
ting
isa
oM
oody
s ex
pect
ed d
efau
lt fr
eque
ncy
ratin
g is
a
snap
shot
in ti
me;
tren
ds w
ill b
e ev
alua
ted
in fi
nanc
ial
unde
rwrit
ing
proc
ess.
oT
his
is n
ot a
sta
tic m
odel
, we
expe
ct to
mak
e ne
cess
ary
adju
stm
ents
to a
chie
ve d
esire
d re
sults
.
fo
Rev
iew
to b
e un
dert
aken
afte
r 20
11 r
enew
al c
ycle
.
9
28 of 58
SI F
inan
cial
Und
erw
ritin
g C
hang
esC
hang
esJa
n. 1
, 201
1
Old
oF
inan
cial
sta
tem
ents
sco
red
by A
ltman
’s Z
-sco
re
New
oF
inan
cial
sta
tem
ents
rat
ed b
y M
oody
’s A
naly
tics’
exp
ecte
d f
oLi
mite
d fin
anci
al a
naly
sis
by B
WC
’s S
I dep
artm
ent
oR
isk
mea
sure
men
t bas
ed
onpa
idcl
aim
s
defa
ult m
odel
so
Fin
anci
al u
nder
writ
ing
perf
orm
ed
by fi
nanc
e de
part
men
to
Ris
km
easu
rem
entb
ased
onon
pai
d cl
aim
so
No
min
imum
LO
Co
No
min
imum
LO
C in
crea
seLi
mite
dLO
Cre
fund
s
oR
isk
mea
sure
men
t bas
ed o
n re
serv
es a
nd p
aid
clai
ms
o$5
0,00
0 m
inim
um L
OC
o$5
000
0m
inim
umLO
Cin
crea
seo
Lim
ited
LOC
ref
unds
o
LOC
cal
cula
tion
base
d on
pai
d cl
aim
s
o$5
0,00
0 m
inim
um L
OC
incr
ease
oLO
C r
efun
ds fo
r lo
w-r
isk
empl
oyer
so
Res
erve
s or
pai
d cl
aim
s or
act
uaria
l stu
d yy
10
29 of 58
Impl
emen
tatio
n
oLO
C’s
rel
ease
d25
LOC
td
td
t•
25 L
OC
s re
turn
ed to
dat
e
•$9
,293
,369
tota
l ret
urne
d
oN
ew L
OC
s re
ques
ted
•P
endi
ng r
ecei
pt o
f 201
0 da
ta
11
30 of 58
LOC
s R
etur
ned
$650
000
$774
,000
$820
,000
$1,1
03,0
00$1
,147
,000
$358
,000
$400
,000
$403
,000
$425
,000
$566
,000$6
50,0
00
$250
,000
$253
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$258
,000
$297
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$312
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,000
$61
500
$99,
000
$100
,000
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,000$1
76,0
00$2
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00$2
50,0
00
$50,
000
$52,
000
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000
$61,
500
$0$2
00,0
00$4
00,0
00$6
00,0
00$8
00,0
00$1
,000
,000
$1,2
00,0
00$1
,400
,000
12
31 of 58
Upd
ates
/Nex
t Ste
pso
New
SI a
pplic
atio
ns: m
ust b
e in
vest
men
t gra
de
oC
omm
unic
atio
npl
ano
Com
mun
icat
ion
plan
•T
oday
/ong
oing
•V
ario
us O
SIA
and
SIG
O m
eetin
gs a
nd n
ewsl
ette
rs
•In
divi
dual
con
tact
acc
ordi
ng to
ren
ewal
cyc
le
•O
hiob
wc.
com
oS
ynch
roni
ze h
igh-
risk
asse
ssm
ents
with
the
mat
rix
oS
I/PE
O is
sues
/exp
osur
e
13
32 of 58
Credit researCh & risk MeasureMent
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COMPANY 90 DAY EDF HISTORY
Moody’s S&P EDF %
Moody’s Rating S&P Rating EDF
MOODY’S / S&P ASSET VOLATILITY MARKET LEVERAGE
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A1 / A+
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33 of 58
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– Utilize the extensive graphing capabilities of CreditEdge to produce portfolio distribution histograms and perform trend analysis on up to five years of company and industry EDF credit measures
»» Data»and»Engine»Access» – CreditEdge exports underlying portfolio data into Microsoft® Excel for further analysis. It also provides optional FTP delivery of
portfolio data, with the ability to cross-reference industry standard identifiers. In addition, it uses standard XML interfaces that allow the CreditEdge EDF calculation engine to be easily embedded in internal applications.
Integration with Moody’s KMV ProductsCreditEdge provides daily EDF credit measure updates to the CreditMark® valuation engine. CreditEdge also utilizes the XML service to integrate with RiskAnalyst™ and third party platforms.
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Credit risk MeasureMent soft ware
Credit Risk Challenge: Measuring Private Firm Credit RiskInstitutions are faced with an increasing demand to quantify private firm credit risk. This demand comes from shareholders seeking to maximize their return on risk and from regulators requiring adequate capital levels. Developing accurate and consistent default models for global private portfolios is a significant challenge due to data limitations and constraints on internal resources.
This graph shows the relative contribution of the financial ratios used to calculate the EDF credit measures for a privately held firm.
RiskCalc’s predictive analytics are based on Moody’s Credit Research Database (CRD™), the world’s largest and cleanest database of private firm financials and defaults. RiskCalc uses financial statement values to calculate ratios used to determine EDF credit measures.
Measure Private-Firm Credit Risk Accurately, Efficiently and ConsistentlyRiskCalc’s robust analytics and broad coverage has made it the private-firm model of choice among the world’s leading banks, corporations, and asset managers. It is considered worldwide as the preferred model for:
» Efficiently screening obligors at origination
» Early detection of credit deterioration
» Accurately and consistently pricing credit risk
» Monitoring and benchmarking exposures or investments
» Basel II compliance
RiskCalcTM
From mooDy’s KmV
RiskCalc is the premier private firm probability of default model. RiskCalc enables greater accuracy, consistency and efficiency than other commercially available models and internal bank models when estimating privately held firms. RiskCalc produces a forward-looking default probability (called expected default frequency, or EDFTM) by combining financial statement and equity market information into a highly predictive measurement of stand alone credit risk. RiskCalc consists of a global network of 25 models that cover approximately 80% of the world’s GDP.
Relative Contributions
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aMeriCas+1.212.553.1653
eMea+44.20.7772.5454
asia-PaCifiC+85.2.2916.1121
JaPan+81.3.5408.4100
We encourage you to try RiskCalc for yourself. Please contact Moody’s Analytics to learn more, arrange a trial or schedule a personal demonstration. E-mail us at [email protected] or use one of the numbers below:
Key RiskCalc Features: » Comprised of a network of country-specific models developed and tested on local private-firm data to capture local default risk factors
» Can be used either as a stand-alone probability of default(PD) model, an input to an internal PD model or as a benchmarking tool
» Can be easily accessed via the website, through XML or RiskAnalyst™, Moody’s Analytics’ dual rating credit scoring platform
» Produces EDF credit measures from one through five years
» Maps EDF credit measures to agency ratings
» Uses intuitive and commonly used financial ratios such as leverage, profitability, debt coverage, liquidity, etc.
» Adjusts for unique industry differences
» Captures the impact of credit cycle changes from month-to-month in the period between two financial statements
» Displays valuable ratio diagnostics and their individual contributions to risk
RiskCalc’s Unique Advantage: The World’s Largest and Cleanest Private Company Default Database The predictive power of RiskCalc is based on Moody’s CRD. Built in partnership with over 45 leading financial institutions around the world, the CRD contains 13 million financial statements on 2.5 million firms and over 200,000 private company defaults, yielding unique insight into private firm default probability.
RiskCalc’s Global Presence: Network of 25 World-Class ModelsThe RiskCalc network is comprised of unique models covering:Americas: USA, Canada and Mexico country models, plus U.S. Insurance, U.S. Banks and North America Large FirmEurope, Middle East and Africa: Austria, France, Netherlands, Nordic (Denmark, Norway, Sweden, Finland), Portugal, Spain, UK, Germany, Belgium, Italy, South Africa, Switzerland
Asia Pacific: Japan, Korea, Australia, Singapore
The Product FamilyMoody’s Analytics offers the following products that can be integrated with RiskCalc to form a comprehensive Enterprise Risk Management (ERM) Solution:
» LossCalc: Calculates forward-looking estimates of recovery or loss-given-default (LGD)
» RiskAnalyst: Platform for financial spreading, credit analysis, data storage, and internal ratings (PD and LGD)
» RiskFrontierTM: Portfolio management tool used to analyze credit risk across diverse asset classes and for economic capital assessment
» Fermat CAD: Provides the basis for regulatory capital assessment and helps banks comply with both Basel accords
About Moody’s AnalyticsMoody’s Analytics, a fast-growing subsidiary of Moody’s Corporation, is rapidly expanding its product offerings and global reach. In addition to distributing the credit ratings and proprietary research of Moody’s Investors Service, we offer training and consulting services as well as award-winning software that is tuned to your business challenges and powered by sophisticated models. We reach over 5,000 institutions around the globe, putting the best practices of the entire world of credit, economics and financial risk management at your fingertips, helping you compete in an evolving marketplace.
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Recent OSHA and NIOSH Activities 3/3/2011
OSHA Withdraws Proposed Interpretation on Occupational Noise OSHA announced that it is withdrawing its proposed interpretation titled "Interpretation of OSHA's Provisions for Feasible Administrative or Engineering Controls of Occupational Noise." The interpretation would have clarified the term "feasible administrative or engineering controls" as used in OSHA's noise standard. The proposed interpretation was published in the Federal Register on Oct. 19, 2010. "Hearing loss caused by excessive noise levels remains a serious occupational health problem in this country," said Dr. David Michaels, assistant secretary of labor for occupational safety and health. "However, it is clear from the concerns raised about this proposal that addressing this problem requires much more public outreach and many more resources than we had originally anticipated. We are sensitive to the possible costs associated with improving worker protection and have decided to suspend work on this proposed modification while we study other approaches to abating workplace noise hazards." NIOSH Releases Beryllium Alert NIOSH recently published an alert with recommendations for workers exposed to particles, fumes, mists or solutions from beryllium-containing materials. In “Preventing Sensitization and Disease from Beryllium Exposure,” NIOSH presents case studies, resources and suggestions for both employers and employees who work with beryllium-containing materials. The NIOSH recommendations provide guidance on how workers can avoid beryllium sensitization, chronic beryllium disease and lung cancer through different training methods, cleaning procedures and medical surveillance. The alert also describes actions necessary to identify workers exposed to beryllium who may not be aware that they have been exposed, improve protective measures for exposed workers, reduce and minimize general exposures and the number of exposed workers when possible, educate workers on the dangers of working with beryllium, ascertain the characteristics of exposures, and identify industrial and occupational sectors that use beryllium and target them for prevention efforts. ChemSW's White Paper on Best Practices for Managing Laboratory Chemical Inventory Companies that utilize chemicals in their labs and their manufacturing processes must manage those chemicals in a safe environment in accordance with government regulations. At a minimum, to ensure that this is accomplished, a system for managing information about the chemical safety and quality data should be established and maintained.
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Best practices take this minimum and leverage the management of the chemical inventory by leveraging the abilities of the people, processes, and technology involved to best effect. The white paper details how best practices chemical inventory solutions can optimize a high-performance, relational database system for tracking chemicals and other laboratory supplies. Further, a best practices chemical inventory system that works with other IT solutions enables labs to keep track of where chemicals are and how much are available, as well as generate reports and quickly access hazard information. Numerous illustrations supplement the text, as well as a self-diagnostic test that helps companies to determine the effectiveness of the current chemical inventory system. Below is a link to request the free white paper. http://www.chemsw.com/aih1102bpa.htm OSHA temporarily withdraws proposed column for work-related musculoskeletal disorders. OSHA announced that it has temporarily withdrawn from review by the Office of Management and Budget its proposal to restore a column for work-related musculoskeletal disorders on employer injury and illness logs. The agency has taken this action to seek greater input from small businesses on the impact of the proposal and will do so through outreach in partnership with the U.S. Small Business Administration's Office of Advocacy. "Work-related musculoskeletal disorders remain the leading cause of workplace injury and illness in this country, and this proposal is an effort to assist employers and OSHA in better identifying problems in workplaces," said Assistant Secretary of Labor for Occupational Safety and Health Dr. David Michaels. "However, it is clear that the proposal has raised concern among small businesses, so OSHA is facilitating an active dialogue between the agency and the small business community." NEP (National Emphasis Program)
1. Microwave Popcorn Processing Plants
OSHA issues enforcement guidance on personal protective equipment to protect general industry workers' safety, health OSHA issued the Enforcement Guidance for Personal Protective Equipment in General Industry*, a directive that provides enforcement personnel with instructions for determining whether employers have complied with OSHA personal protective equipment (PPE) standards. The directive was effective Feb. 10. OSHA issued a final rule on Employer Payment for Personal Protective Equipment in November 2007. The rule required employers in general industry, shipyard employment, longshoring, marine terminals and construction to provide most types of required PPE at no cost to the worker. The agency also issued a final rule in September 2009 updating its PPE standards so that they are more consistent with current consensus standards.
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This directive replaces Inspection Guidelines for 29 CFR 1910 Subpart I, the revised Personal Protective Equipment Standards for General Industry issued in June 1995. Changes in this directive include clarifying what type of PPE employers must provide at no cost to workers and when employers are required and not required to pay for PPE. The directive also provides guidance that allows employers to use PPE that complies with current consensus standards and updates PPE enforcement policies based on court and review commission decisions. These personal protective equipment standards require employers to provide – at no cost to workers – protective equipment, such as goggles and face shields that fit properly without restricting vision; earplugs and earmuffs when they will reduce noise to acceptable levels and are less costly than administrative and engineering controls; and respirators to protect workers from exposure to air contaminants. Additionally, the directive lists PPE and other items exempted from the employer payment requirements and includes questions and answers useful in clarifying PPE payment concerns. Visit OSHA's Safety and Health Topics page on Personal Protective Equipment for more information.
Contributed by OMA Connections Partner:
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43 of 58
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44 of 58
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$20,119
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Percent Change
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48 of 58
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Ind
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roll
78
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Claim Count
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49 of 58
Senate Bill 5 Omnibus Amendment Summary
1. Reinstates collective bargaining rights for state employees.
2. Removes the right to strike for all public employees and establishes penalties for participation in a strike. Violators are subject to removal, and shall have pay deducted at the rate of twice the daily rate of pay for each day of participation in a strike. The penalty for violating a court injunction against a strike is a fine up to $1,000, up to 30 days imprisonment, or both. In addition, an employee who willfully disobeys a court mandate may be fined for contempt in an amount left to the court’s discretion. Penalties and fines may not be waived as part of a settlement. At an unfair labor practice hearing related to illegal strike activity, the board shall order the suspension of payment of dues or fees to the employee organization for the greater of two days, or two times the duration of the illegal activity.
3. Establishes that all matters pertaining to wages, hours, and terms and conditions of employment are
subject to collective bargaining. Also establishes matters not appropriate for bargaining, such as health care benetfits, pension pick-ups, privitazation of services, workforce levels, and other provisions.
4. Establishes a procedure for dispute settlement for all public employees. If the parties are unable to reach
agreement, any party may request the State Employment Relations Board (SERB) to intervene. The board shall appoint a mediator. Any time after appointment of a mediator, either party may request appointment of a fact-finder. The fact-finder must consider factors listed in statute. Fact finding meetings may be open to the public at request of either party. The interests and welfare of the public and ability of employer to administer and finance the proposals must be a primary consideration. If the parties are unable to reach agreement within 14 days after publication of the findings and recommendations, or if the Collective Bargaining Agreement (CBA) has expired, the public employer shall submit the findings, the employer’s last best offer, and the employee organization’s last best offer to the legislative body of the public employer. The legislative body shall conduct a public hearing, as soon as practicable, at which the parties shall explain their positions. At the conclusion of the hearing, the legislative body must vote to accept either the last best offer of the employee organization or the last best offer of the public employer. The parties shall execute a CBA that represents the last best offer chosen by the legislative body and the agreement is effective for 3 years.
During negotiations between a public employer and exclusive representative, for purposes of determining inability of the public employer to pay for any terms agreed to, only the employer’s current financial status at the time period surrounding the negotiations – not any potential future increases in income that would only be possible by the employer obtaining funds from an outside source including passage of a levy or bond issue, ability to sell assets, raise revenue, or other revenue enhancements.
5. Clarifies public employer rights, including such issues as hiring, discharging and discipline of employees; work assignments and hours; qualifications of employees; employee rules and regulations.
6. Establishes bargaining timelines. Adjusts the timelines for certification and bargaining to ensure
reasonable deadlines. The amendment also requires SERB to investigate a request to certify instead of automatically certifying an employee organization. Nonexclusive recognition previously through an agreement or memorandum of understanding does not preclude SERB from determining an appropriate unit, removing a classification, or holding an election to determine an exclusive representative.
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7. Establishes bargaining guidelines related to fire departments. SERB shall not designate a unit that
includes rank and file members with members who rank lieutenant or above (similar to police departments under current law). A current bargaining unit that does not meet those requirements ceases to be an appropriate unit when their CBA expires, or three years after the bill’s effective date, whichever is earlier. Fire supervisory officers are not subject to collective bargaining.
8. Establishes public employee pay ranges. The amendment reinstates pay ranges, but not step values and
automatic increases, in current law. Employees are paid based upon merit within the ranges set in statute. Merit shall be the only basis for an employee’s progression through the schedule. Teachers are paid based upon merit and salaries may be bargained in a CBA. Teacher performance is measured by considering the level of license held by the teacher, whether the teacher is a “highly qualified teacher” as defined in statute, the value-added measure used to determine student performance, the results of performance evaluations, or any other system of evaluation or other criteria established by the board.
9. Establishes guidelines for employee vacation & sick leave. Caps vacation leave at 7.7 hours per biweekly
pay period after 19 years of service. Current law caps vacation leave at 9.2 hours per biweekly pay period after 24 years of service. Sick leave for employees in offices of the county, municipal, and civil service township service, and state colleges and universities is accrued at 10 days a year.
10. Clarifies that health care benefits apply equally to all employees.
11. Restores current law as it relates to the School Employees Healthcare Board.
12. Allows all new CBAs to be reopened under a fiscal emergency/watch.
13. Allows teachers to negotiate an initial contract of up to three years. Subsequent contracts are two to five
years.
14. Clarifies when faculty at public universities exercise managerial authority, making them management level employees not subject to bargaining.
15. Prohibits length of service from being the sole factor in determining order of layoff and requires
compliance with federal anti-discrimination statutes. For teachers, preference is given to teachers under continuing contracts then the school board considers the relative quality of performance (see factors considered in “public employee pay ranges,” above) as the principal factor in determining reductions.
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Bill Analysis
Legislative Service Commission
H.B. 123 129th General Assembly
(As introduced)
Rep. Hottinger
BILL SUMMARY
• Allows the Administrator of Workersʹ Compensation to waive any of the continuing law requirements that certain public employers must satisfy to be granted status as a self‐insuring employer.
• Allows the Administrator to charge additional security from a public employer for whom the Administrator waives any criteria to become a self‐insuring employer under the bill.
• Requires the Administrator or a self‐insuring employer to award payment for medical bills in a claim that is ultimately denied under specified circumstances and requires those payments to be charged to the Surplus Fund Account.
• Reduces the time period for the payment of bills for medical or vocational rehabilitation services from two years to one year from the date of service or the date the payment is otherwise permitted under continuing law.
• Prohibits a medical or vocational rehabilitation services provider from billing a claimant for any bill that the Administrator or Industrial Commission is prohibited from paying due to the provider failing to timely submit the bill.
• Removes the requirement that the Bureau of Workersʹ Compensation include in the annual actuarial valuation report specified information concerning financial information and methods used in making that valuation.
• Changes the requirements an individual must satisfy to become the member of the Bureau of Workersʹ Compensation Board of Directors who is an actuary.
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• Revises the membership of the Workersʹ Compensation Board of Directors Nominating Committee.
CONTENT AND OPERATION
Approval of self-insuring status for public employers
(R.C. 4123.35(B)(2))
The bill allows the Administrator of Workersʹ Compensation to waive any of the continuing law requirements that public employers who are not the state, certain boards of county commissioners, a board of a county hospital, or a publicly owned utility must satisfy to be granted status as a self‐insuring employer. A self‐insuring employer pays compensation and benefits under the Workersʹ Compensation Law directly to a claimant. Currently, the Administrator must deny a public employer that status if the public employer cannot satisfy all of the following requirements:
(1) For the two‐year period preceding application, the public employer has maintained an unvoted debt capacity equal to at least two times the amount of the current annual workersʹ compensation premium established by the Administrator for the year immediately preceding the year in which the public employer makes the application.
(2) For each of the two fiscal years preceding the application, the unreserved and undesignated year‐end fund balance in the public employerʹs general fund is equal to at least 5% of the public employerʹs general fund revenues for the fiscal year computed in accordance with generally accepted accounting principles.
(3) For the five‐year period preceding the application, the public employer, to the extent applicable, has complied fully with the continuing disclosure requirements established in rules adopted by the U.S. Securities and Exchange Commission.
(4) For the five‐year period preceding the application, the public employer has not had its Local Government Fund distribution withheld on account of the public employer being indebted or otherwise obligated to the state.
(5) For the five‐year period preceding the application, the public employer has not been under a fiscal watch or fiscal emergency pursuant to the
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Local Fiscal Emergencies Law.
(6) For the public employerʹs fiscal year preceding the application, the public employer has obtained an annual financial audit as required under continuing law, that has been released by the Auditor of State within seven months after the end of the public employerʹs fiscal year.
(7) On the date of application, the public employer holds a debt rating of Aa3 or higher according to Moody’s Investors Service, Inc., or a comparable rating by similar independent rating agency.
(8) The public employer agrees to generate an annual accumulating book reserve in its financial statements reflecting an actuarially generated reserve adequate to pay projected workersʹ compensation claims for the applicable period of time, as determined by the Administrator.
(9) For a public employer that is a hospital, the public employer must submit audited financial statements showing the hospitalʹs overall liquidity characteristics, and the Administrator must determine, on an individual basis, whether the public employer satisfies liquidity standards equivalent to the liquidity standards of other public employers.
(10) Any additional criteria that the Administrator adopts in rules.
The bill permits the Administrator to adopt rules establishing the criteria that a public employer must satisfy to qualify for a waiver. Additionally, the bill allows the rules to require additional security from that public employer pursuant to continuing law requirements, which is similar to continuing law in which the Administrator may charge additional security if the Administrator waives certain requirements applicable to the private sector.
Payment of medical and related benefits
(R.C. 4123.512(H) and 4123.52)
For workersʹ compensation claims arising after the billʹs effective date, under the bill, regardless of whether a final determination that payments of benefits made to or on behalf of a claimant should not have been made, the bill requires the Administrator or a self‐insuring employer to award payment of medical or vocational rehabilitation services submitted for payment after the date of the final determination if all of the following apply:
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• The services were approved and were rendered by the provider in good faith prior to the date of the final determination;
• The services were payable under continuing law prior to the date of the final determination;
• The request for payment is submitted within the time limit established by the bill as described below.
The bill requires these payments to be charged to the Surplus Fund Account of the State Insurance Fund. If the employer of the employee who is the subject of this claim is a state fund employer, the bill prohibits these payments from being charged to the employerʹs experience (which is used to determine the employerʹs premium). If that employer is a self‐insuring employer, the bill requires the self‐insuring employer to deduct the amount from the paid compensation the self‐insuring employer reports to the Administrator under continuing law. Paid compensation generally consists of payments made to claimants by the self‐insuring employer under the Workersʹ Compensation Law and is used to determine the amount of a self‐insuring employerʹs assessments due under that law.
Additionally, the bill prohibits the Administrator or the Industrial Commission from making any finding or awarding for payment of medical or vocational rehabilitation services submitted for payment more than one year after the date the services were rendered or more than one year after the date the services became payable under continuing law (the date of the issuance of the staff hearing officerʹs order or the date of the final administrative or judicial determination), whichever is later. Thus, the bill reduces the time period for the payment of bills for medical or vocational rehabilitation services from two years to one year from the date of service or the date the payment is otherwise permitted under continuing law.
The bill prohibits a medical or vocational rehabilitation services provider from billing a claimant for any bill that the Administrator or Industrial Commission is prohibited from paying due to the provider failing to timely submit the bill.
Payment of compensation and benefits resulting from vocational rehabilitation
(R.C. 4121.68)
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The bill eliminates the requirement that the Bureau of Workersʹ Compensation (BWC) be considered the employer of a claimant who sustains an injury or occupational disease or dies in the course of and arising out of the claimantʹs participation in a vocational rehabilitation program. Under continuing law, compensation and benefits paid to such a claimant are charged to the Surplus Fund Account and not charged through the State Insurance Fund to the employer against which the claim was allowed. The bill limits the current law ability to have these compensation and benefits be charged to the Surplus Fund Account to only those employers who pay assessments into the Account for that payment, which is consistent with current practice with respect to state agencies.
Annual actuarial valuation report
(R.C. 4121.125)
Continuing law requires the BWC Board of Directors (Board) to contract to have prepared annually by or under the supervision of an actuary a report that meets specified requirements and that consists of an actuarial valuation of the assets, liabilities, and funding requirements of the State Insurance Fund and all other funds specified in the Workersʹ Compensation Law. The bill removes the following from the information required to be included in the report:
• A summary of the census data and financial information used in the valuation;
• A description of the asset valuation method used in the valuation;
• A summary of findings that includes a statement of the actuarial accrued compensation and benefit liabilities and unfunded actuarial accrued compensation and benefit liabilities.
The report must continue to contain all of the following information:
• A summary of the compensation and benefit provisions evaluated;
• A description of the actuarial assumptions and actuarial cost method used in the valuation;
• A schedule showing the effect of any changes in the compensation and benefit provisions, actuarial assumptions, or cost methods since the previous annual actuarial valuation report was submitted
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to the Board.
Health Partnership Program
(R.C. 4121.44 and 4121.99 (repealed))
The bill reduces the biannual reporting requirement for the Health Care Data Program to once annually and requires the report to be submitted to the President of the Senate, the Speaker of the House of Representatives, the Governor, and the Workersʹ Compensation Council along with the Boardʹs annual report. Currently, this report is submitted to the President of the Senate, Speaker of the House of Representatives, and the Governor each January 1 and July 1. Under continuing law the report contains compiled data on the measures of outcomes and savings of the Health Partnership Program. The bill also makes technical changes with respect to the Health Partnership Program.
Bureau of Workers' Compensation Board of Directors
(R.C. 4121.12)
The bill requires the member of the Board who must be an actuary to be (1) an associate or fellow with the Casualty Actuarial Society, rather than an associate or fellow with the Society of Actuaries as under current law, or (2) a member in good standing with the American Academy of Actuaries, as under continuing law.
Workers' Compensation Board of Directors Nominating Committee
(R.C. 4121.123)
The bill changes the membership of the Workersʹ Compensation Board of Directors Nominating Committee in two ways. First, the bill removes the president of the Ohio Municipal League from the Committee. Second, the bill requires the chief executive officer or the equivalent of the chief executive officer of the National Federation of Independent Businesses and the Ohio Farm Bureau each to serve on the Committee, rather than requiring the two groups to jointly select a representative under current law.
Under continuing law, the Committee reviews and evaluates possible appointees for the Board and makes recommendations to the Governor for the appointment of members to the Board. The Committee must meet at the request of the Governor or as the Committee determines appropriate in order to make
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recommendations to the Governor for the appointment of members of the Board.
Division of Research and Statistics
(R.C. 4121.124 (repealed), 4121.32, and 4121.41)
The bill abolishes the BWC Division of Research and Statistics, which is currently not staffed by BWC. The Workersʹ Compensation Law requires the Division to be headed by a superintendent, who is in the unclassified civil service. In abolishing the Division, the bill transfers the following duties from the Division to BWC:
• Performance of cost‐effectiveness analyses of regarding the procedure for the assignment and transfer of claims that are available to the General Assembly, the Governor, and to the public during normal working hours;
• Compile statistics on the subjects of complaints regarding BWC.
Additionally, the bill eliminates the following duties of the Division:
• The duty to prepare and publish statistical summaries pertaining to the operation of BWC and the Industrial Commission;
• The duty to prepare and transmit to the appropriate committees of the General Assembly, upon request, cost estimates for any legislation under consideration that has an impact upon the workersʹ compensation system or the operation of the agencies involved in the administration of the system.
HISTORY
ACTION DATE Introduced 02-24-11 h0123‐i‐129.docx/ks
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