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| Experience Exhibit | An employer’s experience is a statistical snapshot of claims costs for the oldest four of the most recent five-year period. - Each August, BWC mails an experience exhibit to experience-rated, state-fund employers. An experience-rated employer is an employer who is expected to have $8000 or more in losses.
- The experience exhibit shows all lost-time claims within the experience period, including compensation awards, medical payments and claim reserves.
- All medical-only claim expenditures are grouped by injury year. Reserves are not set for medical only claims.
- The exhibit also lists the base rates for each manual classification and shows any experience modification, the percentage that is applied to the base rate used to determine premium.
- The experience modification is applied as the result of a credit for an employer with a better than average loss experience (credit rating) or a penalty for an employer with a poor loss experience (penalty rating).
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| Experience Rating | Experience rating is an incentive system to promote safe working conditions. Employers who become experience rated can be credit-rated or penalty-rated, depending on the claims cost record of their particular business.
How does BWC determine if an employer should be experience rated? - BWC reviews payroll information received from every employer.
- Associated to every manual classification rate is an expected loss rate.
- If an employer’s payroll and manual classification rates are such that the expected loss reaches $8000 or more, then that employer automatically becomes experience rated.
An employer with a better-than-average loss experience, compared to others in the same classification, will receive a credit and pay a rate lower than the base rate. The maximum credit is 95 percent.
An employer with a bad loss experience, compared to others in the same classification, will be penalized and pay a rate higher than the base rate. There is no limit on the maximum penalty.
Smaller employers are excluded from experience rating for their own benefit. One serious accident could cause a smaller employer’s rates to increase severely, and the employer’s premium stability could be dramatically altered for the next four experience-rating years.
Approximately 20 percent of Ohio’s employers are experience-rated. |
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Glossary V2.0 |
