GOVERNOR SIGNS BILL TO PROTECT BUSINESSES WITH EMPLOYEES
WHO WORK IN OTHER STATES
Did you know some states do not recognize Ohio’s workers’
compensation insurance coverage? Many Ohio business owners have no idea that
they are at risk for compliance audits and fines when their employees travel to
other states for business.
As of June 16, 2014, this issue is on its way to no longer
being a problem. Gov. John Kasich signed House Bill 493 into law, which offers
an insurance coverage solution for all Ohio employers whose employees cross
state lines.
H.B. 493 permits the Ohio
Bureau of Workers’ Compensation (BWC) to enter into an agreement with an
insurer to provide limited other-states’ workers’ comp coverage for Ohio
employees who are temporarily working in another state. With this arrangement
in place, Ohio businesses will no longer have to fear the repercussions of
aggressive states like Pennsylvania and Kentucky that do not accept Ohio’s
workers’ comp because they require local workers’ comp coverage for all work
performed in-state, regardless of whether coverage exists in Ohio.
While local workers’ comp
coverage can be obtained in these states, it is not necessarily cost-effective.
In addition, obtaining blanket cost-effective out-of-state workers’ comp
coverage has been a challenge in the current marketplace where such a product
is hard to find. With H.B. 493, this will soon be an issue of the past, as BWC
works to create the opportunity to provide guaranteed issue workers’ comp
coverage to resolve the problems many Ohio businesses have faced due to other
states workers’ comp requirements.
How did this issue surface?
Independent insurance agents throughout Ohio found their trucking, contracting, plumbing and other clients were being hit with audits, fines, taxes and other compliance enforcement actions from border states because Ohio’s workers’ comp insurance was not compliant with the insurance requirements of other states. These compliance issues were putting Ohio businesses at a competitive disadvantage.
Independent insurance agents throughout Ohio found their trucking, contracting, plumbing and other clients were being hit with audits, fines, taxes and other compliance enforcement actions from border states because Ohio’s workers’ comp insurance was not compliant with the insurance requirements of other states. These compliance issues were putting Ohio businesses at a competitive disadvantage.
The Professional Independent Agents Association of Ohio, of
which your agent is a member, created a task force of independent insurance
agents who serve a variety of businesses. These agents worked with the Ohio BWC and representatives from
other industries, like trucking and contracting, to develop a solution to this
problem.
What’s Next?
Now that the bill has been signed into law, BWC will begin the competitive bid process to identify an insurance carrier(s) to provide limited other states’ coverage for Ohio employers who need it.
While this process will take some time, the outcome will
ensure that Ohio businesses will finally have guaranteed access to a workers’
comp insurance product that provides the type of out-of-state coverage that
will protect their business and meet their needs. Furthermore, employers and
insurance agents will no longer have the burden of trying to determine all the
different workers comp requirements of each and every state where work is
performed, since there will be access to a workers’ comp product that is
accepted in all states.
