The Ohio BWC mailed the Notice of Estimated Annual Premium and Premium Installment Schedule for the 2020-2021 Policy Year. This notice was sent to all active policies during the last week of April.
The Ohio BWC – because of the potential impact of the COVID-19 Pandemic – reduced every policy’s estimated payroll by 20%. This is NOT a premium reduction. If your payroll was/is unchanged, you will be responsible for the premium balance during next summer’s True-up period.
For example, a policy within the construction industry was sent their 2020-2021 projected premium notice for $4,700. This premium is based on a payroll of $218,000 (payroll x blended rate = premium).
Typically, their payroll is $275,000 per year. The BWC assumed that they have had reduced operations (payroll) because of the COVID-19 Pandemic.
This policy did NOT reduce operations and their payroll is projected to be unchanged.
At the True-up, they will report payroll of $275,000. This will create a balance owed of $1,180. To avoid having a balance at the True-up, they elected to change their estimated payroll and eliminate the 20% reduction. Their monthly installments will be higher than the notice, but they will avoid a large true-up payment at the conclusion of the policy year.
The payroll and premium difference in the above example does not take into account any additional payroll increases, this is simply illustrates how BWC’s 20% payroll reduction can and will effect each policy.
Please be sure to review your Notice of Estimated Annual Premium, and let us know if you believe your payroll will be significantly different than the BWC’s estimate. We are happy to assist you in getting the necessary updates made with BWC.