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State Fund Employers Now Get What The Governor Ordered

Tuesday, September 18, 2012

On January 10, 2011 Governor John R. Kasich issued Executive Order 2011-01K. The purpose of the order was to establish a Common Sense Initiative to independently evaluate the economic impact of agency rules on small businesses. It specifically addressed that “wherever possible, penalties should be waived for first-time violators, especially for administrative matters such as filing and reporting deadlines.”

Under this Common Sense Initiative an employer with a lapse in coverage could apply for a one time reinstatement, no matter what the reason for the lapse. Historically, the Ohio BWC had refused to apply the plain text of the Executive Order and instead ruled upon whether the employer can demonstrate “good cause” shown for the lapse.

For those of you that remember, Butler County, Ohio was one of the first high profile employers to suffer a lapse due to failure to remit their premium payment on time. This late payment resulted in a lapse of coverage. Interestingly enough, this lapse however, was forgiven by the BWC under Kasich’s Executive Order.

Finally, after much dispute and discussion the BWC is now applying the plain meaning of the Executive Order and will forgive a one time lapse for any reason. Since it can only be used a single time, it will be important to evaluate if you want to use this for any specific lapse. Factors to consider would be the cost of the claim, the potential liability imposed by the failure to have coverage on the date of the injury and the likelihood of a repeat lapse.

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