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Small Businesses Protesting BWC Overpayments

 
Posted Thursday, June 12th 2014 @ 3pm  by Matt Bruning

COLUMBUS, Ohio (WSPD) -- A class-action lawsuit representing 270,000 Ohio businesses says the Ohio Bureau of Workers' Compensation owes them more than $860 million in over-payments.

The businesses say the premiums were rigged through group rating plans. Both the Cuyahoga County Court of Common Pleas and the 8th District Court of Appeals have ordered the BWC to repay the money.

"They monies were collected over an 8 year period and they were illegal because they were premium charges for workers' compensation insurance which were grossly inflated," said Patrick Perotti, one of the attorneys handling the case.

During a Thursday morning news conference, several small business owners told their stories about premiums jumping and forcing them out of business or to make cuts or take out loans to stay afloat.

"We need that money to grow and instead of having money to compound growth we're suffering compounded penalties by having to pay interest on it," said Chris Arens who owns Bunk and Loft, a furniture company in Columbus.

Arens says he overpaid by $40,000, but had to get onto a payment plan which has cost him about $60,000 in interest.

Ron Foreman, who runs a commercial carpet company, says after some small claims his premiums jumped from $10,000 per year to $100,000 per year. It was a cost he couldn't afford.

"I ended up having to file personal bankruptcy. My line of credit became my mortgage on my home that I have now. It's been a tough, tough road," he said.

Perotti says the BWC needs to drop any appeals and comply with the court orders. He says the BWC has about $9 billion sitting in a fund with their money already set aside.

"So they can pay this back without blinking an eye," he said.

Melissa Vince, spokesperson for the BWC, says the businesses in question paid higher premiums because they represented a higher risk and higher cost to the system.

 

"It is a principal of insurance that when you bring greater risk your costs could be higher," she said.

 

She adds the surplus is the result of great investment and lower than anticipated medical costs. Vince also pointed out that the agency recently refunded $1 billion to Ohio businesses.

 

No decision has been made on whether or not to appeal the case to the Ohio Supreme Court. That decision will have to be made by the end of the month.

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