Subrogation is how BWC or a self-insuring (SI) employer collects medical and compensation costs paid on behalf of an injured worker when a third party causes the workers' compensation injury. In most circumstances for subrogation to occur, the injured worker must collect a judgment or settlement from the at-fault party or defendant.
Ohio law gives a right of subrogation to BWC, self-insuring employers and certain employers who contract for the direct payment of medical services pursuant to section 4121.44 (P) of the Ohio Revised Code (ORC).
Subrogation allows BWC or a self-insuring employer the right to collect workers’ compensation claim costs from the injury-causing person or entity. Recoverable costs may include all past, present and estimated future payments of compensation, medical benefits, rehabilitation costs or death benefits paid to or on behalf of the claimant.
What types of claims can be subrogated?
The most common injury is a motor vehicle accident that another driver causes. There are many other situations in which subrogation can apply, and these include, but are not limited to:
- Premises liability (such as a slip and fall that is not on company property).
- Product liability (such as a machine malfunction).
- Medical malpractice.
- Construction site accidents (caused by a third party).
- Dog bites or animal attacks.
Our claims service specialists (CSSs), who initially review a claim, make most referrals. However, employers, managed care organizations, employer representatives, attorneys and insurance companies also can make referrals. The BWC Sub-Referral Form is available for printing and submission to BWC.
The CSS or other interested party submits the completed form to our subrogation unit.
- Fax: 614-621-2549
- Mail: BWC Subrogation Department, P.O. Box 15487, Columbus, Ohio 43215
A valid referral should contain the following information:
- Claimant name and date of injury.
- Worker's compensation claim number.
- Third party and insurance carrier (with claim or policy number, if known).
- Attorney representing claimant.
Subrogation claim overview
An account examiner or attorney in our subrogation unit reviews the referral for completeness and identity of all involved parties. He or she will mail a letter asserting the claim to those parties and their insurance companies.
We normally receive notification once the injured worker settles the third-party claim. The subrogation unit then negotiates the settlement of the BWC lien with the injured worker or representative and the insurance company.
Often, the third party's settlement offer is less than BWC's lien amount. All parties consider the offer when negotiating the final amount. Insurance policy limits can reduce the offer amount. Additionally, most offers must be shared among the injured worker and BWC. Attorneys' fees and costs further reduce any settlement.
A statute, 4123.931, governs how we calculate the recovery and typically allows us to collect only a percentage of its full lien. Most claims are resolved at this point. The subrogation unit will get a settlement release signed by the injured worker and receive a check representing our settlement amount.
Unsuccessfully resolved claims can be referred for non-binding arbitration to the administrator's designee. We refer claims not successfully arbitrated to the Ohio Attorney General’s (AG's) Office. Generally, when the AG's Office receives a claim, fees and costs increase. The AG subtracts these fees from the amount of our ultimate recovery.
We credit the amount we collect through subrogation to the employer's claim at the time of recovery. This usually reduces the amount of the claim costs. The subrogation collection may reduce the employer's premium. However, the employer's premium may remain the same because we consider many factors and other claims when calculating premium. Our right of recovery is tied to the injured worker's third-party claim. It may take two years or longer to collect.