Experience rating is an incentive system to promote safe working conditions. Employers who become experience rated can be credit rated or penalty rated, depending on the claims cost record of their particular business.
How does BWC determine if an employer should be experience rated?
BWC receives payroll information from the employer by manual classification annually. Using the payroll reported, BWC applies a manual classification expected loss rate to determine the employers expected losses.
If the employer's expected losses reaches $2,000 or more, then that employer automatically enters into the experience-rating plan.
Within experience rating, an employer with a better-than-average loss experience, compared to others in the same classification, will pay a rate lower than the base rate. The maximum credit in policy year 2017 for private employers is 53 percent while for public employers it's 65 percent.
An employer with a higher-than-expected loss experience, compared to others in the same classification, will pay a rate higher than the base rate. There is no limit on the maximum rate.
Approximately 30 percent of Ohio's employers are experience-rated.