Understanding Ohio’s State-Funded Workers’ Compensation Insurance System

The Definitive 2026 Employer Guide

Table of Contents

Why Ohio Is “Monopolistic” & What That Means for Employers
Who Must Carry Coverage in Ohio?
How Premiums Are Calculated
Recent Rate Cuts & 2026 Premium Outlook
Savings Programs: Group Rating, Group-Retro & Grow Ohio
Key Players: BWC, MCOs & Third-Party Administrators (TPAs)
Step-by-Step: Registering & Maintaining Your Policy
Claims Process: From Injury Report to Return-to-Work
Compliance & Penalties for Non-Coverage
Cost-Containment Best Practices
Ohio vs. Other States—How Do Rates Compare?
Frequently Asked Questions

Why Ohio Is “Monopolistic” & What That Means for Employers

Ohio is one of only four “monopolistic” states—along with North Dakota, Washington and Wyoming—where employers must purchase workers’ compensation insurance directly from a state fund. In Ohio, that fund is administered by the Ohio Bureau of Workers’ Compensation (BWC). No private carrier can sell a standard workers’ compensation policy for Ohio payroll, although businesses may self-insure if they meet stringent financial criteria.

Key implications for employers

One filing jurisdiction, one set of rules, one billing calendar.
Premiums are paid to the BWC, typically two installments per policy year (due Jan. 31 & June 30 for private employers).
Experience modifiers, discounts and surcharges are calculated only by the BWC.
Multi-state employers must carve out Ohio payroll from any multi-state policies and report it to the BWC separately.

For guidance on juggling multiple jurisdictions, see our companion guide: Multi-State Employers: How to Navigate Conflicting Workers' Compensation Insurance Laws.

Who Must Carry Coverage in Ohio?

Ohio Revised Code 4123.01 requires every employer with one or more employees—full-time, part-time or seasonal—to secure coverage, including:

Corporations with officers on payroll
LLCs with employees (members may elect coverage)
Construction contractors who hire subcontractors without their own BWC policy
Agricultural operations with >1,000 hours of labor in any quarter

Exemptions

Sole proprietors, partners and LLC members may elect to cover themselves.
Domestic servants in private homes are generally exempt.

How Premiums Are Calculated

Ohio uses a three-part formula:

Component	How It’s Determined	2026 Benchmark
Base rate	Industry class code × statewide loss cost	$0.68 per $100 payroll (statewide average) (ohiomfg.com)
Experience modifier (EMR)	Claims performance vs. peers (3-year window)	0.32–1.50 typical range
Assessments & fees	Administrative Cost Program (ACP), DWRF, etc.	≈ 14 % of pure premium

Premium = (Payroll ÷ 100) × Base rate × EMR + Assessments

Example: A manufacturing firm with $2 million Ohio payroll, EMR = 0.85
Premium = ($2 M / 100) × $0.68 × 0.85 ≈ $11,560 before assessments.

Recent Rate Cuts & 2026 Premium Outlook

Ohio continues to slash rates:

July 1 2025: 6 % average cut for private employers—projected $60 million in savings statewide (workcompwire.com)
Jan 1 2026: 1 % cut for public employers—≈ $1.8 million saved (workcompwire.com)

Thanks to consecutive reductions, Ohio’s premium index fell from $0.83 in 2022 to $0.68 in 2024 and is projected to hover near $0.65 in 2026, keeping the state among the five lowest-cost jurisdictions nationally (ohiomfg.com).

Savings Programs: Group Rating, Group-Retro & Grow Ohio

Even with low base rates, savvy employers leverage BWC incentive programs:

Program	Potential Discount / Refund	Who Qualifies	Key Deadline
Group Experience Rating	Up to 53 % premium discount (bwc.ohio.gov)	Most private employers with 2+ years experience	Last business day of May prior to a July 1 policy year
Group Retrospective Rating	Retrospective refunds up to 62 % of paid premium	Employers with strong safety culture	Late January each year
Grow Ohio	New businesses choose either automatic 25 % discount or immediate entry into group rating (bwc.ohio.gov)	Entities that first obtain withholding account & BWC policy within prior 12 months	30 days from obtaining coverage

Sedgwick example: The state’s largest TPA reports $160 million in annual client savings and $4 billion saved over the last decade through group programs (ohiocpa.com).

Key Players: BWC, MCOs & Third-Party Administrators (TPAs)

1. Bureau of Workers’ Compensation (BWC)

Issues policies, sets rates, adjudicates claims.
Operates 10 regional customer care centers.

2. Managed Care Organizations (MCOs)

Medical-only; they coordinate treatment, RTW and bill review.
Employers choose an MCO every two years during the open-enrollment window.

3. TPAs (Sedgwick, CareWorks Comp, CompManagement)

Handle risk consulting, claims advocacy, program enrollment.
Typical annual fee: $400–$1,200 flat, or ~ 0.15 % of covered payroll for large accounts (market survey).
Provide free feasibility projections before enrollment.

Pro-Tip: Compare at least two TPAs; Sedgwick touts an 11:1 ROI—every $1 in fees yields $11 in premium savings (cbao.bank).

Step-by-Step: Registering & Maintaining Your Policy

Create OH|ID and log into the BWC eBusiness portal.
Complete U-3 Application → Pay $120 minimum deposit.
Receive Policy & Risk Classifications within 10 business days.
Report Payroll & Pay Premiums (Jan 31 / Jun 30).
Elect Savings Programs (Group, Grow Ohio, ISSP).
Complete Two-Hour Safety Training if claims exceed $15k.
Submit True-Up Report each August.

Claims Process: From Injury Report to Return-to-Work

Injury occurs → provide First Report of Injury (FROI) within 24 hours.
MCO contacts employee & assigns nurse case manager.
BWC claim number issued (goal: 72 hours).
Initial compensation decision within 28 days.
TPA coordinates light duty & wage differential if applicable.
EMR impact appears two policy years later.

Compliance & Penalties for Non-Coverage

Failing to secure or maintain coverage designates you a “non-complying employer.” Penalties include:

Retroactive premium assessment for entire uncovered period.
Additional penalty up to 10× the missing premium for intentional misclassification (codes.ohio.gov).
Civil action by injured workers with no statutory cap on damages.
Personal liability for corporate officers.

Cost-Containment Best Practices

Safety councils & grants: Earn 3 % rebate for attending 10 meetings.
Drug-Free Safety Program: 4–7 % premium credit.
Dedicated RTW coordinator: cut indemnity days by 30 %.
Annual EMR audit—errors can inflate premiums 15 %.

For more aggressive strategies, review Penalties for Non-Compliance with Workers' Compensation Insurance in Illinois—the concepts apply when crafting a risk-management roadmap.

Ohio vs. Other States—How Do Rates Compare?

State	System Type	2024 Avg. Rate per $100 Payroll	Rank (Low → High)
Ohio	State fund	$0.65	5th (kickstandinsurance.com)
California	Competitive	$1.34	46th
Texas	Opt-out option	$0.41	2nd
New York	Competitive	$1.15	42nd
Washington	State fund	$1.21	44th

Interested in how these figures translate in practice? See our deep-dive: California Workers' Compensation Insurance Requirements: 2024 Employer Guide and Texas Nonsubscription Explained: Do You Really Need Workers' Compensation Insurance?.

Frequently Asked Questions

Q1. Can I buy a private workers’ comp policy for my Ohio employees?
No. Only the BWC or self-insurance is permitted.

Q2. How soon must I report payroll changes?
Update on the semi-annual payroll report; mid-year changes > $5 million require immediate notice.

Q3. If I hire remote employees who live in Ohio, do I need an Ohio policy?
Yes—location of work controls, not company headquarters.

Q4. What happens if I miss the August true-up?
Your policy lapses, discounts are removed, and a $50 late fee applies.

Key Takeaways for 2026

Ohio remains a top-five cheapest state for workers’ comp.
A 6 % rate cut (private) and 1 % cut (public) are already baked into 2026 premiums.
Layering Group Rating, Grow Ohio or Group-Retro can slash costs by another 25–53 %.
Non-coverage penalties are severe—up to 10× back premium.
Partnering with an experienced TPA & MCO is the fastest path to compliance and savings.

Need one-on-one guidance? Connect with an Ohio-licensed TPA before the next enrollment deadline, compare ROI, and lock your discounts for the July 1 policy year. Staying proactive is the best insurance against skyrocketing costs.

(Updated February 2, 2026. All monetary figures USD.)