Employers that miss a workers’ compensation premium payment may apply for a one-time waiver of penalties under Gov. John Kasich’s “Common Sense Initiative.”
Under state law, if an employer misses a premium payment, it’s liable for late payments, interest and claim costs on claims that occur during the lapse.
Previously, employers could only avoid penalties by demonstrating “good cause” for the Bureau of Workers’ Compensation to grant retroactive coverage. Common situations such as clerical errors or short-term cash flow problems did not qualify as good cause.
But under Kasich’s new initiative, employers may have all penalties associated with a lapse in coverage waived once during the lifetime of the business. Employers seeking the waiver must submit a written request specifically asking for a one-time forgiveness of the lapse and associated penalties.
The lapse must have occurred after Jan. 10, 2011, and not exceeded 59 days. Employers with multiple lapses may seek only one waiver for the lapse of the employer’s choice. The request must specifically state that the employer is requesting a penalty abatement.
Note: Employers with multiple lapses should determine the penalties for each lapse and seek forgiveness for the largest one. The longest lapse may not necessarily be the most costly because claims costs are added if an employee filed a claim during the lapse.
Also remember that this is a one-time offer for the life of the business, not an annual option.