Ohio presently ranks as the fifth largest worker’s compensation insurer when compared to every worker’s compensation insurer (private and public) throughout the nation. Ohio is the largest state fund, representing approximately $2.1 billion in liquid assets. This $2.1 billion fund represents a substantial financial and political issue within the State of Ohio.
The fund is managed by the Ohio Bureau of Workers Compensation (BWC) board of directors, providing greater accountability and transparency to citizens, employers and employees throughout the State of Ohio. Prior to the establishment of this board of directors there were substantial recent scandals associated with the management and investment of these funds.
This board of directors was implemented to prevent the recurrence of investment and management scandals associated with this fund in the past. Since its inception, this group of managers has performed their responsibilities with excellence by all financial measures. The board follows an extensive set of internally developed guidelines, outperforming most major external economic standards and measures. This system has a proven track record of excellence, and provides a valuable oversight and management service to the citizens, employees and employers throughout Ohio.
If Ohio implements privatization options currently under consideration (and based upon the pattern and experience of other states who have done so), this fund would become a fund of last resort for bad safety risks – subsidizing those employers whose safety record and resulting uninsurability make it impossible for them to qualify for private insurance options. The fund, in all likelihood, would be quickly depleted.
When the present State run monopolistic system was implemented then Governor Harmon proudly proclaimed “this is the end of private profit from the miseries of those who are killed or injured in industry.” This statement echoes profoundly today as we begin to evaluate privatization options. Private insurance companies must generate a profit. This must come at the expense of Ohio’s employers, their employees and Ohio’s economy. We have not begun to discuss this sensitive yet poignant central issue clouded within the privatization debate. Yet it speaks to the heart of the political and financial considerations privatization brings to the table.