The economic impact of the coronavirus pandemic has been devastating to businesses across multiple industries. In response to Ohio Governor Mike DeWine’s order that Ohio agencies do everything in their power to mitigate the impact on Ohio residents, the Ohio Bureau of Workers Compensation (BWC) will issue $1.3 billion dollars in dividend payments to employers. This is the second round of dividend payments issued by the agency in 2020.
Dividend Calculation & Eligibility Requirements
A statement on the BWC website defines the private employer dividend as 100% of the billed premium for the policy period being July 1, 2019, through June 30, 2020, for private employers and January 1, 2019, through December 31, 2019, for public employers. There are eligibility requirements that must be met to qualify for the dividend payments.
Eligibility requirements are:
- State Insurance Fund employers (private employers or public employer taxing districts only).
- The employer must have reported payroll greater than zero for the applicable policy period.
- The employer must have been billed premium for the applicable policy period.
- Employers must have completed their payroll true-up for the policy year 2019 as of Oct. 2, 2020.
- The employer must be in an active, reinstated, combined, canceled – business sold, or debtor-in-possession status or, in a lapsed status with a lapse date of Jan. 1, 2020 or later as of Oct. 2, 2020.
Employers with an outstanding balance on their account can expect to have their dividend payment reduced by the amount of the outstanding balance – and if the outstanding balance exceeds the dividend amount, the BWC will offset the employer’s account by the amount of the dividend.
If you have questions about eligibility, contact a member of the Barnes Dennig tax team.
When Will Payments Be Issued?
If all of the eligibility requirements have been met, then employers can expect to receive their paper checks in late October or early November 2020.
The BWC will also offer dividend checks to employers who are part of various programs including self-insured, group-retrospective-rating programs, deductible programs, and individual-retrospective-rating programs. The calculation for the dividend check differs depending on the program. It is important for employers to have updated their current address with the BWC and to be aware of any outstanding balances as the dividend payment will be reduced by this amount.
Impact on the State Insurance Fund
The BWC states that even after the dividend is paid, the net position of the State Insurance Fund for injured workers remains strong due to investment returns, declining injuries, and decreasing reserves.
If you have any questions about eligibility requirements or other concerns regarding this dividend payment, please reach out to a member of the tax team at Barnes Dennig or give us a call at 513-241-8313. We’re here to help.