*By Steve P. Dlott
Last week, a Cuyahoga County Common Pleas Judge struck down the BWC
group rating program. In his decision, the Judge found that the BWC
unlawfully enacted the group rating program. As a result, the Court
enjoined the BWC from enacting the group rating program effective July
1, 2009.
Buried in the avalanche of news about the Judge’s decision was
the actual legal basis underlying that decision. That legal basis
serves as a powerful lesson to all Ohio employers.
Not surprisingly, media groups have portrayed the decision as
an attempt to correct the devastating inequities in the premium rating
system itself. Employers with stellar claims’ histories have seen their
premiums skyrocket because of one bad claim. Clearly, the system is
fundamentally unfair and punitive.
However, while the Judge’s decision touches on the program’s
inequities, those were not the basis for his decision. Rather, the
underpinning of the decision rests upon the statutory language itself.
The statute that authorizes the BWC to create a group rating
plan states that the plan must be a “retrospective rating plan.”
However, as the disqualified group-rated employers who initiated the
lawsuit pointed out, the BWC’s group rating plan as implemented is
prospective, not “retrospective.” In response, the BWC argued that
“retrospective” language was actually a typo and that the legislature
intended language to read “prospective.”
The Judge invoked a well-known legal principle, noting that if
the language of a statute is clear on its face, the courts must apply it
as written. Here, the Judge concluded the statute’s language is clear:
it says “retrospective.” Accordingly, the Judge found he had no choice
but to enforce the statute as written. Since the group rating program
as implemented by the BWC is prospective and not retrospective as the
statute requires, the group rating plan is unlawful. With this one
decision, the Judge invalidated the BWC’s group rating program and
affected thousands of Ohio employers.
While the BWC has not yet commented on its intentions, it is
likely that the BWC will appeal the decision. It is also likely that
the BWC will request a stay of the Court’s decision pending the appeal
so that the group rating program can proceed as planned on July 1, 2009.
Zashin & Rich will continue to keep employers
informed as more information about this important decision becomes
known.
