As Ohio’s economy begins to recover, the state is clearly focused on jobs, and numbers show some growth, but did the state actually harm more businesses in the past?
An NBC4 investigation reveals how one state agency allegedly crushed thousands of small businesses.
While the jobs picture in Ohio is rebounding, a huge shadow is being cast by the past – and the bureaucracy in the Bureau of Workers’ Compensation (BWC).
Small businesses can’t operate without worker’s comp insurance, and in Ohio, they can only get that from BWC.
Unlike other states that carry private insurance, Ohio’s BWC is a monopoly.
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In 2006, Ron Foreman owned a successful contracting company, which used to be located near downtown Ashville, and employed 40 people.
At first, Foreman said his BWC bill wasn’t much. Then, one of his employees had what Foreman described as a minor accident.
It produced a major bill that ended up being too much for his business. It cost more than $48,000 for the first half of 2006, and more than $52,000 for the second half.
“We were making money. I just couldn’t afford $100,000 a year in workers’ comp,” Foreman said.
He tried everything to save himself and his business, even selling his house. But the BWC stood in the way of that, putting a lien on his home.
Two years later, a court removed the lien, but it was too late. He was forced to file business and personal bankruptcy.
And Foreman isn’t alone. In a class action lawsuit, “BWC admits that base rates paid by (non-group) employers were greatly inflated.”
In 2007, a court found that the BWC unlawfully charged excessive premiums, and ordered the bureau to pay 270,000 employers around Ohio $860 million for those illegal overcharges.
But for years, the BWC has refused to pay back small business owners, including Foreman, who is owed nearly $32,000.
The BWC has not paid back a dime, and instead has spent more than $4 million in legal fees to continue to fight, while racking up $72,000 a day in interest.
For weeks, NBC4 repeatedly called and sent emails to BWC for comment. Finally, a statement was issued.
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It was the same statement issued by BWC more than a year ago, stating in part, “We believe the dollars we’ve collected have been spent appropriately.”
NBC4 repeated requested an interview, but was told by a BWC representative that they, “would rather not.”
So NBC4 went to the BWC building, asking for someone to talk in person. After waiting in the lobby for a very long time, a security guard was sent over to tell NBC4‘s Duane Pohlman that they’re not going to take questions.
So Pohlman went to Gov. John Kasich. While he wasn’t in office when the small businesses were overcharged, he has been in office while BWC continues to fight paying back small businesses.
“Well, I have to check. But, if there’s money due to small businesses, we’re very sensitive to it in the state. I’m not aware of this. But I will become aware of it and we’ll see what we can do,” Kasich said.
Just after Kasich provided that response, an aide called NBC4 and said, “Upon reflection, the governor did remember the BWC decision.”
As for the court battle, BWC filed an appeal to prevent paying back all those small businesses. A decision is expected any day now.