Injured LTV workers and their families will be getting their workers' compensation benefits from the state after Jan. 14.
By CYNTHIA VINARSKY
VINDICATOR BUSINESS WRITER
The closing of bankrupt LTV Steel could cost the Ohio Bureau of Workers' Compensation $75 million or more, officials say, as the agency assumes responsibility for the steelmaker's injured workers and pending claims against the company.
That will mean higher costs, as well, for 1,163 of the state's largest companies, which will be assessed to cover the cost of the LTV workers' benefits.
LTV, like many other Ohio companies with 500 or more employees, was self-insured and paid into the state's Self-Insured Guaranty Fund, set aside for injured worker claims.
The Cleveland-based steelmaker, which also has hundreds of employees and thousands of retirees in the Mahoning Valley, is selling its operations after a failed effort to reorganize its debts under Chapter 11 of the federal bankruptcy code. It will make its last workers' comp benefit payment Jan. 13.
What law says: Under state law, BWC chief executive James Conrad explained, the BWC will become responsible for paying active claims and investigating pending claims when LTV stops making its payments.
The state agency will be sending out letters next week explaining the change to about 318 LTV employees and families who are now receiving injured worker benefits or death benefits. BWC plans to increase its assessments to other self-insured companies to raise the money it needs to pay LTV workers' expenses. It will be several months before the agency can determine how much the assessments will increase.
Conrad said the agency will be walking a thin line between treating injured workers fairly and scrutinizing all claims to assure validity and keep costs under control.
"We're in the middle of a pickle," he said.
"The association that represents the self-insured companies will expect tough management of claims, and the labor leaders will be wanting us not to be too tough. All we can promise is, if the claim is legitimate, we'll pay it; if it's not, we'll fight it."
Cutting costs: BWC staffers are proud of their efforts to reduce costs over the past five years to make the state's workers' compensation costs competitive with other states. Conrad said the low rates they've achieved have become an incentive for new businesses to move to Ohio, so the agency wants to keep those costs down.
Jim Samuel, director of corporate affairs for BWC, said LTV bought about $30 million worth of surety bonds over the years, and some of those bonds can be used to offset the cost of its injured workers' benefits.
Samuels said there are many unknowns, however, in the pending cases BWC will inherit.
Asbestosis claims: For example, LTV has 1,765 outstanding asbestosis claims, which have been held in a suspended status by the Ohio Industrial Commission. If approved, the asbestosis claims could eventually cost $1 million or more each, and the cost would have to come from the Self-Insured Guaranty Fund.
The fund is already paying $6.2 million a year to cover injured worker benefit costs for other self-insured Ohio companies that have gone bankrupt. Conrad said the total is likely to double, eventually, with the addition of the LTV expenses.