Ohio overcharged about 270,000 businesses for workers’ compensation premiums and must repay them, a county judge said.
It’s a ruling that could cost the state hundreds of millions of dollars.
The Ohio Bureau of Workers’ Compensation plans to appeal the decision issued Friday.
A group of mostly small businesses sued Ohio in 2007 for $1.3 billion, saying that they paid too much for their workers’ compensation premiums between 2001 and 2008.
Cuyahoga County Judge Richard McMonagle agreed but has asked the group to lower their monetary request because they are not owed interest on the premiums.
“It will be something less than a billion dollars, but still a substantial amount of money,” said Jim DeRoche, an attorney for the businesses.
He said the ruling will end up being good for the state’s economy because the money will go to small businesses.
“This ruling gives the state the opportunity to help the hundreds of thousands of Ohio employers grow their businesses, create jobs and move Ohio forward,” DeRoche said.
The judge set a final hearing for March 14 to determine how much money should be paid.
“While we are disappointed in the decision, we continue to maintain that our actions were lawful and that the plaintiffs’ claims are without merit,” Bill Teets, a spokesman for the workers’ compensation bureau, told The Plain Dealer.
The lawsuit said the bureau gave discounted premiums to companies that joined for group- insurance plans and charged companies not in the groups excessive rates to pay for the discounts.
Companies paying group rates were not charged premiums that covered their losses, lawyers for the small businesses said. That forced the other companies to cover the difference, they said.
The bureau discounted its group plans as high as 90 percent.
McMonagle already ordered the bureau three years ago to change its system for setting premiums for injury insurance. The maximum discount set by the bureau for group plans for group plans is 53 percent.