Ohio employers win $860 million in insurance lawsuit

Updated March 21, 2013 at 12:06 PM
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Ohio employers are collectively owed $860 million after being overcharged by the state insurance fund for over 10 years, a Cleveland judge ruled Wednesday.

CS Monitor reports, Judge Richard McMonagle's decision will affect around 270,000 people, most of them small-business owners, many of whom are unaware they were covered by the class action suit.

McMonagle's ruling rejected the state's argument for paying a smaller amount.

The lawsuit involving the Ohio Bureau of Workers' Compensation began in 2007 alleging the bureau gave discounted premiums to companies that joined group insurance and charged higher rates to companies not in the group to pay for the discounts.

In December, McMonagle ruled for the latter, agreeing that they were charged unfair premiums from July 2001 to July 2009, and a new fee structure was set in place. The new configuration required the bureau to change their premium for injury insurance. The bureau complied by setting a maximum discount of 53 percent for group plans.

The accusers were originally suing for $1.3 billion in compensation, which included interest on the amount claimed. But McMonagle decided to not award the interest.

McMonagle awarded $860 million and said the figure was "calculated accurately."

The bureau, on the other hand, is disappointed with the ruling and plans to appeal, thus delaying the possibility of immediate reimbursements.

James DeRoche, a Cleveland attorney for the business owners, said the plaintiffs were excited that justice prevailed and are looking forward to receiving their compensation.

"Now is the time for the BWC to do the right thing and immediately reimburse these businesses," he said. "If the BWC is truly business-friendly it will not further delay payment so tens of thousands of small businesses can reinvest those dollars into creating and protecting Ohio jobs."

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