Dear Editor,

  Employers and injured workers should be able to deal with BWC directly. There is no need for employers to work through insurance companies which charge high fees, for them to get into a favorable groups. These companies make big profits and pay their executives high salaries. When a worker gets injured, another for profit company administers the case, overseeing the costs of hospitals, physicians etc. To many injured worker must sue to get their just benefits. Often the employer is penalized because the injured worker is allowed to not work for a longer time than necessary. Often if the employee works for cash on another job during his “recovery”, no action is taken even when the BWC and the company administrating the case know it. When an employer has one or more injury to his employees, the premiums go so high that small companies sometimes must go out of business.It also causes businesses to go to other states. 

In a recent year BWC paid out $2.08 billion in benefits and employers paid $2.2 billion into the fund. BWC has assets of $21 billion. Why is this surplus so large? How can there be a catastrophic loss requiring this large surplus? Sixty companies have been managing the investments. Most management fees are 1% per year, for a total of $220 million. Some of the investments were high risk, such as rare coins and hedge funds. It has been proven that there was pay to play by some of these investment managing companies. By contrast, about 80% of the School Teacher’s Retirement money is invested by employees in houses, at a small fraction of a fee. As with privatization of most governmental functions, this system in BWC leads to higher costs, large salaries for executives of the companies and more chances for fraud. There is ineffective oversight and auditing of the BWC.

Sincerely, Albert A. Gabel
Professor Emeritus
Ohio State University