The annual BWC True-Up is coming up next month, August 15th. You probably have some questions about that, I know I did.
What does “True-Up” even mean?
Very good question. In accounting, “true-up” means to make an adjustment to a previously estimated amount. Calculations for the estimation are made based on previous fiscal years’ data and industry standards. Estimates are paid through installment payments either bi-monthly, quarterly, semi-annually, or annually. At the end of the year, the calculations are re-run with actual amounts to replace the estimated ones. The true-up is the adjustment made to account for the difference between the estimated total and the actual total.
Ok, so it’s an adjustment. Where does BWC come in?
The Ohio BWC (Bureau of Worker’s Compensation) True-Up process is part of their transition to a prospective premium billing program, which began in 2015. This switch means that BWC requires compensation from employers before it will provide coverage for their employees. Because the number of employees may fluctuate, BWC sends out an estimated 12-month premium each June. There are multiple payment installment options available.
So, the BWC Annual True-Up Adjusts the difference between the estimated premium based on previous period’s employee wages and the premiums on actual payroll?
Exactly. Employers must reconcile their actual payroll annually. The annual BWC True-Up is due on August 15th, 45 days after the end of the policy year, June 30th.
Do I really need to file a BWC True-Up?
Simply put, yes. Currently, if there’s no balance due BWC won’t lapse your coverage, but they will drop you from any rating or discount plans you’re currently in, which can have a substantial impact on your future payments. Even if there was no difference between the estimated and actual amounts or if you had zero payroll, you are still required to file a true-up.