SELF-INSURED EMPLOYERS ENTITLEMENT TO REIMBURSEMENT OF OVERPAYMENTS FROM THE BUREAU OF WORKERS’ COMPENSATIONSURPLUS FUND

October 2003

Three years ago, the Ohio Supreme Court ruled in State ex. rel. Sysco Food Services of Cleveland, Inc. vs. Industrial Commission that under Ohio Revised Code §4123.512(H) self-insured employers are entitled to be reimbursed for any payments made on a claim that was initially contested by the employer and subsequently disallowed by the Commission.  Since that decision was issued, the Bureau of Workers’ Compensation (BWC) applied that case narrowly by  reimbursing only those employers who initially contested a claim but were ordered by the Industrial Commission to pay benefits that were later disallowed on appeal.  In cases where the employer did not initially contest the payment of benefits and it was later found by an administrative and/or court ruling that the benefits should not have been paid, the BWC have not allowed reimbursement but instead have directed the self-insured employer to offset the claimant’s future benefits to recoup the overpayments.

                   On September 16, 2003, the Franklin County Court of Appeals in Columbus, Ohio issued a decision in State ex rel. Kokosing Construction Company vs. Ohio Bureau of Workers’ Compensation rejecting the Bureau’s limited application of the Sysco case.  A copy of the Kokosing decision is enclosed.   In Kokosing the Court held that a self-insured employer is entitled to reimbursement rather than a future offset of payments of compensation or benefits that a final administrative or judicial decisionmaker determined should not have been made.  The reimbursement is available regardless of whether the employer initially contested the claim for benefits.  Kokosing involved a claim that was originally certified and benefits paid but which was later decertified based upon fraud.  The Court ruled that the company was entitled to reimbursement from the surplus fund for all benefits and compensation paid regardless of the fact that it did not originally dispute the claim.

                   This decision will likely be appealed to the Ohio Supreme Court.  However, it is our recommendation that based upon this case our self-insured clients should seek reimbursement of any overpayments made in claims where the payment of the benefits was subsequently disallowed.

                   If you need assistance obtaining reimbursements from the surplus fund or with any workers’ compensation related matter, please do not hesitate to contact us. 

                   As a reminder, we offer our clients workers’ compensation representation as part of the services of our labor and employment law group. We represent state funded and self-insured employers at the administrative and court level with the goal of assisting employers in managing and controlling th