Business buyers & Ohio workers’ compensation

Regardless of what your accountant and attorney tell you, if you purchase all or part of a business and will basically continue with the same equipment, processes, employees and clients, then the Ohio BWC will transfer the associated claims and payroll history to the new owner.  With so many factors the same, the risk of injury will be similar and so it makes sense to transfer the experience.  Beware: as the buyer, you could also end up with any outstanding amounts due.

It’s vital that the due diligence process include obtaining the claims and payroll history.  One option is to use the AC-4 form which must be signed by the seller and buyer.  This form will provide information that is static, like a balance sheet.  Your accountant won’t have the formulas and factors to project your future workers’ comp premiums, and that accountant also won’t have access to the claims information, and therefore will be unable to predict how claims activities will impact the future premiums. 

Your best option is to add to your due diligence team an independent workers’ comp TPA (third party administrator) who is experienced in such forecasting and will use an alternative to the AC-4 form to obtain the maximum information.

The TPA can also assist with claims management during the transition, and then help change all the claims and account information to you as the buyer.  Beware: the BWC will keep sending claim and premium information to the seller until the buyer’s team gets it changed.

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