According to the Ohio Legislative Service Commission, H. B. 382 was introduced during the 132nd General Assembly.  The bill includes changes, in what is considered, the minimum safe level (MSL) used in calculating the trust fund solvency of the state.     Ohio based their legislation to accommodate the AHCM (Average High Cost Multiple) of 1.0 that the U. S. Department of labor mandated in their legislation in September of 2010.   An AHCM of 0.5 began in 2014 and increased by 0.1 each year ending in 2019 at 1.0.   Ohio Map

As mentioned in prior newsletter, the AHCM was created through a study completed by the Government of Accountability Office.       The study reviewed all recessions (including the Great Recession) that have occurred over the past twenty-five years.   The results of the study reflected that the states who had an AHCM of 1.0 before the recessions started, did not need to borrow money from the federal government.   As mentioned in the above paragraph, the percentages were elevated each year from 2014 until the desired 1.0 AHCM until achieved.   Each state that reaches the ACHM required can obtain an interest-free loan under the Title XII loan provision.     This is costly for the FUTA portion of the government as they had to borrow from other federal agencies to fund claims during the recession.   It was costly for the states agencies as interest was owed on the balances due causing additional cost to employers in that state.

Although Ohio will qualify for an interest-free loan by the end of 2017, they wanted to make sure they do not fall short in future years.    Ohio has introduced this bill to meet the expectations for the possibility of an interest-free loan if needed.   They have requested their MSL to be equal to 0.75 of the AHCM required which somewhat falls under what the federal government mandated.   The state requested the taxable wage base to increase from 9,500 (2018) to $11,000 effect the January following the passage of the bill.     The duration of benefits is also being requested from 26 to 24 weeks in some instances.   The final recommendation within the bill was to add employee based contributions that would require employers to deduct up to 10% of a quotient determined by the Ohio Department of Job and Family Services.

About half the nation met the AHCM of 0.7 by December 31, 2016.    The counts for 2017, will not be in until around February of 2018.    The deadline is quickly approaching.    More states are going to start considering the AHCM with future rate calculations.   We should see similar legislation in other states as the deadline for the AHCM for December 31, 2019 approaches.


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