TeksMed – A Second Premium Rate Reduction for 2017
For many years, the WSIB struggled with an enormous unfunded liability which soared to a massive $14.2 B in 2011. Since that time, the UFL has been cut by more than half to its current level of $5.6 B. This reduction will allow greater flexibility both to serve injured workers and to reduce the premiums that employers pay for WSIB. This will amount to an additional $250 M which will remain in the Ontario economy.
In 2017, employers (province wide), will see a decrease in premium rates – the first premium rate decrease since 2001. Initially WSIB announced the decrease, stating that Schedule 1 employers would see an average decrease in premiums of 5 percent. This statement was recently amended when WSIB issued a notice to advise that premium rates were erroneously calculated using higher Past Claim Costs; as such all premium rates were recalculated, leading to decreases for more rate groups and an increase in the average reduction to 6.2 percent.
Although many industries will not be among those attaining the decrease, it is nevertheless good news that their rates will remain stable after years of steady increases. The only industries that will see rate increases in 2017 will be municipalities and paramedics due to presumptive PTSD legislation.
Rate Framework Modernization
Many Ontario employers have come to understand that the premium rate alone does not determine actual annual WSIB related costs. The current experience rating systems, designed to reward employers with low injury costs and penalize those with high injury costs, add or subtract a substantial amount from the initial premium. Anyone familiar with the terms ‘Projected Future Costs’ or ‘Actual Injury Frequency’ will attest to the statement, “workplace injuries in Ontario are expensive!”
In 2019, this current structure, made up of three separate experience rating systems, is expected to undergo major modernization; WSIB has proposed and is in the final evaluation stages of one unified experience rating system which will evaluate employers individually to establish premium rates that take into account business activities, payroll and claim costs over a 6 year period. 2019 premium rates would therefore take into account experience from 2012-2017, with the latter three years bearing the greatest impact. This new rate framework is more aligned with the systems used by other provincial compensation boards.
 News release: WSIB Announces First Premium Rate Reduction Since 2001 – (Sept 14, 2016) – http://ow.ly/iqzl305prNL
 WSIB: 2017 Premium Rates – http://ow.ly/JM83305psgk
What Employers Need To Do Now
WSIB has kept Ontario employers apprised of upcoming changes through technical sessions, consultations and online publications. Employers must take an active interest and stay engaged throughout the developments in efforts to understand exactly what this change will mean for their business.
Although the changes are a few years away, now is the time to act.
Employers should take the time to thoroughly evaluate their past and current claims experience; take the opportunity to review policies and procedures regarding incident reporting, accident investigation and return-to-work practices; consider merging new and historical data for more comprehensive reporting that may highlight operation trends or weaknesses; make changes as required to ensure that you are in the best position possible when the new rate framework comes into effect.
While it may seem like an overwhelming task, the good news is that it is a task that will pay off.
For additional information or a consultation, you can engage the help of our experts by contacting TeksMed at 1-877-850-1021.