WSIB’s new model for rates that makes planning easier
Ontario manufacturers to make the transition in 2020.
Are you ready for the Ontario WSIB’s new premium rate model? Beginning Jan. 1, 2020, the Workplace Safety and Insurance Board will introduce a new way of setting premium rates for almost 300,000 businesses across Ontario.
The new model will make it easier to understand how businesses are classified, better reflect individual claims experience and help businesses plan for the future by providing projected rate information.
What’s changing in the new model?
First, streamlining how businesses are classified using the North American Industry Classification System (NAICS), which is already used by the Canada Revenue Agency and Statistics Canada.
This change will move 155 different rate groups to 34 classes/subclasses.
Second, setting an average premium rate for each class based on its risk profile and share of responsibility to maintain the insurance fund. This will make premium rates easier to understand.
Each NAICS class breaks down into a series of risk bands, and each risk band will have an associated premium rate. The difference between each risk band will be approximately 5%.
Next, a profile using specific claims history will compare risk to other businesses in your class. Those with similar risk profiles will be assigned to the same risk band and premium rate.
Third, WSIB will help companies plan for any changes in premium rates.
Manufacturers will no longer have to wait for rebates or surcharges. The current approach to rate setting, including MAP, NEER and CAD7 experience rating programs, will be eliminated. Additionally, the new model will introduce projected rates.
Companies previously in an experience-rating program will receive final NEER and CAD7 statements in 2020, as well as final adjustments, which will include an assessment of 2019. Businesses registered under the MAP program received their final statement in 2018, and will receive any final adjustments this year.
To ensure smooth transitions into the new model, initial rate increases will be staggered over time, while rate decreases will be applied immediately. Here’s how the transition will work:
In 2020, each business will be assigned a starting point rate and projected premium based on previous rates, claims experience, size of business, NAICS classification and whether or not it was in an experience rating program previously. This will determine the 2020 premium rate. Businesses with projected premium rate decreases will move down to their projected risk band.
In 2021, businesses with projected premium rate increases will move up a maximum of one risk band from the 2020 level. Businesses with projected premium rate decreases will move down to their projected risk band.
In 2022, businesses that have not yet reached their projected premium rate will move up a maximum of two risk bands above their 2021 risk band. Businesses with projected decreases will move down to the projected risk band.
Starting in 2023, policies for premium rate setting under the new model will be in effect. Businesses with projected premium increases will see rates increase up to three risk bands per year until they reach the projected premium rate. This protects them from any sudden changes to premium rates. Businesses eligible for decreases will see their rates decrease up to three risk bands per year until they reach their projected premium rate.
Manufacturers can apply WSIB programs and tools to improve safety performance now. Compass allows anyone to find and compare health and safety statistics for workplaces across the province and the new Workwell app evaluates health and safety management systems. There are also services and resources customized for small businesses (visit www.wsib.ca).
The 2020 premium rates are coming this fall and WSIB will help companies prepare. For more information or to sign up for WSIB’s monthly webinars and newsletter about the new premium rate-setting model, visit wsib.ca/rateframework or e-mail email@example.com.
Janine Dyck is vice-president of employer services, Workplace Safety and Insurance Board (WSIB), Ontario.
This article appeared in the September 2019 print edition of PLANT Magazine.