The Rate Framework Reform process will significantly change how the WSIB assesses an employer's premium.
WSIB is undertaking one of its largest and significant reform to employer's Rate Group Classification System. The proposed changes are scheduled to take place starting in 2018 with full implementation by 2021.
Currently WSIB has three Experience Rating programs. NEER, CAD-7 and MAP. The "Proposed Preliminary Rate Framework" would abandon the experience rating program and would end multiple rate groups.
Currently, WSIB classifies businesses using a system called Standard Industry Classification (commonly referred to as SIC). The "Proposed Preliminary Rate Framework" is looking at adopting the newer North American Industry Classification System (NAICS) which has 22 class structures.
The proposed new structure would classify a business on their predominant business activity (the work that makes up the bulk of the company's operation) and assigned into one of the 22 NAICS grouping. The WSIB would then determine what premium rate an employer would pay by looking at an individual employer's "Risk Profile" and "Predictability of Experience".
The "Risk Profile" would look into the employers WSIB claim costs and insurable earnings.
"Predictability of Experience" would look at an employer's insurable earnings and the number of claims.
In other words, WSIB would look at an employer's individual risk profile and predictability of experience to determine the extent of an employer's premium. Once this is established, WSIB will compare the employer's safety performance against the average of other employers in the same classification to determine an employer's premium.
The new "Proposed Preliminary Rate Framework" would look at a period of six years of claim experience to set premium rates.
The "Proposed Preliminary Rate Framework" would act as an early warning for employers by providing target premium rates allowing employers to; better identify the future projected path of their premium costs; and take proactive health and safety actions (e.g. prevention and return to work (RTW)) to address the risks.
Additionally, under this new system, WSIB will be reviewing whether to eliminate SIEF (Second Injury and Enhancement Fund).
WSIB is holding a consultation and employer's input will be crucial. The initial consultation is from March - July 2015. In the Fall of 2015 WSIB is to hold "What We've Heard" with key stakeholders and share their feedback.
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For further information please contact Greg Sathmary at (613) 260-0600.