agenda - saskatchewan wcb · agenda – collective liability – the rate setting process ......
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Agenda
– Collective Liability – The Rate Setting Process – The Experience Rating Program – Reducing Premium Rates – Q&A
Collective Liability
Historical Compromise
Employers agreed to accept collective
liability
Workers gave up their right to sue
Why do you pay WCB premiums?
Your premium assessments fund the compensation system
Industry Classification
• 10 industry classes, 33 industry groups, 50 rate codes • Classification system is based on industrial undertaking • Rates are set at the rate code level according to injury and cost experience
Rate Code
Industry Group
Class T
Transportation
T4
T42 Transportation,
Courier, Commercial Bus
T5
T51 Operation of
Railways
T6
T61 Commercial Air Transportation
The Rate Setting Process
Key Premium Rate Drivers
Premium Rates
Injury Rates Durations
Claims Costs
Payroll
2010 2011 2012 2013 2014Total Injury Rate 8.70% 8.73% 8.65% 7.80% 6.99%TL Injury Rate 3.12% 3.05% 2.79% 2.54% 2.41%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%Claims per 100 Workers
2015 Total Injury Rate Target: 6.80%
2015 TL Injury Rate Target: 2.20%
Injury Rates
Claims Duration
2015 Target: 34 days
2010 2011 2012 2013 2014Duration 34.67 34.44 38.89 34.88 37.01
32.0
33.0
34.0
35.0
36.0
37.0
38.0
39.0
40.0Average # of compensation days, 12-month window
2010 2011 2012 2013 2014Time Loss 11,574 11,516 10,774 10,116 9,715Total 20,672 21,378 22,607 20,996 18,441
0
5,000
10,000
15,000
20,000
25,000
Claims Accepted
2010 2011 2012 2013 2014Health Care 66,568 72,973 70,534 73,049 71,727Compensation 63,080 64,752 65,347 61,808 59,095Earnings Replacement 47,188 43,670 43,944 43,164 42,789Survivor Benefits 10,803 10,268 10,365 10,246 10,622Vocational Rehab 4,290 4,127 3,371 4,026 3,697
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
($000)
Annual Claims Costs
2010 2011 2012 2013 2014* 2015*All Class $15.63 $16.98 $18.13 $18.85 $20.07 $21.21
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00($ billions)
Payroll: All Industry Classes
* Projected
Industry premium rates are set based on the collective claims experience of all employers within a rate code
Rate setting process ensures today’s employers pay for the cost of today’s claims
2015 premiums pay for the lifetime costs of all claims that occur in 2015
The Experience Rating Program adjusts industry premium rates based on individual employer’s claims experience
Setting Premium Rates
Uses historical costs and spending patterns: ‾ 5 years for wage loss ‾ 3 years for health care and vocational rehabilitation costs
Projects the number of claims expected next year
Calculates future costs for expected claims (50 years)
Industry premium rate = revenue required / payroll
The Rate Model
$1.63 $1.61 $1.60
$1.58
$1.51
$1.46
$1.35
$1.40
$1.45
$1.50
$1.55
$1.60
$1.65
2010 2011 2012 2013 2014 2015
Effective Rate per $100 Assessable Payroll
Premium Rate History
The Experience Rating Program
Provides financial incentive to positively influence injury prevention and workplace safety
Adjusts industry premium rates to reflect individual employers claims history
Employers who cost the system more, pay more
Program is evaluated by an external review committee every 3-4 years. Review completed in 2014 and recommendation under review.
Experience Rating Program
• Uses a 3-year window for premiums, costs and claim counts
• 3 most recent complete years at the time of the experience rating run
Experience Rating Program
2011 2012 2013 2014 2015
2013 Include 2012 Include Include 2011 Include Include Include 2010 Include Include Include 2009 Include Include Include 2008 Include Include 2007 Include
• For employers with base premiums less than $15,000 • Maximum Discount = 25% • Maximum Surcharge = 75% • Frequency Based
Standard Program
# of Time Loss Claims Discount Surcharge
0 -25%
1 or 2 No Discount or Surcharge
3 +25%
4 +50%
5 or more +75%
• For employers with base premiums of at least $15,000 • Maximum Discount = 30% • Maximum Surcharge = 200% • Cost Based – comparison to industry weighted loss ratio
(WLR)
Advanced Program
Firm WLR
Industry WLR Discount
Firm WLR
Industry WLR Surcharge
An employer will not be eligible for a discount if: 1. A fatality occurs and is accepted in either the current or
previous year
2. The firm’s Employer Payroll Statement was not submitted by February 28 of the current year
3. There has been a conviction under Section 217.1 of the
Criminal Code of Canada within the current or previous year. This law defines criminal charges for employers who fail to provide safe workplaces
Special Provisions
Experience Rating Distribution
56%
3%
41%
Discount Surcharge Industry Rate
Premiums = Payroll ÷ 100 x Net Premium Rate
Calculating Your Premiums
Rate Code: B11 – Construction Trades Industry Premium Rate: $1.63 Payroll: $5,000,000 Experience Rating: 30% discount (-$0.49) Net Premium Rate: $1.14 Premiums = $5,000,000 ÷ 100 x $1.14 = $57,000
Rate Code: D32 – Operation of Oilwells Industry Premium Rate: $0.81 Payroll: $5,000,000 Experience Rating: 75% surcharge (+$0.61) Net Premium Rate: $1.42 Premiums = $5,000,000 ÷ 100 x $1.42 = $71,000
Reducing Premium Rates
An employer in the Standard Program, with $2.00 industry premium rate:
Reducing Premium Rates
Payroll = $200,000 4 Time Loss Claims
3 Time Loss Claims
2 Time Loss Claims
0 Time Loss Claims
Experience Rating 50% surcharge 25% surchargeNo discount, no surcharge 25% discount
Firm Premium Rate $3.00 $2.50 $2.00 $1.50 Base Premiums $4,000 $4,000 $4,000 $4,000 Discount/surcharge $2,000 $1,000 n/a ($1,000)Net Premiums $6,000 $5,000 $4,000 $3,000
An employer in the Advanced Program, with $1.00 industry premium rate and $4M payroll per year.
Reducing Premium Rates
Payroll = $4 Million Example 1 Example 2 Example 3 Costs per year $40,000 $10,000 $4,000 Firm WLR 100 25 10 Industry WLR 50 50 50 Experience Rating 67% surcharge 15% discount 24% discount Firm Premium Rate 1.67 0.85 0.76 Base Premiums $40,000 $40,000 $40,000 Discount/Surcharge $26,800 -$6,000 -$9,600 Net Premiums $66,800 $34,000 $30,400
Awareness Campaigns
Education & Training
Targeting Strategies Partnerships
Prevention & Safety
Q&A