neer & map overview & financial impacts
DESCRIPTION
NEER & MAP Overview & Financial Impacts. HCHSA Safety Group 2005. Prevention Division Phone: (416) 344-1016 Toll Free: 1-800-663-6639 FAX: (416) 344-3493 Web site: www.wsib.on.ca. Experience Rating. What is it? Modifies an employer’s premium based on accident experience - PowerPoint PPT PresentationTRANSCRIPT
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NEER & MAPNEER & MAPOverview & Financial ImpactsOverview & Financial Impacts
Prevention DivisionPhone: (416) 344-1016
Toll Free: 1-800-663-6639FAX: (416) 344-3493
Web site: www.wsib.on.ca
HCHSA Safety Group 2005
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Experience RatingExperience RatingWhat is it?
• Modifies an employer’s premium based on accident experience• Through refunds/surcharges (NEER) or rate group premium rate adjustments (MAP)
Purpose?
• Encourage employers to promote workplace health and safety
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How MAP WorksHow MAP WorksEligibility (at organization level)3 yr. avg. annual premiums $1,000 - $25,000
Fatality25% additional increase for each
Claim Counts if costs are:> $300 > $500
Claim Costs > $5,00010% additional increase
Excludes IncludesConstruction ConstructionRate Groups Rate Groups
2002 MAP2001 MAP 2001 review
2000 MAP 2000 review 20001999 MAP 1999 review 1999 1999
1998 MAP 1998 review 1998 1998 19981997 review 1997 1997 1997
1996 1996 19961995 1995
2005 MAP2004 MAP 2004 review
2003 MAP 2003 review 20032002 review 2002 2002
2001 2001 20012000 20001999
1994
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MAP Table of MAP Table of AdjustmentsAdjustmentsAverage
Premiums
1,000-1,499
1,500-1,999
2,000-2,499
2,500-4,999
5,000-9,999
10,000-14,999
15,000-19,999
20,000-25,000
0Claims
-5%
-5%
-5%
-5%
-6%
-7%
-8%
-10%
1Claim
0%
0%
0%
0%
0%
0%
0%
-5%
2Claims
+8%
+8%
+7%
+7%
+6%
+5%
+3%
0%
3Claims
+20%
+19%
+17%
+15%
+13%
+11%
+8%
+5%
4Claims
+40%
+38%
+34%
+30%
+26%
+22%
+16%
+11%
5Claims
+50%
+50%
+50%
+50%
+44%
+38%
+30%
+22%
6Claims
+50%
+50%
+50%
+50%
+50%
+50%
+46%
+35%
7 +Claims
+50%
+50%
+50%
+50%
+50%
+50%
+50%
+50%
An additional 10% increase applied for each claim with costs > $5,000 An additional 25% increase applied for fatalitiesMaximum increase is 50%
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How NEER WorksHow NEER Works
Pooling ChargeUnfunded Liability
(Retired by 2014)NEER Insurance Pooling Charge
(LLOD / Claim Limits /Firm Limits / SIEF)
Overhead(WSIB/MOL/SWA/LEG.)
Expected Cost of New Claims
Components of Gross Premium
Rate
Projected Future Cost (Reserves)
Benefit Payments to Date
NEER Insurance Pooling Charge (LLOD / Claim Limits /
Firm Limits / SIEF)
NEER Expected Claim Cost
Organizations
Actual Claim Cost
= Refund $or
Surcharge $
NEER Actual
Claim Cost
Compared
Overhead(WSIB/MOL/SWA/LEG.)
Rating Factor
Surplus (EC>AC) or
Deficit (EC<AC)
X
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2002
AccidentYear
2003
2004
2005
1st
review
2nd
review
3rd Finalreview
3rd qtr 3rd qtr 3rd qtr
NEER Three-Year NEER Three-Year ReviewReview
Projected
Costs
Actual Claims Costs
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ScenarioDuration of
ClaimClaim Type
Claim Age
Non Pension Pension
Discounted Awards
Future Costs
Overhead Costs
Limited Claim Costs
1 Health Care Only 02 16 200 0 200 0 94 2942 3 days 01 16 500 0 500 0 235 7353 3 weeks 04 16 1,700 0 1,700 1,085 1,309 4,0944 20 weeks 08 16 10,200 0 10,200 16,507 12,552 39,2595 52 weeks 09 16 26,200 0 26,200 113,029 65,438 204,6676 69 weeks 09 16 34,700 0 34,700 149,699 86,667 267,200*
*Claim Cost Limit applied
Prem.Expected Cost
Factor %Exp.
CostsLimited
CostsNEER Costs
Rating Factor % Perf. Index
Refund/ Surcharge
Max. Refund
Cost to Employer
50,000 10.08 5,040 0 0 40 0.00 -2,016 -2,016 050,000 10.08 5,040 94 94 40 0.02 -1,978 -2,016 11850,000 10.08 5,040 235 235 40 0.05 -1,922 -2,016 29450,000 10.08 5,040 1,309 1,309 40 0.26 -1,492 -2,016 1,63850,000 10.08 5,040 12,552 12,552 40 2.49 3,005 -2,016 6,04850,000 10.08 5,040 65,438 15,120 40 3.00 4,032 -2,016 6,04850,000 10.08 5,040 86,667 15,120 40 3.00 4,032 -2,016 6,048
Prem.Expected Cost
Factor %Exp.
CostsLimited
CostsNEER Costs
Rating Factor % Perf. Index
Refund/ Surcharge
Max. Refund
Cost to Employer
500,000 34.82 174,100 0 0 76 0.00 -132,316 -132,316 0500,000 34.82 174,100 294 294 76 0.00 -132,093 -132,316 223500,000 34.82 174,100 735 735 76 0.00 -131,757 -132,316 559500,000 34.82 174,100 4,094 4,094 76 0.02 -129,205 -132,316 3,111500,000 34.82 174,100 39,259 39,259 76 0.23 -102,479 -132,316 29,837500,000 34.82 174,100 204,667 204,667 76 1.18 23,231 -132,316 155,547500,000 34.82 174,100 267,200 267,200 76 1.53 70,756 -132,316 203,072
Injury Date: May 1, 2004 Weekly Benefits: $500 Overhead Factor 47% Past Awards to: 30Sep05
NEER Return-to-Work Examples
A Financial Business CaseA Financial Business Casefor Health & Safetyfor Health & Safety
in Ontario Workplacesin Ontario Workplaces
A Simple Costing Tool using your NEER Statement
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Part 1: Part 1: Calculating the Calculating the
Financial Business Case Financial Business Case for Health & Safety for Health & Safety
Using NEER InformationUsing NEER Information
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300,000300,000
Cost Sheet 1: Maximum Cost Sheet 1: Maximum RebateRebate
Acc.Year
Premiums
($)Exp. Cost Factor (%)
Expected Costs ($)
NEERCosts ($)
RatingFactor (%)
Perf.Index
2001 550,000 43.13 237,215 300,300 64.48 1.27
1. Expected Costs:
2. Rating Factor:
3. Max. Potential Rebate:
$237,215.00
64.48 %
$152,956.23
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300,000300,000
Cost Sheet 2: Actual Cost Sheet 2: Actual Rebate/SurchargeRebate/Surcharge
4. NEER Costs:5. Expected Costs:6. Difference: X Rating Factor:7. Rebate/Surcharge:
$237,215.00
64.48 %$40,677.21 DR
$300,300.00
$63,085.00
300,000
Acc.Year
Premiums
($)Exp. Cost Factor (%)
Expected Costs ($)
NEERCosts ($)
RatingFactor (%)
Perf.Index
2001 550,000 43.13 237,215 64.48 1.07300,300
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Cost Sheet 3: Unrecovered Cost Sheet 3: Unrecovered RebateRebateand Surcharge Per Claimand Surcharge Per Claim8. Unrecovered Rebate and Surcharge (Line 3 + Line 7):
9. Average Unrecovered Rebate and Surcharge Per Claim:
$152,956.23 CR$40,677.21 DR
Line 3:Line 7:Line 8: $193,633.44 DR
Unrecovered Rebate (Line 8) ÷ No. of Claims
= _______________= _______________
$193,633.44$12,908.90
÷ 15
Max RebateMax Rebate
ActualActual
UnrecoveredUnrecovered
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Cost Sheet 4: Determining Cost Sheet 4: Determining Gross Sales Required to Gross Sales Required to Recover NEER CostsRecover NEER Costs
10. Unrecovered Rebate (Line 8):
11. Company Profit Margin:12. Gross Sales Required: (Line 10 ÷ Line 11):
$193,633.446 %
$3,227,224.00
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Part 2: Part 2: Calculating the Financial Calculating the Financial
Business Case for Health & Business Case for Health & Safety Using Total Costs of Safety Using Total Costs of Injuries (NEER Information Injuries (NEER Information & Company Information on & Company Information on
Direct/Indirect Costs of Direct/Indirect Costs of Injuries)Injuries)
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Cost Sheet 5: Determining Cost Sheet 5: Determining Approx. Total Cost Per Approx. Total Cost Per Injury/IllnessInjury/Illness
13. Unrecovered Rebate (Line 8): $193,633.4414. Determine Direct/Indirect Costs:
15. Add Line 13 and Line 14:
16. Determine No. of Claims: 17. Divide Line 15 by # of Claims:= Approx. Total Cost per claim
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$882,825.00
$1,076,458.44
$71,763.90
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Cost Sheet 6: Determining Cost Sheet 6: Determining Gross Sales Required To Gross Sales Required To Recover From Overall Costs of Recover From Overall Costs of ClaimsClaims18. Overall Costs (Line 15):
20. Gross Sales Required (Line 18 ÷ Line 19)
19. Company Profit Margin: 6%$1,076,458.44
$17,940,974.00
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Web site: Web site: www.wsib.on.cawww.wsib.on.ca
NEER Cost ToolWhere?Prevention - Incentives and Training - New Experimental Experience Rating (NEER) Program - NEER Cost Tool
Map Cost ToolWhere?Prevention - Incentives and Training - Merit Adjusted Premium (MAP) plan for small business - MAP Cost Tool
How much do workplace injuries cost? (NEER)Where?Prevention - Incentives and Training - New Experimental Experience Rating (NEER) Program - NEER Cost Fact Sheets
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RemindersRemindersQuestions? Call 1-800-663-6639
or (416) 344-1016
Drive Safe,Work Safe,
Play SafeBe Safe!