Just recently I read about the Workplace Safety and Insurance Board (WSIB) announcing a rate reduction of 3.3% for 2018 premiums. This is certainly good news for my clients in the construction industry.
When I read about a WSB rate cut, I immediately thought ‘that must be a misprint. Premiums don’t go down they only go up, up, up.’. http://www.wsib.on.ca/WSIBPortal/faces/WSIBDetailPage?cGUID=WSIB071327&rDef=WSIB_RD_ARTICLE&_afrLoop=2653952110307000&_afrWindowMode=0&_afrWindowId=rhhjdr8dl_122#%40%3FcGUID%3DWSIB071327%26_afrWindowId%3Drhhjdr8dl_122%26_afrLoop%3D2653952110307000%26rDef%3DWSIB_RD_ARTICLE%26_afrWindowMode%3D0%26_adf.ctrl-state%3Drhhjdr8dl_150
WSIB as I found out, is funded solely through premiums and not government funding. Apparently this decrease was based on costs associated with the chronic mental stress legislation and other factors.
To accomplish this, WSIB says data was analyzed over the past 10 years for different industry classes. In the meantime, WSIB says they are dedicated to premium stability so businesses can plan ahead.
- Only increase related to Chronic Mental Stress legislation
- Increases will be held to 5%
- Decreases will be allowed upto 7.6%
How Rates are Determined
Premiums are set according to three different aspects for each rate group. As this in an insurance company of sorts, a lot of the jargon is insurance industry and legalese.
- New Claims Cost This is for the total projected future costs of injuries that can be expected to arise in the upcoming year.
- Past Claims Cost This cost is to recover WSIB’s unfunded liability.
- Administration Expenses This is the cost to administer the workplace compensation system in Ontario and to fulfill legal responsibilities under the legislation.
All three aspects together make up the premium rate.
The premium rates are a group rate not an individual employer. In order for a reduction to take place, the whole group’s experience must have improved compared to with its class and Schedule 1 together.
There will be offering technical sessions at Simcoe Place 200 Front Street West in Toronto and via webinar in November 2017.
Mathew Jazenko is owner of MRJ Financial Solutions and enjoys helping small businesses in the construction industry keep more of what they earn. email@example.com or 289-500-1978