The New WSIB Rate Framework (For Ontario Only)

October 21, 2019

 

On January 1, 2020, the WSIB in Ontario will be replacing all experience-based rating programs (NEER, CAD-7 and MAP) with a new premium rate-setting model. According to the WSIB, the rationale behind this change is that the “rate framework is an innovative rate-setting structure intended to increase the transparency of the premium rate setting process tobetter align employer premium rates with actual costs of the system.”

 

The new framework will affect both the employer classification and premium rate setting as follows: 

 

Employer Classification

  • Adoption of the North American Industry Classification System (NAICS)

  • The current system will change from 800 classifications to 34 industry classes/subclasses

  • Primarily a single classification will be used based on predominant business activity

  • An employer can request multiple classifications, but must meet the following criteria: business activity is not significant & not integrated with the employer’s other operations

 

Premium Rate Setting 

  • Class/subclass premium rates will be based on collective experience of all employers within that class/subclass

  • This rate will then be adjusted to reflect individual experience of each employer 

  • Three variables will be considered: 

    • insurable earnings

    • number of allowed claims

    • actual claim costs

  • Actual claim costs reflect the employer’s weighted claim costs over a 6-year period weighted period (years 1 to 3 = 66.6% and years 4 to 6 = 33.3%)

  • Any changes to an employer’s premium rate will be phased in over time in order to give the employer time to adjust to the new rate 

 

The best way to prepare for the upcoming changes is to take proactive measures to control your costs now. This can be done by doing the following:

 

  • Reduce/prevent injuries from occurring in the first place

  • Have an effective claims management system in place that includes Early and Safe Return to Work program and objecting to entitlement of claims, when warranted

  • Apply for cost relief through SIEF, transfer of costs, 3rdparty negligence

  • Consider if a claim is a recurrence vs. a new claim

 

If you would like to find out more information regarding the upcoming changes you can either visit the WSIB website at https://www.wsib.ca/en/rate-frameworkor email WSIB at rateframework@wsib.on.ca

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