By Olivia D’Orazio
Under the current WSIB system in Ontario, employers fit into one of three categories that determine how adjustments are calculated. Once the insurance board moves to its proposed system, employers will still receive an experience rating, which will still factor into adjustments, but the calculation itself will face reform.
“The new system will have one calculation for all employers,” says Michele Bruton, senior WCB financial analyst for Isthmus Legal. “So (the WSIB) is wiping out three experience rating programs that people know and use currently and are inputting a different system that is going to have different impacts and implications, and different ways to manage claims.”
The new system will be a hybrid of what is currently used in British Columbia, New Brunswick and Quebec, and could compel employers to change the way they forecast and budget for the year.
“They’re changing how much they’ll charge for overage and how much they’ll give back for underage,” says Sandeep Jindal, legal counsel for Isthmus Legal.
Two of the current systems, NEER, which is for non-construction companies with annual claims over $25,000, and CAD-7, which covers the construction industry, are retrospective. Employers pay an upfront fee – or receive a rebate – if they go over or under their expected claims cost for the year, as determined by their experience rating.
However, the new system, like the MAP calculation for companies with annual claims up to $25,000, will be prospective, so an employer’s premium would be adjusted based on the experience rating they receive that year.
“If you’ve already paid a surcharge, then (the WSIB) bases your premium on a claim you’ve already paid for – it’s double dipping,” Bruton says. “There’s a huge issue with how they’re going to implement it and whether or not it’s actually going to be fair.”