The Experience Rating program is evaluated every 3 to 4 years. The most recent review was completed in 2014. The recommendations from this review will be implemented in 2017. Below are three changes to the Experience Rating Program based these recommendations:
The base premium threshold, which is the dividing point between the Standard and Advanced Programs, is increasing from $15,000 to $21,000.
Standard Program employers who have claims recorded as time loss for medical appointments only will be excluded from their experience rating calculations.
A business in the Standard Program who will move to the Advanced Program will maintain their existing discount until there is a new claim.
Experience Rating Program
The Experience Rating Program provides incentive to make injury prevention and safety a priority in the workplace. The program adjusts the industry premium rate to reflect your business’s individual claim history. You may receive a discount for a positive claim history or be surcharged for a poor claim history.
Employers in the Experience Rating Program participate in either the Standard or Advanced Program based on their premiums over a three-year period referred to as the evaluation window.
Businesses with premiums of less than $21,000 over three years participate in the Standard Program. This program is frequency based.
Businesses with $21,000 or more in premiums over three years participate in the Advanced Program. This program is cost based.
Discounts and surcharges are calculated at the end of each year after the industry premium rates have been approved. The Premium Rate Notice letter and Experience Rate sheet are mailed in early December to provide notification of your business’ industry premium rate and any discount or surcharge that will be applied. This information will help you to understand the impacts of your claims on your premiums. This information can also be located in the Reports section on your Online Services account after these documents have been generated in December.
A Certificate of Achievement will be issued to businesses who receive a discount. This certificate is mailed along with your Premium Rate Notice letter. Businesses with multiple rate codes are not eligible for a certificate if there is a surcharge in any of their rate codes.
For more detailed information regarding your claim costs and premium information, your Online Services Account provides the following reports:
Employer Experience Summary is a five-year history of your Experience Rating information and claims records, including time loss and no time loss counts and claim costs.
Annual Costs per Claim provides the total costs per claim per year for the last five years.
Total Costs per Claim details the total costs for each claim for the most recent five-year period.
Statement of Injury Costs provides detailed payment information for each claim with costs.
You are a part of the Standard Program if you had less than $21,000 in base premiums in this evaluation window (2013-2015). Base premiums are calculated using the industry premium rate (before a discount/surcharge is applied).
Base Premium = Assessable payroll reported by the employer/$100 x Industry Premium Rate
The Standard Program is frequency based. Your discount or surcharge is strictly based on the number of time loss claims in the evaluation window. The greater the number of time loss claims, the higher your surcharge will be. Time loss claims for medical appointments only are excluded from the discount or surcharge calculation (effective 2017). The costs of claims are not considered in the Standard Program.
Maximum Discount in Standard Program = 25%
Maximum Surcharge in Standard Program = 75%
In order for a business to be eligible for a discount in the Standard Program, a business must have been assessed the minimum required base premium for each year in the three-year evaluation window. The minimum required base premium for each year is $100.00.
The table below shows how discounts or surcharges are determined.
A business in the Standard Program with an industry premium rate of $2.00 with zero claims in the evaluation window, would receive a 25% discount. Once the Experience Rate Discount is applied their Net Premium Rate will be $1.50.
Example of a Surcharge
A business in the Standard Program with an industry premium rate of $2.00 with eight claims in the evaluation window would receive a 75% surcharge. Once the Experience Rate Surcharge is applied their Net Premium Rate would be $3.50
The Experience Rating Program uses three complete years of data when calculating discounts and surcharges, which means there is a one-year delay until a claim impacts your net premium rate. For example, a claim reported in 2016 will impact your Experience Rating discount or surcharge in 2018, 2019 and 2020. This is because the calendar year of 2016 will be part of the evaluation window for 2018, 2019 and 2020 experience rate calculations.
In the Standard Program, preventing injuries is the best way to influence your discount or surcharge as discounts are based on the number of claims. For information on safety training and programs please visit www.worksafesask.ca.
You are a part of the Advanced Program if you had at least $21,000 in base premiums in this evaluation window (2013-2015). The maximum discount in the Advanced Program is 30% and the maximum surcharge is 200%.
Base Premium = Assessable payroll reported by the employer/$100 x Industry Premium Rate
The first step in determining your discount/surcharge is calculating your weighted loss ratio.
Weighted Loss Ratio (WLR): The ratio of capped costs to base premiums, weighted by year. To recognize emerging trends and improved safety performance, more weight is applied to the most recent year in the evaluation window as follows:
The WLR is then used to calculate your base discount/surcharge. This is done by comparing your WLR to the industry WLR.
If your WLR is better than the industry you could receive a discount. For every 3.33% better than the industry, you could receive up to 1% of discount. Base Discount = (Firm WLR – Industry WLR) / (Industry WLR) 3.33%
If your WLR is worse than the industry you could receive a surcharge. For every 1.5% worse than the industry, you could receive up to 1% of surcharge. Base Surcharge = (Firm WLR – Industry WLR) / (Industry WLR) 1.5%
Your base discount/surcharge is then adjusted by the eligibility factor and participation factor. Eligibility Factor: Provides opportunity for new employers with only one year of experience to receive a discount/surcharge. This factor is based on the number of consecutive years an employer has premiums in the evaluation window.
1 Year Of Premiums = 33% Eligibility Factor
2 Years Of Premiums = 67% Eligibility Factor
3 Years Of Premiums = 100% Eligibility Factor
Participation Factor: Accounts for the size of the business. The participation factor is based on base premiums in the three year evaluation window. The higher the premiums, the more fully an employer participates in the program. Every employer starts with a base participation factor of 41.5% and increases 1% for every $1,500 in additional base premiums over $21,000.
For example: If you have $45,000 in base premiums your participation factor is 41.5% + 16% = 57.5%.
Experience Rating Discount/Surcharge Calculation
**To be eligible for a discount or surcharge in the Advanced Program, employers must have premiums in the most recent year of the evaluation window. Employers who do not meet this criteria will pay the industry premium rate.
Calculating your firm’s Net Premium Rate under the Advanced Program
The Experience Rating Program uses three complete years of data when calculating discounts and surcharges, which means there is a year delay until a claim impacts your net premium rate. For example, claim costs charged in 2016, will impact your Experience Rating discount or surcharge in 2018, 2019 and 2020. This is because the calendar year of 2016 will be part of the evaluation window for 2018, 2019 and 2020 experience rating calculations.
The Experience Rate calculation in the Advanced Program use Capped Costs instead of total costs. Capped Costs limit the annual costs for individual claims to the maximum assessable wage for each year. For example if an individual claim had costs that exceeded $69,242, the calculation would not use any amount over this value in 2016. Capped Costs for individual claim costs in 2017, will be capped at $76,086.
In the Advanced Program, reducing claim costs is the best way to influence your discount or surcharge. Preventing injuries and having return to work programs can help lower claims costs. For information on safety training and programs please visit http://www.worksafesask.ca/.
Effective for 2017 rates, employers who will move from the Standard Program to the Advanced Program will maintain their discount or pay at the industry premium rate until a new claim enters the evaluation window. This is intended to ease the transition from a frequency-based Standard Program to a cost-based Advanced Program.
A business in the Standard Program with zero time loss claims in the evaluation window for 2013, 2014 and 2015 would receive a discount of 25% on their 2017 Net Premium Rate. If in the following year the business has base premiums above $21,000, it is now part of the Advanced Program for 2018. If there were no new claims in the evaluation window of 2014, 2015 and 2016 for their rate in 2018, the business would maintain their discount of 25%. However if there was a claim in 2016, their Experience Rate discount or surcharge would be calculated using the Advanced Program parameters.