The WCB has adopted changes to its rate model which will impact the rates employers pay. The WCB enhanced its rate model based on recommendations that came from an external actuary’s (Eckler) review in 2016.
Eckler analyzed WCB’s model by reviewing detailed information on employers’ payrolls, classification and claim costs, they performed various calculations and tests, and reviewed the rate setting models in place in several other Canadian workers’ compensation boards In formulating a rate model, competing principles must be balanced. The rate model should be robust and sustainable, satisfying the needs, goals and expectations of employers, while being actuarially sound, relatively simple and easy to understand, to communicate and to administer.
The key principles Eckler applied to guide the WCB’s review of the rate model are:
- Fairness (accountability, equity and incentives for prevention)
- Collective liability (insurance)
- Predictability (rate stability)
- Transparency (ease of understanding).
Impact to premiums employers pay
Transition to the enhanced model will result in changes to some industries’ rates. Some employers’ rates will not be affected, some will decrease and some rate codes will increase. Understand more about the possible changes to your rate code by viewing the past recorded industry session associated with your rate code.
When will the enhanced model be implemented?
After considering the feedback received from employers following 16 industry information sessions in February and March of 2017, the Board approved full transition to the enhanced rate model in 2018.
For 2018 only, to help alleviate the impact for employers whose rate codes are increasing, the WCB Board decided to draw from the Injury Fund to cover additional costs associated with the transition to the enhanced rate model.
Starting in 2019, employers will not have their costs covered for the rate increases that may occur as a result of the transition to the enhanced rate model. Employers who experience a rate increase will be required to pay the increased rates.
Board’s decision based on Employer Feedback
In February 2017, the WCB invited employers’ input on how to transition to the enhanced rate model. The feedback submission closed April 7, 2017. Employers chose from three options for how they’d like the transition to occur:
- Transition to the enhanced rate model immediately (2018)
- Spread transition over 2 years (2018-2019)
- Other transition option
After selecting an option, each section included a comment section for employers to provide more feedback.
Employer feedback results led to the Board’s decision to implement the enhanced rate model in 2018. The Board also decided to mitigate the impact of the enhanced rate model for the 2018 rate year only by drawing from the Injury Fund to cover additional costs for employers whose rate codes are increasing due to the changes.
 Eckler Ltd., (Sept. 2, 2016), Review of the model to establish the premium rates, from https://www.wcbsask.com/wp-content/uploads/2016/10/WCB16-EcklerReport.pdf