Experience Rating Program – Discounts or Surcharges
Effective date: January 1, 2017
Application: All employers.
Policy subject: Rate setting, classification, and experience
Establish guidelines to apply discounts or surcharges.
Evaluation Window is the three years of data used to determine an employer’s discount or surcharge. This is the three complete years immediately preceding the year when the discount or surcharge is calculated. For example, discounts and surcharges for 2017 are determined using data from 2015, 2014 and 2013.
Industry rate code means a collective liability grouping comprised of employers with a similar industrial undertaking or injury experience. All employers with the same rate code have the same industry premium rate.
Industry premium rate means the rate applied to all employers within a rate code expressed as a dollar amount for every $100 of assessable payroll.
Base premiums are the employer’s total premiums due before any discounts or surcharges are applied.
Firm rate is the industry premium rate plus or minus any applicable discounts or surcharges an employer may receive.
- The WCB uses an actuarial based model to set annual premium rates. Industry premium rates are based on the collective claims experience of employers within each industry rate code (POL 13/2017, Rate Setting Model).
- The WCB established the Experience Rating Program in 2005. The Experience Rating Program is an annual process where employers may receive a discount or surcharge to their industry premium rate based on their individual claims experience.
- The following guiding principles are in place to ensure the Experience Rating Program:
- Fairly and equitably represents employers’ individual claims experience.
- Provides incentive that positively influences employer prevention and safety behavior change.
- Contributes to lower injury frequency and claim durations.
- Discounts or surcharges are based on an employer’s individual claims history during the evaluation window.
- Discounts or surcharges are calculated during the annual rate setting process and applied to an employer’s industry premium rate.
- Each line of business an employer operates is designated an industry rate code. An employer may have more than one line of business with different industry rate codes.
- For each of their industry rate codes an employer participate in either the Standard or Advanced Program based on their base premiums over the evaluation window. Discounts or surcharges are determined for each of the employer’s industry rate codes.
- The Standard Program is for employers with base premiums of less than $21,000 over the evaluation window.
- To be considered for a discount or surcharge, an employer must have premiums of at least the minimum annual assessment (POL 07/2011, Minimum Annual Assessment) in each year of the evaluation window.
- Discounts or surcharges are based on the number of time loss claims an employer has during the evaluation window. Claims recorded as time loss for medical appointments only are excluded from the discount or surcharge calculation. See Appendix A – Discounts and Surcharges – Standard Program.
- The maximum discount is 25% and the maximum surcharge is 75%.
- To ease the transition from a frequency to cost based program, employers who move from the Standard Program to the Advanced Program will maintain their discount, or continue to pay the industry premium rate. This will change once the employer has a new claim(s) in the most recent year of the evaluation window.
- The Advanced Program is for employers with base premiums of $21,000 or more over the evaluation window.
- To be considered for a discount or surcharge, employers must have premiums in the most recent year in the evaluation window.
- The Advanced Program is cost based, and discounts or surcharges are calculated based on a review of an employer’s claims cost history within the evaluation window.
- For experience rating purposes, individual claim costs in a given year are capped at an amount equal to the maximum assessable wage (POL 08/2020, Maximum Assessable Wage Rate) to protect an employer from the impact of a single claim.
- An employer’s firm rate under the Advanced Program is determined by calculating their base discount or surcharge. Their discount or surcharge is then adjusted to account for the number of consecutive years the employer has been in business (eligibility factor) and the size of the business (participation factor). See Appendix B – Discounts and Surcharges – Advanced Program.
- The maximum discount is 30% and the maximum surcharge is 200%.
Employers Not Eligible
- An employer will not receive a discount in any industry rate code, if:
- Payroll statements have not been submitted by the annual deadline.
- A fatality has occurred and been accepted within the year or the previous year. This excludes any fatality arising from an occupational disease or other circumstances where the exposure occurred many years prior to the acceptance of the fatality claim.
- The employer or any of their employees have been convicted of a criminal offence for failing to provide a safe workplace (Section 217.1 of the Criminal Code of Canada) within the year or the previous year.
- An employer may receive cost relief under the following circumstances:
- Application of cost relief to the Second Injury and Re-employment Reserve, Disaster Reserve or Occupational Reserve.
- Third party recovery of cost (subrogation).
- Transfer of claim costs to another employer or claim.
- Any other consideration as directed by WCB.
- If an employer receives cost relief on a claim, a credit will be applied to the employer’s claims costs in the year cost relief was applied. Credit for the claim costs relieved will be used to offset claim costs used in the calculation of future discounts or surcharges.
- In situations where cost relief has been granted, employers may request to have their previous years’ discount/surcharge calculation reviewed. Recalculations of discounts or surcharges are limited to the current and previous two years only.
- An employer may request that their discount or surcharge be reviewed or re-considered (POL 20/2013, Appeals – Employer Accounts).
Disclosure of Information
- To facilitate the development of workplace safety programs, statistical information regarding surcharged employers may be provided to another government agency or organization (e.g., Occupational Health & Safety, WCB sponsored industry safety associations). Information disclosed to a third party will follow POL 05/2017, Privacy of Information.
POL 07/2011 Minimum Annual Assessment
POL 08/2020 Maximum Assessable Wage Rate
POL 20/2013 Appeals – Employer Accounts
POL 21/2013 Appeals – Claims
POL 03/2021 Second Injury and Re-Employment Reserve
POL 05/2014 Occupational Disease Reserve
POL 12/2014 Disaster Reserve
POL 05/2017 Privacy of Information
POL 03/2018 Employer Audits
POL 01/2007 Experience Rating Program