Ontario’s Workplace Safety and Insurance Board is changing how premium rates are calculated for almost 300,000 registered businesses across the province.
The WSIB hasn’t changed its rate setting scheme for more than 20 years, says Pamela Steer, the board’s chief financial officer. “We really looked at how we could change the offering to our customers, such that it would make more sense for the modern day. So leveraging technology, big data and risk analytics in order to more transparently provide employers with their premium rates and also to base it more on the risk they present.”
The board is changing the system so the rate an employer pays “is the rate that the employer pays and they don’t get a negative or positive surprise a year and a half after the fact,” says Steer. “So in the new scheme, we have 34 rate classes instead of 155 rate groups, but then within each class has employers based on their size, which tells us what we call predictability. But their size, their number of employees and their own risk will dictate how far from the median of that class’ average rate they will go.”
For example, a large employer that takes health and safety seriously and has very few accidents will pay a much lower rate in its class than the average, she adds.
“Consequently, if you’re a very large employer who doesn’t really take health and safety as seriously as your competitors, and you have a higher risk, which means more accidents, more people getting injured or ill, you’re going to pay a higher rate. And because of the collective liability concept of employer insurance at WSIB, if you’re a very small company, you’re going to be protected, which means your own risk or your own accident history will have a bit of an effect because we wanted to give that positive incentive to those who have really good health and safety records.”
The WSIB is working with employer associations and trade organizations, hosting direct consultations and providing technical seminars and webinars because each industry has different workplace risks, says Steer.
“The rate framework landing page [on the WSIB website] has a lot of interesting information, but it’s also digestible. We are trying to make it as accessible to all of our clients as possible.”
The premium rates will take effect in September. “When we release premium rates . . . we have a lot of information that will come out with that, including the letters that we will send — as we always do — to our employers with the rates. This time, they’ll get an individual rate as opposed to just the class rate.”
WSIB will also be providing employers with a projected rate, says Steer. “That is really important for those customers, and there are a number of them whose rates will eventually go up under this — they are representing more risk or they’re in a risk-adjusted classification.
“We’re going to provide them the rates they would eventually pay based on their current risk and experience to make it easier for all employers to get into this new system because we realize it’s a really big change.”