By Sean Baird, WSIB Vice President of Employer Services
New premium rate model to be rolled out by WSIB OntarioCanadian Contractor q2`
The new "rate setting model" will be implemented on Jan. 1, 2020
The Workplace Safety and Insurance Board (WSIB) is set to transform how premium rates are calculated for almost 300,000 registered businesses across Ontario. We are introducing a new premium rate setting model that is more simple, easy to understand and will be more reflective of individual claims experience. Following a multiyear engagement with businesses across the province, the new premium rate setting model is a big step forward in making it easier to understand how businesses are classified and how premium rates are calculated. Another major benefit of the rate framework is the ability to see the direction premium rates are headed in the future.
In advance of implementation on January 1, 2020, we want to make sure that businesses are aware of what to expect under the new model.
For example, we are replacing the current classification with a new system called the North American Industrial Classification System, or NAICS, which is the same system Statistics Canada and the Canada Revenue Agency use to classify businesses all across Canada. It will help us streamline our classifications, making it easier to understand why businesses are classified the way they are. In the rate framework, your business will be assigned to a Predominant Class. This is generally based on the Class that represents an employer’s largest percentage of insurable earnings.
The new system will ensure that premium rates are fair and transparent. When calculating premium rates, your business’ individual claims experience will be taken into account so you will be paying a rate based on your actual workplace injury history. We will also provide businesses with something called projected premium rates. Projected premium rates show you the future direction (up or down) of your insurance premium rates. This new rate information will allow businesses time to prepare and adjust for future rate changes. Changes to premium rates will be capped so they are spread over time to allow businesses to adjust to any changes gradually.
The new model will not affect the overall total amount of premium dollars collected by the WSIB. The rate framework is revenue neutral and we will continue our risk sharing arrangement among all employers who collectively pay premiums to maintain the insurance fund.
What’s changing in construction?
Since we are adopting a standardized classification system, how construction organizations are classified will change. Currently construction is made up of 13 separate rate groups. Under the new model, this will be reduced to the five industry classes outlined under NAICS. These are as follows – G1 Building Construction; G2 Infrastructure Construction; G3 Foundation, Structure and Building Exterior Contractors; G4 Building Equipment Contractors and G5 Specialty Trades Construction.
On September 8, we launched an extensive engagement campaign about the rate framework. Over the next few weeks, every business registered with the WSIB will be receiving a letter with information about the rate framework, the new classification system and what your new classification will be in the new model, along with how you can update or change your new classification information online.
This is the first step in making sure businesses are informed and aware of what will be changing in the rate framework. Our aim is to continue to engage with businesses as we transition into the new model. In 2018, we will begin providing further information to help you prepare for implementation in 2020, including what premium rates will look like under the new model.
What should you do?
To support the launch of the new model, we have created a dedicated website – www.wsibrateframeworkreform.com – with all the latest news, updates and information about the rate framework. Once you receive your letter, please take a moment to review your new classification and visit our website to learn more about the rate framework.