Board Concludes External Reviews About Future
TORONTO, ON (July 21, 2005) – The Board of Directors of Ontario’s Workplace Safety and Insurance Board (WSIB) has set the 2006 preliminary average premium rate, approved a funding framework and changes to the WSIB’s Experience Rating Programs.
The 2006 preliminary average premium rate has been set at $2.26 for every $100 of insurable earnings. This is an increase of 3 per cent from the 2005 premium rate which is $2.19.
This is only the second time in the last 10 years the WSIB has raised the average rate. For the 10-year period from 1995 to 2004, the average premium rate paid by Ontario’s employers declined 27 per cent from $3.00 to $2.19, and contributed significantly to the rise in the unfunded liability in recent years. The unfunded liability is the difference between the total cost of the claims in the system and the funds in the system to pay for them. Over the last several years, premiums have failed to keep up with rising costs, and the unfunded liability has risen to where it is now the highest among all Canadian jurisdictions. “It would be inappropriate to allow this debt load to be passed on to future generations of employers. We must take action now”, said Jill Hutcheon, President and Interim Chair. “We are committed to an Ontario where health and safety is a priority and the elimination of illness and injury is a fundamental operating principle for all businesses”, Hutcheon added.
These decisions are part of an overall strategy for rate setting, cost improvements and prevention. The Board’s decisions come after careful consideration of the WSIB’s funding framework, market conditions, and input received from employer and worker groups. The average rate has been set at a level that is financially responsible, fair, and balances the needs of employers, workers and the workplace safety and insurance system. The decisions are based on sound financial principles and are consistent with the need to maintain a strong Ontario economy and retire the unfunded liability by 2014.
The funding framework is a planned and disciplined approach to managing the risks and uncertainties that can arise through financial pressures on the WSIB in the coming years. These pressures include the unfunded liability, increasing health care costs, rising costs of existing claims, impacts of occupational disease, and fluctuations in investment returns.
Based on this average rate, the WSIB has calculated preliminary 2006 premium rates for all employer rate groups, which will be posted on the WSIB web site shortly. The WSIB is releasing preliminary rates now in order to assist employers with their financial forecasting and budgeting for next year. In the fall, employers will receive a statement showing their final premium rate.
“The WSIB has a responsibility to plan for the future and maintain the long-term financial security of the system. It is incumbent upon the WSIB to manage responsibly and prudently, and make tough decisions today for the workers and employers of tomorrow. However, everyone has a responsibility to ensure their workplaces are healthy and safe. Currently, 10 per cent of employers with poor health and safety records are responsible for 40 per cent of the claims currently in the system”, Hutcheon added.
Changes to the Experience Rating Programs will ensure that good performers are rewarded while employers with poor health and safety records pay their fair share. NEER changes (for large employers) will come into effect for the 2006 injury year, and CAD-7 changes (for the construction sector) will come into effect for the 2007 issue year, to allow employers ample opportunity to make the necessary business planning changes. The WSIB is committed to an experience rating system that truly encourages and rewards best-practices in prevention and return to work.
Ontario’s Workplace Safety and Insurance Board plays a key role in the province’s occupational health and safety system. The WSIB administers no-fault workplace insurance for employers and their workers and is committed to the prevention of workplace injuries and illnesses. The WSIB provides disability benefits, monitors the quality of health care, and assists in sustainable and safe return to work for workers who are injured on the job or contract an occupational disease.
Ontario’s Workplace Safety and Insurance Board plays a key role in the province’s occupational health and safety system. The WSIB administers no-fault workplace insurance for employers and their workers and is committed to the prevention of workplace injuries and illnesses. The WSIB provides disability benefits, monitors the quality of health care, and assists in early and safe return to work for workers who are injured on the job or contract an occupational disease. Information on the WSIB is also available at our website: www.wsib.on.ca.Tags: Workplace Safety and Insurance Board (WSIB)