Mandlowitz WSIB Report
If you have been following recent announcements from the WSIB you will agree there has been a flurry of activity during the Summer and Fall of 2019.
This includes changes to the classification/premium setting model at the WSIB to the new Rate Framework which will be effective as of January 1, 2019. In addition, the WSIB has announced changes to 2020 premium rates and a number of operational issues.
1. Rate Framework
For a detailed review of the new Rate Framework please refer to our September 2019 document entitled “WSIB ONTARIO – NEW RATE FRAMEWORK. If you have not already received a copy of the review by e-mail you may contact email@example.com.
2. Elimination of the Unfunded Liability
The unfunded liability which stood at $14.2 billion in 2011 was eliminated in September 2018 resulting in a 29.8% decrease in the average Schedule 1 premium rate as of January 2019. The average premium rate reduced from $2.35 to $1.65 per $100 of insurable earnings.
On September 24, 2019, the WSIB announced the elimination of the premium rate unfunded liability charge in January 2020.
3. Ontario Schedule 1 Premium Rate 2020
On September 25, 2019, the WSIB announced a 17% reduction to the 2020 average premium rate marking the fourth year in a row the WSIB has reduced rates. The average premium rate will decrease from $1.65 in 2019 to $1.37 in 2020. The maximum insurable earnings ceiling for 2020 will increase to $95,400.
The WSIB has also released average premium rates for the new classes in the Rate Framework. Employers can obtain class specific information on the WSIB web site and from the Second Quarter 2019 Report
The WSIB has also started to issue/mail employers with their individual 2020 premium rates under the Rate Framework. Employers who have not received a letter/notification from the WSIB can contact the WSIB Employer Services Division.
4. WSIB Premium Rates Freeze for Non-Profit Sector
On September 25, 2019, the WSIB announced that premium rates will be frozen for all non-profits in Ontario. This involves about 2,700 non-profits including daycares, legions, women’s shelters, etc. This is particularly significant because non-profits were scheduled for a premium rate increase with the introduction of the new Rate Framework on January 1, 2020.
5. WSIB Second Quarter 2019 Results
The WSIB has recently issued the 2019 Second Quarter (Q2) statement.
a) Claim volume
Schedule 1 claims registered in Q2 was 5% lower than for the same quarter last year and was the first time the WSIB has seen a year-over-year decrease since Q3 2017. However, year to date 2019, registered claims increased by 0.6% over the previous year.
b) Claim duration
Q2 saw a continued increase in claims duration (amount of time claims continue to require benefits) from 13.2% from Q1 to 14.2%.
c) Claim payments
Q2 saw payments of $1,258 million: an increase of 1.4% over the same period in 2018. In reviewing Q2 for 2018 and 2019 the WSIB reported a 11.7% increase in health care and 1.8% increase in LOE. Decreases were 2.7% for pensions, 4.4% for FEL, 7.1% for external providers and 31.0% for NEL awards.
d) Q2 2019 reported an overall increase of 5.4% for total administration and other expenses compared to the period in 2018.
e) Q2 2019 reported an overall decrease of 3.7% for total legislated obligations and funding commitments compared to the same period in 2019 mostly due to a $6 million reduction for health and safety, WSIAT and WSI Advisory programs.
f) Financial position
At June 30, 2019, the WSIB net assets on a Sufficiency Ratio basis were $3.2 billion: an increase of $0.6 billion from $2.6 billion at December 31, 2018. This represents a Sufficiency Ratio of 110.2%.
At June 30, 2019, net investment income was $2.530 million reflecting an overall return of 7.7%. Net investment income increased by $2.036 compared to the same period last year due to strong performance in public equities and diversified market strategies. At this time net investment assets were $37.426 million.
Total assets were $39,100 million with total liabilities at $32.771 million resulting in a total net assets figure of $6,329 million.
6. WSIB Clearance Certificates
A clearance certificate is a number issued by the WSIB that shows a business is registered and up-to-date in payment of premiums. For a business to be up-to-date or in good standing with the WSIB it must have: an open account and provided all registration information/documents; an appropriate classification; reported all required premiums and completed reconciliation forms; and paid all premiums and other amounts owing to the Board. Clearances are available on-line and are valid for 90 days from the date of issue. If work being done exceeds the 90 day provision employers should obtain a new certificate. WSIB provides clearances at no charge. However, newly registered employers requiring a clearance at the time of registration will pay an initial advance of $250 which will then be applied to their WSIB account.
As of September 15, 2019, instead of creating specific clearances for each business that a contractor does business with, a clearance will automatically be created for each business that is up to date with the WSIB on the premium reporting and payments.
A clearance certificate includes business information and classification unit(s) but not specific principal information.
If a business holds a clearance certificate that is valid beyond September 15, a new clearance will automatically be issued effective September 13 with an expiry date of November 19, 2019.
Clearances are readily available on-line using the quick access clearances service. Instructions for accessing, selecting and receiving clearances are part of this service.
For additional information on Clearance Certificates employers can access the WSIB web site, Clearances section, and refer to Clearances frequently asked questions.
7. Construction Information
On September 26, 2019, a new advisory panel to the Minister of Labour was announced. The Construction Advisory Panel will provide input on issues of interest to that sector. The CAP will be comprised of 8-12 members from different sectors of the construction industry.
8. New WSIAT Chair
On August 20, 2019, the Ministry of Labour announced the appointment of Rosemarie McCutcheon as Chair of the WSIAT on an interim basis effective August 16, 2019.
Ms. McCutcheon is an experienced adjudicator and has been Vice-Chair at WSIAT since 1999.
9. Ministry of Labour health and safety blitz
On October 1, 2019, the Ministry of Labour announced inspectors would blitz workplaces from October 1 to December 27, 2019, in an effort to prevent Ontario’s top injuries. These include musculoskeletal injuries resulting for repetitive work, heavy lifting/carrying, awkward postures, back pain, carpal tunnel syndrome and tendonitis.
Ministry data indicates that in 2017 these types of injury accounted for about 1/3 of all lost time injury claims at the WSIB resulting in 19,000 claims, 462,000 lost days from work, and $72 million in costs.
10. Appointments for Review of the WSIB and related Issues
In 2019 the WSIB engaged Dr. Paul Demers (Cancer Care Ontario) to conduct a review of occupational cancer to help ensure best practices and the most up-to-date information was being considered for compensation purposes. A report is due by the end of 2019.
In 2019 the WSIB also launched a review led by Linda Regner Dykeman and Sean Speer to ensure workers and their families remain supported and protected in the workplace. The review focuses on the Board’s operations and best practices focusing on financial oversight, administration, and efficiency. It excludes claims adjudication and related claims issues. A report is due by the end of 2019.