Beginning on Jan. 1, 2020, Ontario’s Workplace Safety and Insurance Board (WSIB) will introduce a new way of setting premium rates for almost 300,000 businesses across the province.
Our new model will make it easier to understand how your business and other businesses are classified. Premium rates will also better reflect your individual claims experience and help businesses plan for the future by providing projected rate information.
What’s changing in the new model?
First, we will streamline how businesses are classified.
By adopting the North American Industry Classification System (NAICS), which is already used by the Canada Revenue Agency and Statistics Canada, it will be easier for you to understand how businesses are classified. Using NAICS will allow us to move 155 different rate groups to 34 classes/subclasses.
Second, we will make your premium rate easier to understand.
We will set an average premium rate for each class based on its risk profile and share of responsibility to maintain the insurance fund.
Each NAICS class will then be broken down into a series of risk bands, and each risk band will have an associated premium rate. The difference between successive risk bands will be approximately 5%.
Businesses in the same class, with similar risk profiles will then be assigned to the same risk band and premium rate that reflects their individual risk profile.
Third, we will help you plan for any changes in your premium rate.
Projected rates will provide your business with the future direction of your rates, up or down and businesses will no longer have to wait for rebates or surcharges. The current retrospective approach to rate-setting, including MAP, NEER and CAD-7 experience rating programs will be eliminated.
For experience-rated businesses
If you were in an experience-rating program previously, in 2020 you will receive your final NEER and CAD-7 statements, as well as your final adjustments under these programs, which will include an assessment of the 2019 year. Businesses registered under the MAP program received their final statement in 2018, and will receive any final adjustments in 2019.
Moving to the new model
To help you smoothly transition into our new model, any initial rate increases will be staggered over time, while rate decreases will be applied immediately.
Here’s how the transition to our new model will work:
• In 2020, businesses will be assigned a starting point rate and projected premium rate based on previous rates, claims experience, size of business, NAICS classification and whether or not they were in an experience-rating program previously, to determine the 2020 premium rate they will pay. Businesses with projected premium rate decreases will move down to their projected risk band.
• In 2021, businesses with projected premium rate increases will move up a maximum of one risk band from their 2020 risk band. Businesses with projected premium rate decreases will move down to their projected risk band.
• In 2022, businesses that have not yet reached their projected premium rate will move up a maximum of two risk bands above their 2021 risk band. Businesses with projected decreases will move down to their projected risk band.
Starting in 2023, our policies for premium rate setting under the new model will be fully in effect. Businesses with projected premium rate increases will see their rates increase up to three risk bands per year until they reach their projected premium rate, protecting them from any sudden changes to their premium rates. Businesses eligible for decreases will see their rates decrease up to three risk bands per year until they reach their projected premium rate.
We will be providing businesses with 2020 premium rates this fall. For more information or to sign up for one of our monthly webinars and newsletter about our new premium rate-setting model, visit our website (wsib.ca/rateframework) or contact us at email@example.com.