Address expenses and flaws before talking rate hikes: OTA to WSIB

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Toronto, ON– The Ontario Trucking Association has outlined a list of measures it says WSIB should take to address administrative deficiencies and restore the system back to financial health.

WSIB “doesn’t warrant a major overhaul to address weaknesses with the current rate setting framework,” OTA senior VP Stephen Laskowski and policy director Deanna Pagnan said at a WSIB Rate Framework Consultation April 23.

“By implementing procedural changes and improving WSIB administration of current policies, improvements can be made to employer classification, rate setting and experience rating,” Pagnan said. 

The WSIB Rate Framework Consultation flows from the Funding Review undertaken by professor Harry Arthurs to study the WSIB’s finances.

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Earlier this year, a discussion paper aimed at engaging stakeholders in the Rate Framework Consultation echoed Arthurs’ recommendation that the current employer classification and rate setting system requires an overhaul. 

According to the OTA there is no real, insurmountable problem in those areas and employers have not called for an overhaul of employer classification or rate setting at a time when financial constraints faced by the WSIB and other policy issues require more timely attention.

“The solutions offered for discussion throughout the paper focus mainly on funding issues, not expenditures – a huge concern for employer groups – and do not address real deficiencies facing the system,” said Pagnan. 

OTA said however there are opportunities for improvement through enhancing existing programs and exploring policies that would more appropriately assign costs and create greater equity in the system, such as:

Adjusting the initial premium rate paid by the rate group to reflect the performance of individual companies using policies including experience rating; and examining the concept of risk banding so better performing companies within the same rate group would be assumed to have lower risk and therefore pay a lower premium rate. 

As for Premium Rate Setting, OTA said it rejects the idea of another rate increase and “supports a predictable, transparent, exercise including meaningful consultation with employers as contained in a 2011 submission of the Employers’ Council of Ontario to the WSIB Funding Review”:

• WSIB must publish target premium rates for each rate group and the actual premiums must be capped at an agreed upon percentage (perhaps 5% from the target);

• Premium rates must be published six to 12 months in advance to allow for accurate business planning and budgeting;

• Each rate group should pay the full and future cost of new claims;

• The premiums paid by an individual organization should be the premium rate associated with the organization’s rate group, adjusted for their individual performance.

“In addition, OTA, along with other employer groups, has long called for a thorough study of WSIB costs,” says Laskowski. “Employers have the right to be assured that the WSIB is managing these costs, including its own administration, in order to optimize the return on premiums paid. Only then can the question of premium rate increases be properly answered.”

In Stanley’s  Discussion Paper, he pointed out that experience rating results in a fairer allocation of costs associated with workplace incidents while providing a structure of incentives for employers to invest in accident prevention and rehabilitation.

However, Ontario’s experience rating program, specifically New Experimental Experience Rating Plan (NEER) which applies to the trucking industry, lacks transparency, is not easily understood by the employers and should be improved, said the OTA. 

“In fact, many employers are forced to pay for private classes in order to understand and manage the NEER program,” said Pagnan, adding that in other jurisdictions claims are addressed by the appropriate workplace compensation board in a timelier manner and with better communication, resulting in shorter claims duration and claims costs. 

Additionally, claims management and return to work procedures have a significant impact on claim costs. In some cases, WSIB Return to Work and Work Transition managers lack industry-specific knowledge to efficiently manage cases and require employers take time to educate them through various stages of the case management process.

OTA, concluded Laskowski and Pagnan, also supports an experience rating program that treats companies according to their individual performance. “Should a pilot program be developed to test these concepts OTA volunteers the trucking industry,” said Pagnan. 

Trucking is the single largest WSIB rate group with over 82,000 employees covered.

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